The only good tax is no tax. Why? How would we fund government without taxes? Those are good questions to ask. But first let's understand what taxes are.
Throughout most of history, governments--usually monarchies headed by kings, emperors, pharaohs and other major or minor tyrants--actually owned everything under their rule, including, believe it or not, the people. In those regimes the population had been regarded subjects, not citizens.
That means that the people were treated as the underlings, subjected to the will of the ruler. In these social systems the institution of taxation was a cruel measure of outright subjugation, perpetrated by rulers upon their subjects. Because the rulers owned everything, when the subjects lived on the land owned by the rulers, they had to pay for this privilege.
No, they had no legal right to the land they worked; they had no legal right to their own labor; none of the basic rights of individuals were given legal protection. The law affirmed the full power of the rulers, period, until gradually this absolute power began to be checked and contained.
In time the idea gained prominence that those who made up governments were human beings, not gods. Thus it dawned on many that they had no (divine) right to rule anyone at all other than themselves. Indeed, the idea began to gain headway--between the 11th and the 18th centuries--that every human individual had the basic, natural right to his or her life, liberty and property. Anyone wanting to gain the benefit of another's work or other assets would have to ask for it.
Sovereignty had to lie with individuals, not with governments--that is the central point about being a citizen as distinct from a subject. This is the significance of the well known phrase "consent of the governed." This consent must be obtained if one is to govern a citizen, unlike it is the case with a subject.
And in a fully free society there is to be no exceptions. John Locke, the English political philosopher, went the farthest--though still not all the way--toward the development of this idea and its implications.
All the while, of course, the point had been resisted vehemently by those who felt they knew how others ought to live their lives--conduct themselves and make use of their properties--and insisted that they could know it much better than the persons on whom this "knowledge" is to be imposed. They fought tooth and nail, with force of arms, with references to tradition, and, of course, with fancy but mostly sophistic arguments. And the debate is still going on.
But not widely enough and there is a reason. Like all extortion, taxation is difficult to fight. Furthermore, in the case of taxation the very people on whom we call to resist criminal extortion are the enthusiastic, loyal extortionists.
Judges, politicians, police officers, all kinds of agents of various levels of government--all those part of the system the Founders of the American Republic had called upon "to secure these rights"--have remained, as in feudal times, the very people who perpetrate the extortion: they have, as a matter of fact, become worse than extortionists who, after all, admit they are criminals.
Those in government and their supporters who defend its supreme role in society often believe, sincerely, that their institution is a necessary, albeit coercive, agency.
These folks are convinced that what they provide is so vital to us all that they do not have to ask for permission to provide it, so long as some sizable portion of the citizenry--via some kind of democratic process (but one to which not all have consented)--backs them up.
No, they may impose their public services, never mind whether consent has been obtained from all those who are to be benefited and from whom payment, namely, taxes, are confiscated. If the American Founders had all along been preached to by the intellectuals who enthusiastically defend the institution of taxation, well, there would be no United States of America, the bastion of individual liberty in the world, and no glimmer of hope of extending its ideas to further regions of human life.
That is because from the start the leaders of this country had the revolutionary gall to call for more liberty for its citizenry than those in other countries had. This call has by now been seriously eclipsed by the call of our current leaders who do not even see the point of mentioning, let alone expanding, the protection of individual liberty as one of government's central tasks.
Of course, calling for liberty didn't always suffice, which is why slavery had to be abolished, for example, and why there is so much more work to be done along lines laid out in the US Declaration of Independence. All in all, despite compromises and failures, the call for more individual liberty has been one of the cornerstones of America's uniqueness.
The call for abolishing taxation, heard only here and there and mostly expressed in demands for tax cuts, is just a further step in the direction of living up to the promise of the American revolution.
Ultimately taxes need to be replaced with a form of payment for government services that is fully, uncompromisingly consistent with the principle of "the consent of the governed."
Barring such a development, all we have is the chance to press the point: reduce taxes, privatize services, and through this make us all more free.
Tibor R. Machan teaches business ethics at Chapman University and is an adjunct scholar of the Ludwig von Mises Institute in Auburn, Alabama.
Two outstanding books on taxes are For Good and Evil: The Impact of Taxes on the Course of Civilization and Those Dirty Rotten Taxes: Tax Revolts in American History, both by Charles Adams.
Read a piece on taxes by Charles Adams: The Dark Side of the Tax State.
Also read Ralph Reiland's Taxed to Death.
For an Austrian view of taxation, see Jeffrey Herbener's The Preferred Tax Type (a .pdf file), where he writes: "The effects of government activity are analogous to those of the protection racket. Taxes are involuntary payments extracted by the threat or use of force. If not, individuals would gladly make these payments voluntarily and could voluntarily withdraw them. Taxes cannot exist in the market, but are always invasions into the market. As with any other form of violence, taxes disrupt the effectiveness of voluntary activity."
You can receive the Mises Dailies in your inbox. Subscribe or unsubscribe