The True Nature of Taxation

Nobody really likes paying their taxes. But, as the old adage about “death and taxes” conveys, there is a sense that taxes are as legitimate and as inevitable as death itself. In their acceptance of taxation, many well-meaning people forget that taxation violates our most basic moral principles.

If you have ever been to a kindergarten or a playground where very young children play, you might have realized that, although the kids are too young to understand many things, they already have a surprising sense of justice.

Take a toy away from a toddler who cannot yet speak a word, and you will often be met with a very clear protest. As far as the toddler is concerned, you have stolen her toy, you have initiated violence, and therefore it’s time to cry. The toddler’s reasoning probably isn’t this sophisticated, but the understanding is there.

Slightly older children are even more amazing. They understand that there is illegitimate violence (when a toy gets stolen), but they also understand that there is such a thing as legitimate violence as well, which is when the victimized child goes to the thieving child and takes her toy back. The astonishing thing is that the usual focus is on getting the toy back rather than punishing the aggressor. Punishment is a concept that they learn later, probably from us.

The initiation of violence is the act of an aggressor against you or against your property. This can be done through actual violence or through intimidation, because the mere threat of violence is an act of violence in itself. A good example would be a thief that points a gun at you to get your wallet without actually pulling the trigger. Another less obvious example is the way the government takes our money. To say that taxes are a form of theft may seem a bit over the top, but refuse to pay your taxes and you will be thrown in jail. Refuse to pay your property taxes and you will see who really owns your house.

Governments have done a wonderful PR job: They call us taxpayers, not victims, and the taxes are somehow “collected,” not stolen. Taxes are also called contributions, as if it had been a matter of choice. And because it is the government that decides whether this form of theft is legal or not, there is nothing we can do legally to get restitution. No playground justice for us.

Many actually see the crime but take it as a necessary evil, and when you ask for the complete abolition of taxation, they ask in minute detail how we would pay for roads or law enforcement.

I admit, it is hard to imagine how our society would work in a completely new order, but I would like to offer some ideas and historical facts that may ease these worries.

One important thing to remember is that all of the services now funded by taxation and provided by the government were at one point in the not-so-distant past funded and provided privately. Indeed, many are being provided privately today, from affordable private education in Ghana to the luxurious streets being built every day in our North American cities for new residential developments (which are later handed off to local governments).

Another reassuring example for those who want answers right now regarding a future without taxation is that not so long ago slavery was normal, and in many parts of the world nobody could have conceived of life without it. When some pointed out the ethical and economic problems behind the practice, the vast majority of people claimed that, not only was it impossible to abolish slavery, but even the slaves themselves were actually better off in captivity than in liberty. Today these claims seem ludicrous to us.

Some were genuinely concerned about the slaves. Because they had no property, some said they would all be homeless and scattered around. Such well-meaning conservatives even feared that without their masters the slaves would be unemployed. And above all, the worriers claimed that the entire economy would collapse, putting everyone — former slaves included — in a state of abject poverty.

The idea of a world without taxes is hard for us to imagine, and there are many unanswerable questions that we would like answered. But we need to stand for liberty regardless of our reservations, just like we still stand against slavery.

While I agree that lots of neat things can be done with stolen money, we need to remember that we would never go to our neighbors with a gun and tell them to pay for our education or retirement, regardless of how rich they were. We wouldn’t do it because it’s wrong. Even a toddler knows that.

Rod Rojas
Whiskey & Gunpowder

April 27, 2011

Rod Rojas is a holder of the Canadian Securities Course designation and performs as a financial adviser in personal, corporate, and public-policy matters. He is a proud member of the Ontario Libertarian Party.

The Daily Reckoning