“As a result of their hope and courage my father was fortunate to have been born into the freest nation in the history of the world. But when he passed away on Oct. 16th, 2015 at the age of 87, a political prisoner of that same nation, legally blind and shackled to a hospital bed in a guarded room in intensive care, the free nation he was born into has itself died years earlier.” Peter Schiff, Son of tax protester Irwin Schiff
As we continue to see growth in the Libertarian Party, and their policies, an issue of rhetoric has emerged: taxation is theft. This issue has caused many to become apprehensive of the Libertarian Party, and as a result I feel that it needs to be discussed.
The basis for taxation being theft springs from the belief that if an act by an individual would be considered illegal, then it must also be considered as such by the government. Since democratic governments receive their authority from the people, they do not have the ability to do anything an individual cannot.
As a result we must discuss the various forms of taxes and their collection mechanisms to evaluate the libertarian claim.
In the United States, there are currently three distinct general forms of taxes to be evaluated. They are in order of revenue income and sales or possession based.
Income based taxes are those which require an entity to give a varying portion of their income to the government based on their profits. Generally, the higher the profits, the higher the rate at which they are taxed, and the lower the value of services they received in proportion to the amount paid.
This is intuitive, since a person who makes zero pays zero in taxes, and receives on average $22,000 in services, whereas a person who makes more will always pay more than zero, decreasing the ratio.
The method for collection of income taxes occurs through direct force, whether it be implied or actual, since the payments are taken out of your checks before they can be cashed, and any disputes are operated under guilty until proven innocent.
Second, should one attempt to hide revenue from the government, that individual is again treated as guilty until proven innocent, and imprisoned unless they pay.
Third, there is no choice involved in income tax as opposed to the other tax which can be avoided through non consumption.
Lastly, due to a lack of choice in payment, a determination of value cannot be made. That is to say we cannot ask if the good or service provided worth what we are paying.
The second tax, is a broad category which I will call consumption based. These taxes are the direct result of a transaction occurring, with many goods having different tax rates.
Examples of consumption taxes would be the eight percent sales tax you pay when purchasing a shirt at Kohls, or the tobacco tax of 28 percent.
In many states, goods which are deemed essential to survival, such as food are not taxed, which would theoretically allow an individual to pay zero in consumption taxes over the year, although this is unlikely.
As a result, these taxes are collected at the point of purchase, and should there be a dispute the purchase can be terminated rather than paying the tax.
With these taxes the consumer has the ability to avoid them by either not partaking in the taxed market or purchasing their goods elsewhere.
These taxes can therefore be considered a part of the transaction rather than mandatory.
As a result of the two different collection mechanisms and whether or not choice is involved, we can hold them differently on the libertarian question of whether or not they are theft.
In the case of income tax, it’s most unquestionably theft with none of the following being provided: services, dispute resolution, consent of payment or determination of value (whether or not “X” is actually worth “Y”).
These taxes rely on force to function. Just like a robber relies on his gun to take your wallet, the government relies on its police to force you into compliance.
No matter how worthy the cause may be, as government expenditure often is, the use of force throws away your moral highground.
As a theoretical example, imagine a world where a group of bandits wants a new library. Would they be justified in mandating by threat of locking you in a cage for $500 of funding?
Even if the majority of all people would be happy to pay for the library, they would still not be justified in seizing your income. This is no different from the police coming to your door for failure to pay taxes.
As an example of the above experiment, Irwin Schiff refused to believe in the legitimacy of taxes and refused to pay any income tax for his entire life. As a result of his refusal to pay, he spent roughly 30 percent of his adult life behind bars imprisoned by the state. His son issued a lengthy statement about his incarceration featured a heavy critique of the perceived criminal nature of the state, “As a result of their hope and courage my father was fortunate to have been born into the freest nation in the history of the world. But when he passed away on Oct. 16th, 2015 at the age of 87, a political prisoner of that same nation, legally blind and shackled to a hospital bed in a guarded room in intensive care, the free nation he was born into had itself died years earlier.”
Sales tax on the other hand, cannot be considered theft, especially when it is not levied on life-essential goods, since consent is given by the individual who partakes in the market.
As with all things, it appears that while there is some merit to the position, when nuance is lost so to is the message. In short, while taxation may not always be theft, when viewed through the libertarian position, it most often is.
Dave Owen is the opinion editor for The Dakota Student. he can be reached at [email protected]