Economics, Politics

Is Taxation Theft?

Are libertarians serious when they say, “Taxation is Theft”?

Taxation is the act of expropriating property from citizens by a state. Taxes are imposed on people in many forms. A tax on income, for example, is the act of the state claiming a right to a portion of a person’s income. Income is a product of labor. When the state claims a right to any amount of a person’s income the state is effectively claiming a right to that corresponding amount of a person’s labor. This is all very problematic from a private property ethic perspective.

The ethics of private property hold that property can become legitimately owned only through original appropriation (homesteading) or voluntary (consensual) exchange. No one is asked by the state if they wish to engage in a contractual agreement where undecided amounts of property (decided later by the state) are taken from citizens in exchange for certain goods and/or services. Therefore, the act of taxation and the idea of the social contract cannot be justified by any ethics of private property.

Rather than originally appropriating resources and adding value to the world, the state expropriates resources from property owners who have acquired their property either through original appropriation or voluntary exchange. This makes people worse off. No one can say they prefer being taxed to keeping their property. Anyone who doesn’t give all their property to the state is demonstrating their preference to keep the fruits of their labor rather than handing them over to the state.

Assuming any good that could possibly be demanded by consumers can be provided by markets (see Walter Block’s talk: “The Case for Privatization – of Everything”), any case for coercive taxation falls apart. There would be no reason, in a free market, to have a coercively-funded central authority providing certain goods or services. If I can go out and buy access to roads, for example, then there is no rational justification for the state to collect taxes to fund the building of roads. Taxation is an unjust and destructive institution that shouldn’t be regarded as anything but theft or extortion.

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