Taxation is theft. For those who follow a strict definition of private property rights there is little doubt: the morality of taking that which belongs to other people can’t be qualified by who takes it, how they spend it or the way in which they got the power to do so. A democratically elected government is not bestowed with any right to actions which the individual is not, and other people’s needs, not matter how desperate, do not change the morality of actions.
But of course, most people don’t see taxation as theft. Many argue it is a “necessary evil”. Libertarianism is closely related to the concept of negative rights, according to which individuals are obligated only to not interfere with others, but a positive rights concept obligates people to action, and this can form a theoretical foundation for the argument that we need taxation because we (as a group, manifested by government) have an obligation to provide goods and services to others which cannot be provided in the absence of taxation.
Another line of defence for taxation is to argue that by using government services you implicitly accept to be taxed or that private property rights exist only within a framework of a state enforced legal system, which in turn can only exist if funded through taxation. Utilitarian arguments such as these see strict adherence to property rights with respect to taxation as ultimately self-defeating.
This line of thinking is closely related to the concept of the Social Contract, where many find their justification for the state and hence taxation. Proposed in various forms by the Enlightenment thinkers, Thomas Hobbes, John Locke and Jean-Jacques Rousseau, Social Contract theory argues that the individual’s obligations towards the state are founded in their need for organising society under the power of government. Hobbes saw the State of Nature (the state-less society) as a state of war, and the social contract as a natural refuge for rational men: the state is all that stands between us and the chaos of anarchy, so we readily submit – and accordingly, the non-voluntary nature of taxations is a moot point, as no rational man would ever object. It’s a bit more complicated with Locke. He didn’t see the State of Nature as being without morality, and he envisioned it as a free and basically peaceful society. However, Locke didn’t have a “libertarian” solution to conflict, and he feared the consequences of war in a society without civil authority. And it is to enable the protection of one’s property and punish transgressors that men consent to subjecting to a government – but unlike Hobbes, Locke did not preclude that men would find the conditions for their surrender to government rule to be broken and the Social Contract to be void. So, is taxation theft? Is seems it could be, and if I saw it like that I would have a right to reject government and return to the State of Nature. Finally, there is Rousseau, for whom it is the very concept of private property which necessitates the state, as he did not see any other solution to regulate men’s competition for scarce resources. But he saw the state as more than a guarantor of a legal framework for conflict resolution: for Rousseau the state’s very purpose is to give man freedom, and in many ways his theory subjugates the individual to the state. There is not much need to examine Rousseau’s theory for consent to taxation, because consent to be ruled is not central to his theory: instead, men come together and agree to form a single “general will” and once formed, they must conform to it; they must be “forced to be free”.
For property right absolutists, Social Contract theory is, however, easily dispensed with: no libertarian would concede that the individual should be bound by an imaginary contract which he has not signed himself or that property rights are dependant on the state. Even Locke’s “soft” version of the social contract doesn’t pass muster, because reaping some benefits from having your property stolen still violates the basic need for consent inherent in the non-aggression principle, and even the (theoretical) ability to escape the Social Contract doesn’t negate the fact that no man actually signed it in the first place. And of course, we do not fear the stateless society; in fact, we believe it to be preferable – so we disagree with the premise that free men would naturally move towards the establishment of a state and the adoption of a Social Contract.
But apart from the theoretical shortcomings, Social Contract theory is simply not readily applicable to the type of tax rates which have become the norm in modern welfare states. Thinkers from the enlightenment age would be aghast at the scale of infringement of individual liberties that modern governments seem to take for granted as being their right to impose. You simply cannot credibly argue that everyone would consent to tax rates of 30%, 40%, 50% or even higher. That’s why the Social Contract is an argument mostly heard on the right: it is more compatible with a low-tax, small-government position.
So, what about the left?
Let’s start with the very left, because communists probably have it easiest when arguing that taxation isn’t theft. Karl Marx posited that the source of profit is the exploitation of labour, because capitalists expropriate a social surplus (make a profit) by paying workers less than the value created by the labourer. There are many critiques of Marx’s Labour Theory of Value – not least that it seems to imply that labour intensive industries should be more profitable than capital intensive ones, which is both empirically and theoretically not the case – but the issue at hand is not to critique Marx, but to recognise that a Marxist view of how private capitalist profit is created implies that much of what a libertarian would see as “private property” does not actually belong to those who think they own it. It follows that taxing it away is not theft; it can be seen as the state righting a wrong by confiscating the excess value expropriated by capitalists and re-distributing it to the workers.
The problem for most on the left, however, is that they are not strictly Marxists. They are not opposed to private property or enterprise and see profit broadly as legitimate. So, they must lean on the “positive rights” argument to justify expropriation of private property for the purposes of wealth re-distribution and government services. But that doesn’t negate the fact that taxation is an act of taking what rightfully belongs to others. And there are other problems too. Firstly, it is a terribly “grey area” to accept property rights as legitimate and simultaneously argue for their systematic violation. And there is a significant chasm between what you would think are needs so basic that they justify the violation of basic rights to enable the state to satisfy them – hunger for example – and the Leviathans modern welfare states have developed into, with all manner of services but also regulations of supposedly free people’s private lives – all of it funded by taxation.
There are other niches of political thinking that throw up their own issues. Georgism, for example, holds that added value from production is private property but land is not, and hence that economic yield from land should belong equally to everyone. It follows that Georgists can make a moral case for land value taxation not being theft, whereas income tax or sales tax would be. To a libertarian, the argument that land sits outside the sphere of private property is, of course, non-sensical: the right to homestead land is central to libertarian property theory. Others see a difference between income tax and sales tax; they view a sales tax as more legitimate, as it can be avoided simply by not spending money. But it’s an odd argument, as freedom to spend – that is, to exchange ownership of one asset or consumer good for ownership of another – is intrinsically linked to the freedom to own itself. The often-heard argument that sales tax is regressive is of course true, but hardly of any moral value: there is nothing more ethical in a progressive system of taxation (and the concept of “paying their fair share” of taxes is purely a leftist marketing ploy for which no argument of any theoretical substance has ever been forwarded).
For property right absolutists taxation is theft. We may have to concede that there are arguments for taxation, based in concepts of rights, value and morality that libertarians do not adhere to. But for those who accept the premise that confiscating the property of others is broadly not defensible but argue that taxes are necessary to bring about desirable societal change there is no escape. They may not recognise the facts, but we do. Taxation is the price we pay to keep the state from sanctioning us; the consequence of living under authoritarian rule. Taxation is theft.