10/12/2008

Is Tax Theft?

Short answer: No.

Long answer: A few months ago, I asked this question in a comments thread at the libertarian Marginal Revolution blog. In hindsight I feel a little guilty for having almost hijacked someone else's blog; in my defense I'll say that the phrase "tax is theft" appeared (in passing) in the original post. The exact wording of my question was as follows:

Here's something I've never understood about libertarianism.

Libertarians are not anarcho-capitalists: They say that there is a role for government - at minimum, defense (military) and inner security (police). How, then, can you say that "tax is theft". In other words, how is the government supposed to perform those tasks without collecting taxes?

I'd be grateful if someone could answer that; thanks in advance.

Posted by: LemmusLemmus at Apr 30, 2008 8:53:11 AM

Yup, I know that should have been a question mark after "'tax is theft'".

I thought the answers might be of interest to some readers. As I can't put anything below the fold in this blogger template, I've put all reactions to the question in the first comment. (Some entries are excerpts from longer reactions.) Find the whole thread, the main topic of which is limited liability, here. I hope I haven't missed anything relevant to the "tax is theft" issue.

It would be a bit cheap of me to reply in detail to the argements I disagree with after having hardly participated in the discussion I initiated. Just make up your own mind about the contributions.

3 comments:

LemmusLemmus said...

The reactions:

(...)

As to the really silly "taxation is theft" idea, maybe the distinction is that A,B, and C don't just get to call themselves a government the way they get to call themselves a corporation, at least not in modern democratic countries.

Posted by: Bernard Yomtov at Apr 30, 2008 9:14:34 AM

LemmusLemmus:

My view is that compulsory taxation is always theft and so government revenue should be collected voluntarily. If government were shrunk to a respectable size then I don't think that free-riders would be a significant problem. Especially if people who didn't pay the voluntary fee were denied whatever services government did provide.

Other libertarians might view the very-low tax needed to support a minarchist state as a necessary evil. Certainly paying a flat tax of 5-10% would be 'more just' than what we pay now.

Posted by: Robbie at Apr 30, 2008 9:19:43 AM

Robbie,

thanks. The "deny people who don't pay service" might work with police services, it won't work with defense (military).

Posted by: LemmusLemmus at Apr 30, 2008 9:27:51 AM

The "deny people who don't pay service" might work with police services, it won't work with defense (military).

It won't work with police or fire protection either. Or roads. Or courts in many cases. Or bank regulation. Or environmental protection. Or...

Posted by: Bernard Yomtov at Apr 30, 2008 9:49:43 AM

Lemmus,

Most moderate libertarians don't object to *all* taxation, per se, but rather redistributive taxation. For instance, around 50% of the US Federal budget is redistributive in nature, and another 35% or so is military and debt service (debt service, in many ways, is intergenerational redistribution). There are many historical instances of state power in history which, after expanding, serves not to provide public goods but instead to shift money and capital from one group to another.

(Note that more moderate libertarians, myself included, don't even object to all of the redistribution: I think we'd be worse off in a world without unemployment insurance, for a number of reasons.)

Posted by: cure at Apr 30, 2008 10:26:26 AM

(...)

P.S. Yes there are indeed anarcho-Libertarians who believe all taxes are theft and every government service could and should be privatized in its entirety they usually follow the teachings of Murray Rothbard. On the other hand - a voluntary tax-paid government where those who don't volunteer to pay taxes get denied the services?!?! Isn't that simply a private enterprise??

Posted by: Gil at Apr 30, 2008 11:16:04 AM

(...)

As to the "taxation is theft" notion, there is no pat answer. Taxation is plainly more coercive than market transactions. Everyone resents taxation at least to some degree because they have no appreciable say about the product/service bundle that presumably comes with the purchase. That bundle is undeniably unwieldy, wasteful, and sometimes abhorrent to our personal beliefs (like funding abortion clinics, or unprovoked wars).

Whether or not society is possible without taxation is, I think, a pointless debate. Governments exist in this world by necessity, and a common attribute of all governments is the power to tax. The only real debate is the mechanism.

Posted by: h-dawg at Apr 30, 2008 12:43:36 PM

(...)

As far as the tax issue: it's only theft when it's the Feds.

I think the whole tax structure is upside down.

I don't know if it's workable, but imagine everyone paying ONE tax to the local city or county where you live. That county then pays "tribute", or whatever you want to call it, to the State, which in turn sends a payment (an allowance if you will) to the Fed.

Sure would cut down on the size of the Fed.

Posted by: jackscrow at Apr 30, 2008 1:32:56 PM

John Althouse Cohen said...

I wish the whole text of the post had just been the short answer.

Susan said...
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