Explaining Why Taxation Is Theft

I recently saw a video clip of Michael Moore calling other people’s money “a national resource.” I have to agree that in some cases other people’s money is not truly their own. For example, the wealth of Moore and others who benefit from government privileges, in Moore’s case intellectual property laws, would belong to others had it not been for the enforcement of arbitrary property claims. The executives of Halliburton and other government contractors benefit enormously from their relationships with politicians.

However, most people are not on the positive end of government privilege, and taxing wealth acquired without the use of government aggression (protections or subsidies) would be theft. Calling taxation theft can sometimes offend people. After all, by alleging that taxation is equivalent to the moral crime of theft, libertarians could be thought of as condemning supporters of taxation, many of whom, including Michael Moore, hold their belief out of an honest moral conviction. For them, not supporting taxation is the height of cruelty.

The purpose for making such a charged statement that taxation is theft (besides being true) is that it challenges conventional political beliefs. It is a contest of values, and libertarians who oppose taxation make this point in order to highlight the inconsistencies in political ideologies. They are demanding some explanation as to why people in governments should be held to different principles than others. Supporters of taxation know this, so they have weaved farcical tales for why taxation is voluntary. Some may call it a social (read: imaginary) contract, which conveys that people residing within a certain geographic territory implicitly agreed to support it. As I will explain below, even if such an explicit contract existed, it would give no credence for taxation.

From what I recall, there are at least six explanations as to why taxation is theft (extortion more precisely). These explanations are often fused together in some arrangement or another, and some are simply incompatible with one another. I do not happen to agree with every one, but I wanted to offer a complete array of moral arguments against the support for taxation. Before I begin, I will note that contemporary argument that an individual consents to the social contract or constitution simply by remaining within a territory or accepting services presupposes what it is trying to prove, that the social contract or constitution is legitimate, the very thing in question. It is a circular, invalid argument.

  1. Taxation is founded on the belief that the exercise of an inalienable right is a privilege, a self-contradiction. People who refused to remit taxes for performing a particular right (e.g. owning property or earning an income) would no longer be able to exercise that right without coercion being enacted upon them, which would undermine from the outset the stated purpose of forming a government. If an implicit contract or written constitution did exist that permitted taxation, it would be unexecutable and invalid from the beginning since one’s (inalienable) natural rights cannot be suspended, making the contract unexecutable and thus void. In a previous post, I explained why I believe rights are inalienable for the fact that free will, a basis for the formation of rights, is inalienable. One way to think of inalienability is that rights are in effect moral obligations on others to refrain from using force against someone. That moral obligation is not for another to give away, so signing away one’s inalienable rights is a self-contradiction. A contract to give up one’s inalienable rights could at most be seen as a (non-binding) promise, just as a slave contract would be.
  2. The central tenet of government, the final decision-making authority to resolve disputes within a territory, is illegitimate, nullifying the legitimacy of government altogether, let alone the power to tax.
  3. Taxation is premised on the claim that the item being taxed is the property of the state or society, as Michael Moore believes. The reason someone might reject that idea is because governments or societies have no rights over citizens; legitimate governments act by permission (which can be revoked), not by right, and nor for that matter could voters grant permission to someone else’s property; therefore, government would never be justified in using coercion to extract payment for taxes. Similarly how a power of attorney can sign contracts on behalf of a client, an agent (the government) is under the authority of its principals (the citizens).
  4. Without the liberty to refuse to consent, expressing consent is impossible. So by preventing the option of withdraw by means of secession, it is not possible to express consent to delegate any powers to government.
  5. Almost all governments in existence came about by exploiting the existing property claims of land owners, and those who did explicitly consent are no longer alive.
  6. Anarchists who adopt the occupancy-and-use theory of land tenure reject the enforcement of rents, which would include taxes, against people in possession and use of a property.

In light of all this, many still defended taxation on the basis that a tax is the fee that must be paid for government services. But this is fallacious. Existing ways that services are provided for include borrowing funds and counterfeiting the government-mandated currency. From a libertarian perspective, taxes could be coerced from people who acquired their wealth by ill-gotten means like government aggression, but only if the taxes were paid to victims as direct payments whenever possible or as services otherwise. For as long as a government did exist, it would not have to be limited to raising revenue by issuing taxes. It could just as well sell off assets, charge user fees for performing services customers ordered (assuming there were no monopoly privileges in place) or just ask for donations.

Even if the handful of above objections were overcame, taxes are demanded whether a service is provided or not. It is true that governments do provide services, but they do so out of concern for maintaining popular support, not because there is any legal obligation to do so. In a voluntary transaction, a buyer is entitled to a refund if the service fails to be provided accordingly, which is plainly not the case with government.

In the above post, I gave six explanations as to why taxation might be considered immoral and unworthy of support. I also rebutted the idea that taxes are owed for the performance of government services, which is usually the final objection raised by tax supporters. In many ways, taxation is worse than extortion. When people have wealth taken from them without their consent, that is likely the last time the thief will harass them. But taxation is altogether more insidious. As Lysander Spooner said:

The government does not, indeed, waylay a man in a lonely place, spring upon him from the roadside, and, holding a pistol to his head, proceed to rifle his pockets. But the robbery is none the less a robbery on that account; and it is far more dastardly and shameful.

The highwayman takes solely upon himself the responsibility, danger, and crime of his own act. He does not pretend that he has any rightful claim to your money, or that he intends to use it for your own benefit. He does not pretend to be anything but a robber. He has not acquired impudence enough to profess to be merely a “protector,” and that he takes men’s money against their will, merely to enable him to “protect” those infatuated travellers, who feel perfectly able to protect themselves, or do not appreciate his peculiar system of protection. He is too sensible a man to make such professions as these.