Is Taxation an Initiation of Force?

Your leftist friend said, "Force involves the elimination of choice; since we are free to flee the country if we choose, by his logic there is no initiation of force being applied in taxation." Can you choose to stay in your own home? No, you are forced to leave the country, pay taxes, or go to jail. When you are fleeing a gun, that is force, not choice.

Remind your leftist friend that it is the left that generates the greatest taxes, hence the greatest motivation to leave the country. Hardly anything to brag about.

(Edited by Steve Wolfer on 6/25, 1:21am)

Post 21

Thursday, June 25, 2009 - 12:32pm

Jim,

where exactly you can flee to where no taxation will occur.

People could go live on a boat in the tax-free ocean.

Steve,

When you are fleeing a gun, that is force, not choice.

If the gunner is justified in pointing the gun at you, then that kind of force is acceptable. Like I said in post 4, taxes are the basic price of spending time in a country.

Jordan

Post 22

Thursday, June 25, 2009 - 1:30pm

Jordan,

"...taxes are the basic price of spending time in a country."

The money in your wallet is the basic price of staying alive in a mugging. Taxes are collected at the point of gun - ask anyone serving time for tax evasion. Tax evasion: aka "keeping your own money". Theft is theft.
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You appear to be saying that the Obama administration is justified in pointing the IRS gun at my head to support some new taxes created for, say, Health Care.

Don't you see the difference between a tiny amount of taxes taken to support the most efficient, minimum structure needed to support individual rights and nothing else, and our current system which is taking from 40 to 60% of GDP to support special interests, welfare, foreign aid, and pretty much any idiotic scheme those in power dream up?
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We should be working to reduce taxes till the amount collected approaches the minarchy ideal. From that point, converting to a voluntary scheme is doable.

Post 23

Thursday, June 25, 2009 - 4:16pm

Hi Steve,

Yoiks.�I didn't mean suggest that our current, chaotic,�bloated tax system is just. �I was�trying to say that�it's justifiable that governments tax, not how and to what extent they tax.�

Jordan

(Edited by Jordan on 6/25, 4:28pm)

Post 24

Thursday, June 25, 2009 - 4:55pm

Jordan,

If our current system is unjust then either there is some dividing line on the other side of which taxes become just, or taxation is always unjust - those are the only two options.

I maintain that even though it's always theft, that it becomes very different when it is restricted solely to what is needed to support our individual rights - at that point I'd say it was only theft in a technical sense of the word.

I'm not being picky on semantics, because that dividing line separates the most corrupt rape of property rights by a tyranny from the attempt by good people to create the best of all protections of our rights. It's like the difference between using a gun to rob someone and using a gun to defend oneself.

Neither "all taxation is theft" nor "all governments are justified in taxing" tell a story worth listening to.

Post 25

Thursday, June 25, 2009 - 5:24pm

Corporate law and patent law are creations of the state. They are positive creations of civil law. A patent, for example, places a restriction on a third party, preventing him from using something, even if he unknowingly and independently created on his own, if it happens to have already been patented by someone else. Is a reasonable tax on corporations and on patented items actually theft? I deny that taxation necessarily equals theft.

Post 26

Thursday, June 25, 2009 - 5:53pm

Ted,

You said, "Is a reasonable tax on corporations and on patented items actually theft? I deny that taxation necessarily equals theft."

A couple of thoughts... Corporations don't have individual rights, but the tax is levied against property owned by shareholders, and the property is taken against the wishes of the owner. So in that sense, reasonable or not, it is theft. Government would have to give a different name to what they are doing... They couldn't say we are going to increase the personal income theft rates from 28% to 30% - they would have to have another word - taxes. If we define theft as the unlawful taking of property - then no amount of theft or confiscation would ever be theft. If we define theft as taking property from its owner without their permission then all taxes fall into that category.
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I don't understand what a "tax on patented items" is.

You said, "Corporate law and patent law are creations of the state." All law is a state creation, but these laws are the codification of existing relationships. Private firms used the concept of shares before the creation of corporate law. And patent laws are attempts to protect property rights - which existed before the laws.

(Edited by Steve Wolfer on 6/25, 6:00pm)

Post 27

Thursday, June 25, 2009 - 6:22pm

Privilege and Positive Law

Steve, do you understand that patents an corporations are positive creations of the state, of civil law? There are no such things as patents or corporations in a state of nature, while in a state of nature murder is still murder. That is an essential difference.

And of course all things being equal, the shareholders in a publicly traded corporation will prefer not to pay a corporate tax. Just like I would like it if my dentist would charge me to fix my cavities. The mere desire not to pay doesn't make it theft. The issue here is that the state gives artificial freedom from liability to the principals of a corporation. That limited liability isn't something that comes from the state of nature - it is another positive creation of civil law. The law prevents a corporations victims from collecting certain damages. Just as patent law prevents third parties from using their own inventions. This is fundamentally different from criminal law, which is negative, and tort law, which provides redress. Corporate and patent law does not provide redress, it provides privilege.

Some will argue that these positive creations of civil law are unjust.

But even if you think patents and corporations are okay, you cannot get away from the fact that they are creations of the state. If give you an apple, and the state demands a bite, that could be described as theft. The state did not have anything to do with the transaction. But if I can make a profit as a corporation selling apple pies because of my limited liability, or selling cored apples while no one else can do so without a license from me to use an apple corer, then my profits depend in part on the state restricting innocent third parties from pursuing their otherwise natural and reasonable goals. If it is legitimate for the state to create such protections, it is legitimate for the state to tax the benefits of such protections. You need not apply for a patent nor incorporate, if you do not wish to pay the taxes associated with those acts. Whether a state exists or not, you have a natural right not to be murdered. But you cannot complain that your "natural right to patent or to incorporate" has been violated if the state demands that you pay a tax as part of the privilige of benefitting from such privileges. There is no such thing.

Post 28

Thursday, June 25, 2009 - 8:37pm

Ted,

In a "state of nature" the paper and pen needed for writing a law do not exist. "State of nature" is not always a meaningful criteria for examining the law.

As we all know, the law is not perfect. The law that creates a corporation does not create "artificial freedom from liability", but rather defines a relationship of the shareholder as more like that of a lender - it is a mechanism for raising capital. You would agree that a bank should not be liable for the acts of a corporation just because it loaned money to the corportation. Without that kind of definition, lawyers would sue shareholders just because they exist. No one has been deprived of a right to sue that they had in 'nature'. The court can (and has) pierced the corporate veil when it is determined that incorporation is being improperly used to avoid liability.

All liability is limited and a purpose of the law is to define reasonable categories of liabilities. The ideological enemies of capitalism in general and of corporations in particular have attempted to paint the corporation as evil and this is one of their arguments.

Patent law is the attempt to define ownership in an area. Yes, it prevents a third party from using their own inventions if someone else registered first - maybe there is a way to modify the law so that this is a valid exception... but I suspect that it couldn't be done in a way that was equitable and enforceable. The first to register requirement is an artifact of making the law practical.

Unless you are denying that intellectual property rights are individual rights, there is the issue of theft. Theft existed in the state of nature before it was defined as law.

The ownership of my house is recorded and that record maintained by the county assessor and protects me in the case of someone trying to claim my place as their own. That recording is not a positive creation of civil law except to facilitate protection of property rights.

You said, "If it is legitimate for the state to create such protections [corporations and patents], it is legitimate for the state to tax the benefits of such protections." That doesn't follow. I could make a profit by borrowing from a bank instead of incorporating and the right to engage in transactions and to keep any profits I make does not change. The mechanism chosen to raise funds can not deprive me of my right to do business, or give the government ownership of some part of my money. And if I have the right to intellectual property, then it is not a gift that government allows me to keep profits. The legitimacy of a law depends only upon its relationship to individual rights. All profits are dependent, in a sense, on the existence of law, that doesn't justify government taxation - at least not one penny more than needed to sustain and apply the valid laws.

Post 29

Thursday, June 25, 2009 - 9:22pm

Yes, Steve, you are free in the state of nature to invent a pen, and then again so am I, and in the state of nature you cannot use the fact that you invented the pen first from preventing me from using one I invented.

In the absence of positive law, in the absence of a state, if someone commits murder, you have the natural right to punish him yourself unilaterally in self defense. Do you have a similar natural right in the absence of the existence of a state to insist on a patent right? Let's say we live on an island, a new species of seal comes to reproduce on the island. You skin one, come home wearing it as a raincoat, show the village, and then the next day you see that I, returning from sea, have coincidentally done the same thing, inventing a rain coat from one of the newfound seal's skins. Do you have a natural right, in the absence of a state of any sort, to stop me from wearing the coat unless I pay you a license fee? Do you have the right to attack me and stop me from using the coat? I am not asking if it might not be wise create a new law, and a mechanism to enforce it, and a means to pay for it (i.e., a tax) but whether in the total absence of such a law you have a natural right to restrict your neighbor, just as you have a natural right to self defense?

If you see the difference there, then I think it's a very simple step to ask those who benefit from positive payment law to pay for it, perhaps with a percentage tax on their profits from the patented object during the period while the patent is enforced. That doesn't sound like theft to me..

Post 30

Thursday, June 25, 2009 - 9:31pm

Ted,

Interesting points.

Steve,

I think the principle of taxation is justifiable, though it's application tends to be highly questionable. So I'm with Ted that taxation needn't necessarily be theft, even in the technical sense.

Three more points on top of the ones already out there.

1. I am taken by the analogy of nations as being similar to big clubhouses. They have their price. They might be the only gig in town, but that's not the clubhouse's problem. I understand that the analogy doesn't work for lots of people. It's far from perfect.

2. The tax evader takes the benefit of the jurisdiction's protection, but none of the burden, and at the expense of the jurisdiction. Sure, he didn't ask for it, but that doesn't preclude a theory akin to unjust enrichment.

3. How can one justify the existence of (minarchist) governance but not the means to run it?

Jordan

Post 31

Thursday, June 25, 2009 - 10:18pm

Ted,

I have the right to defend my property - with or without a state or its laws. The way you are describing this Ayn Rand would have no right to the profits from her books unless the state gave her the "privilege" of copyright law! And then you are claiming that she owes the government for creating the laws that recognize her rights.

We don't need stories of hypothetical, coincidental seal-skin raincoat inventions. The right to the product of one's efforts is a natural right. The law always comes later and this distinction of "positive" law and "asking" people to pay for protecting their right to their own property shouldn't sit well with any one who respects property rights.

If you can figure a better way to handle those few instances where two inventors come up with the same product at the same time, independent of each other, just say so. Until someone does, the existing law is immensely better than no law to protect inventor's rights.

In the absence of patent law, I still have the right to the product of my efforts, but I will have a difficult time protecting those rights and it will severely limit my economic options. Any rational society will recognize this and attempt to create the laws that benefit the economy by maximizing the incentives for investors.

Post 32

Friday, June 26, 2009 - 7:39am

Ted, it sounds like you're just saying if you expect someone to protect your intellectual property rights, you should pay for that service. Sounds reasonable to me, because in the absence of any compensation no one is obligated to perform any services for you . Whether people want to call that a "tax" or a "fee for services" is just a semantics issue.

Post 33

Friday, June 26, 2009 - 10:39am

John said, "Whether people want to call that a "tax" or a "fee for services" is just a semantics issue."

A man is asking for your money, if he is pointing a gun, I'd call him a thief. Just semantics? I don't think so.

Government performs many, many services. Unless a service and its payment is voluntary, it would not be wise to call it a fee - it is a tax.

Post 34

Friday, June 26, 2009 - 1:30pm

The problem is that taxes go into a big pool; an encompassing fund for all sorts of bureaucratic mischief. This is what prevents "taxation" from being a "user fee." If, instead of income taxes, etc., there was a laundry list of services with a check-box -- and you checked the public services you want to pay for, leaving the others blank -- then taxation wouldn't be theft.

As it stands, the taxation in the United States is theft.

Ed

Post 35

Friday, June 26, 2009 - 2:30pm

Hi Ed,

Nitpicking. I'd call it misfeasance rather than theft. Theft is seldom if ever determined by what the individual or entity does with the loot after taking it.

Jordan

Post 36

Friday, June 26, 2009 - 2:53pm

Jordan,

Nitpicking?

Property is taken from someone who is the proper owner of the property and the taking is done without the user's consent - and the taking is backed with a gun. How can that NOT be theft?

It doesn't matter what the thief does with the money after taking it. Ed's point was that you cannot reasonably call something a fee when it is totally separated from any discreet service... fee for what?
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I can't understand how you would use the term "Malfeasance." The Wikipedia article you linked to describes malfeasance as having the following elements:

Arises from a contract that creates a duty that does not exist at common law,
Where one or more of the parties fail to perform the duty, and
Where that failure to perform can be considered outright sabotage which causes intentional damage.

Theft is a much closer match to the practice of taxation than malfeasance.

Post 37

Friday, June 26, 2009 - 3:32pm

I maintain that even though it's always theft, that it becomes very different when it is restricted solely to what is needed to support our individual rights - at that point I'd say it was only theft in a technical sense of the word.

If taxation is replaced with voluntary services and fees, then it is not theft. If "public schools" were a line item on my annual tax bill, and I could choose to decline to pay that line item, and thus be ineligible to enroll my children in public schools, and the government allowed private schools to compete with public schools on a level playing field -- then that would be a moral, non-theft-based governmental service.

Of course, if the government actually allowed that, the private options would eventually drive the government out of business -- which is why government worker unions adamantly oppose privitization, and try to expand the government's role in everything from health care to finance to auto manufacturing.

And while one might argue that some services currently provided by government couldn't be privatized -- Steve appears to be implying that protection of some individual rights is one such necessary government monopoly -- the fact is that the line between minarchy and anarcho-capitalism can theoretically become so narrow as to not matter very much.

For example, the police that enforce these laws supporting individual rights don't have to be public employees -- the government could put that service up to bid to private contractors. National defense could be paid for via voluntary subscription fees, with anyone declining to pay being required to surrender their citizenship, and not being protected against depredations from foreign governments or agents unless they hire a private security company to safeguard them. And so on. Theoretically, I don't see any service performed by the government that absolutely couldn't be financed with a clever enough set of incentives and rewards that discourage free riding sufficiently that it becomes a manageable nuisance rather than a deal-killer.

In practice, this discussion is moot since we're doing a massive, century-plus-long retreat from minarchy into statism.

Post 38

Friday, June 26, 2009 - 4:26pm

Hi Steve,

I said misfeasance, not malfeasance. I linked to the malfeasance wiki so you could appreciate the context of the word. Here is a link focused on misfeasance. Sorry for the confusion.

Property is taken from someone who is the proper owner of the property and the taking is done without the user's consent - and the taking is backed with a gun. How can that NOT be theft?

Theft is the taking of another's property without consent or privilege. If the government is justified in taxing, as I've been suggesting, then it is privileged to take the tax, even without the tax-holder's consent. It's not theft. Nor does taxation turn into theft if the taxes are spent on stupid stuff. It's akin to a trustee horribly mismanaging a beneficiary's funds. That's misfeasance, not theft.

Jordan

Post 39

Friday, June 26, 2009 - 4:50pm