Tax can never be theft

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The libertarians are back on the blog — but at least the current wave are trying to be polite.

With them, however, has returned the claim that “all tax is institutional theft”. So let’s deal with this, simply, straightforwardly, and I suggest in such way that is beyond dispute.

First let’s be clear: no modern society has survived without a government. We have seen states without an effective government, such as Somalia. But that society is failing, and at the end of the barrel of a gun. Assuming that this is not the libertarians wish then government is a fact of life that they must accept — as do all mainstream thinkers.

Second, no modern society can survive without property rights that can be protected without resorting to physical violence. Failed states are characterised by property rights enforced by violence. Successful states are associated by property rights enforced by laws passed by governments which can be upheld in courts, set up and maintained by those governments. So, unless libertarians are suggesting that property rights should be enforced through physical violence they must support the right of government to establish, maintain and defend those property rights.

If they do that though they concede to government the right to establish just what the right to property is: no one else has that right. All anyone else can do is establish that they have a right that can be evidenced to exist within the structure of laws that a government has established. But that in turn means libertarians must concede the right of the state to make law.

Once that right has been conceded the state also has the right to make other law: including the right to levy tax to ensure that the system of property rights it has established is maintained by law.But this means that tax laws are created by the same process that creates a right to property: the two are indistinguishable. The right to property is the same as the right to tax: both are simple applications of law.

Of course the legitimacy of both laws is dependent upon the legitimacy of the government: as a democrat I assume a government elected on a universal mandate without interference in the electoral process is legitimate. I assume libertarians do so too: if they do not they have to say so.

In that case then property rights and taxes are equally legitimate. But they are more than that. They are fundamentally related. For example, the right to enjoy residential property in the UK is protected by law. But attached to it is an obligation to pay property tax. The right to be paid under a contract of or for services is also protected in UK law. It does however have attached the obligation to pay the tax arising on that income. In other words, property is not just a collection of rights. It is a collection of rights and obligations. It is not possible to chose the rights and deny the obligations: if you do you lose the rights.

Tax evasion is an attempt to exploit the rights to property without accepting the resulting obligations of ownership. It is rightly illegal.

The argument that tax is theft is related to tax evasion: it is denial of the obligations attached to property. In offering that denial those who promote the idea effectively also deny the right to property without resort to illegality — whether that illegality be the use of force to protect the claim to ownership or the use of deception to maintain it.

In that case the argument that all tax is theft is not just meaningless; it is either plan wrong or it must be seen as an incitement to illegality. And it is undoubtedly an incitement to infringe the property right of another person — for government is in this sense a legal person acting as proxy for us all in community. In that context the statement is something more still, for it is also vey obviously indicative of corruption, whether of ethics or conduct.

All of which makes the claim that tax is institutional theft a profoundly unattractive sentiment worthy of resounding condemnation by all who believe in democracy, the rule of law and society itself.


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