Is taxation theft?

Christopher Bullock famously said “Tis impossible to be sure of anything but Death and Taxes”. Recent advances in genetic engineering promise us of immortality by slowing down the process of ageing. Today we cannot be sure that death will be inevitable in the future.

The situation with respect to taxes is exactly the opposite. After all, why do we pay taxes? The justification for taxation varied at different points of time. In ancient times, taxes were collected for funding war against foreign invaders. Later, under the pretense of the divine authority of the king as the owner of the entire land and thus legitimizing the monarch’s privilege to collect tribute was the reason for taxation. In modern times, it is more or less demanded by the government whose function is supposedly to provide security, justice, public goods and other welfare activities to its inhabitants. But is it legitimate, moral or ethical for the government to tax its citizens? Is it possible to have a society without government?

There is no moral or ethical justification for taxation by definition is carried out without the consent of the taxpayer and is done under the threat of using physical violence on those who do not pay up.

In fact, the government is not a legitimate owner of the territory it controls. Almost every nation’s borders have been carved out either by warlords taking over that land by use of force or by revolutions led by individuals who established themselves as the rulers. Taking over control of land by the use of force is considered robbery. Legitimate ownership of land can take place if one has purchased the land from an owner. Another way of owning property ownership is when someone puts a piece of virgin unclaimed land into their use with the help of their labor. This is called the homesteading principle of property ownership. The government claims that entire territory that comes with the national border falls under their authority. The government has been defined as a territorial monopolist. It is an agency that claims that it holds the exclusive right of ultimate decision-making within that territory. Disobeying the state’s decisions will result in violent conflict between the state and the defiant. Such legitimacy of the use of violence is not only unethical but also extremely dangerous. It leaves the monopolist every possibility of abusing this power.

Government leaders are elected by the practice of democracy. Democracy by definition is considered mob rule. Thus the majority's decision cannot be considered as a standard of moral judgment. The government, however, claims that the rights of the individual can be forfeited for social causes if the majority decides so. It claims that there is a hypothetical contract between the members of the society called as a social contract. Under social contract, some individuals are bound to give up their rights for others. Contracts by definition are entered voluntarily and are enforced by the law. The government claim that an individual must forfeit their rights for the interest of majority under social contract cannot be accepted. For any contract to be considered as a legitimate contract it must be consulted, consented, and signed by everyone who is party to it.

There is another line of argument that proponents of taxation put. They claim that the state needs money for welfare activities and therefore we must pay up. Welfare by definition means to offer support and assistance, mostly financial. The state does not have any money of its own, to begin with. So how will it take up the cause of doing welfare?

We have seen in the real world that our do-gooder leaders do not pay for welfare from their own pockets. Nor these leaders like a social worker do, coordinate between donors and the needy to arrange funds for the welfare schemes. What they do is that they forcefully take away a part of the income from productive individuals in the form of taxes. With the extorted money they keep a part for themselves to live lavishly, hire goons who will carry out the extortion activities (the police and the tax officers) for them and the remaining leftover money is given for the intended welfare activities.

Direct taxation is visible and the taxpayers know right away how much they will be affected. Taxing too high (say 100% of the income) will trigger discontent among the masses. There is an indirect way for governments to steal parts of our incomes. In order to do so they use their territorial monopoly to ensure that besides the government no one else can issue money. They own the money mints which mint coins and the money printing presses which prints paper notes. Technically, they can practically print as much paper note as they want. But as everything has its effects, so does printing money out of thin air. It lowers the value of each currency note in circulation. This is seen as a rise in prices of most of the goods and services. We call it inflation. Inflation also erodes the value of our savings. Suppose, a person has saved a thousand bucks today and if the government increases the volume of money in the economy by twice, then his/her savings will be worth half its value that it had when he/she started saving. This happens because for each note that we had saved, there is another new note in the market available now.

The government taxes which are imposed on the producers of goods are passed on to the consumers as a part of the product’s price. Higher taxes mean higher cost of goods and services. Higher inflation means dearer the goods and services in the market. Both inflation and taxes are disastrous for the poor, and the lower income groups. The government claims that taxes and inflation is intended for the poor but is actually harmful. Therefore, we cannot say that the government is an institution of welfare.

The final claim of the proponents of taxation is that the government provides public goods like roads, education, healthcare system, disaster management, security from goons via police force, defense from foreign invaders by maintaining a military force, protect environment etc. The government propaganda has convinced us that without the government none of these public goods will be available. If we observe the real world, it can be clearly seen that there are roads that have been constructed by private agencies. We pay the company a toll in order to travel on their road. In this way, the costs of building the road and its maintenance fall only on those using the roads. Similarly, there are private hospitals, which target the lower income groups and come up with low cost health care solution. Non-Governmental Organizations help out the extremely unfortunate ones with financial assistance with the help of donations from noble donors. Crowd funding sites are an example of this.

Likewise, many criminal cases are investigated by private detectives. Security of life and property is addressed by hiring security personnel and bodyguards. Defense in Switzerland is maintained by public militia and not a standing army. And as a matter of fact, Switzerland has never witnessed an attack on its soil in both the world wars because due to their neutral foreign policy and presence of militia.

Next time when you fill up your tax forms probably you should question if you need the money you've earned more than the government? Also, do consider the plight of governmental services and compare if you can use this money in a better use than the government or not.

A State, in the words of the great Murray Rothbard, is nothing more than "a gang of thieves’ writ large". If human life thrives on peace and non-aggression, then the government is the polar opposite of that. We have been told many a times that government is a necessary evil. It is high time now, that we must question if is evil even necessary?

Is taxation theft?

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