World History/Tax term paper 14478

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Tax Day Reflections - fair fairnessEvery year when tax day comes along, people start talkingabout "tax fairness." Yet strangely, I hear very few peoplediscuss the fairness of taxation itself. What right does thegovernment have to force people to pay for services thatthey may not even want? In particular, what right does thegovernment have to take money from people who neverconsented to pay? Almost everyone sees that consent isthe proper moral foundation for other relationships. To takeone eloquent slogan: If a woman says no, it's rape. Unlesswe can show that we really consent to pay taxes, we cannotavoid the parallel maxim: If a taxpayer says no, it's theft. Many people think that we consented to pay taxes in theConstitution. The cherished myth behind our ownConstitution as well as those of many other countries is thatat one pristine time, the people consented to all of theseemingly involuntary practices we endure today. However,no one alive today ever signed the Constitution, so howcould it bind them? Parents could only bind themselves, nottheir children, much less all their descendents throughouthistory. Moreover, the consent that ratified the Constitutionwas merely the consent of various voting majorities, who"consented" not merely for themselves but for those whoexpressly denied the Constitution their consent. Theminority voters might well protest that no one else has thepower to offer their consent for them; a person can only offerconsent for himself or herself, not for another. Other people think that we consent to pay taxes merely byliving in the country; but this just begs the central question:Why can't I both remain in this country and refuse to paytaxes? If a kindergarten bully told his classmates that they"really" consented to get beaten up since they could go toanother school instead, we could only laugh at his effrontery:for the bully has no right to present this unfair choice in thefirst place. Similarly, only after it can be shown that I ambreaking a voluntary agreement by refusing to pay taxescould my consent be inferred from my decision to remainwithin the boundaries of the United States. I can onlyconclude that for all its claim to virtue, governmentfundamentally rests on injustice, the injustice of takingmoney from people without their consent. Everyone whocomplains that current taxes are unfair is perfectly correct;but the problem with taxation is not its distribution, but itsvery existence. It was precisely this conclusion that led Thoreau, the mostfamous critic of the morality of taxation, to this startlingposition: "I hearily accept the motto, - 'That government isbest which governs least;' and I should like to see it actedup to more rapidly and systematically. Carried out, it finallyamounts to this, which I also believe, - 'That government isbest which governs not at all;' and when men are preparedfor it, that will be the kind of government which they willhave." To most people, this conclusion sounds soimpractical that they can only reply: We will never beprepared for that kind of government! But I prefer to at leastconsider the alternatives to taxation before I resignedlyendorse so great an injustice. And the voluntary, consensual alternatives to taxation aremany. Most obviously, there is the free market. If peopleneed something, they can pay others to produce it for them. Many of the largest functions of modern governments couldeasily be supplied privately: education, old-age pensions,medical insurance. While economists frequently defend thepower of the market to deliver the goods, they easily give upin despair when profit-making business seems to be anunworkable solution. But where traditional business fails,

 

perhaps the solution is not tax-funded services but adifferent sort of voluntary and mutually beneficialarrangement. Markets are not the only sort of voluntaryorganization: extended family, clubs, homeowners'associations, merchants' associations, and self-help groupscould supply everything from a safety net to streets, fire, andpolice protection. Finally, there is private charity: over $120billion dollars strong in 1990. With the abolition of taxation,we could expect this figure to rise since people would havemore money to give. True, there would no longer be a taxbreak for charity, but all of us would have so much moredisposable income to give, along with the knowledge that wepersonally, rather than the government, are responsible forgiving the riches needed to right the wrongs that we perceivein the world. Even if charity remained unchange, I submitthat $120 billion by itself is plenty to care for the truly needy -mainly children and the severely handicapped - who can'thelp themselves. As an economist, I am sure that many people will say thatgovernment is absolutely necessary to supply "public goods"- goods that benefit everyone, even though it is impossibleto charge for them. National defense is the best example -the military protects us all, even those who don't pay. What is puzzling is that the same people who normally findeconomists' reasoning narrow and unrealistic find thisargument so convincing. The argument assumes thatpeople utterly lack any moral sense, any willingness to dotheir fair share voluntarily, just because they think that that isthe proper way to behave. Flesh-and-blood human beingsare not "economic men," interested solely in maximizingtheir personal wealth; they have a moral sense. It may notbe wise not to rely on someone's moral sense too heavily;but all that we need to enjoy the voluntary provision of publicgoods is for some reasonable percentage of people towillingly donate some reasonable fraction of their time orincome. But suppose we take an extremely pessimistic view of ourfellow human beings. Even then, there is an innercontradiction in public goods theory. Why? Because if youcreate a government to solve the public goods problem, youcreate a new public goods problem: the public good ofcontrolling the government. Everyone benefits if thegovernment stays within its appointed bounds, even thosewho don't take any effort to keep their government in line. And if you take such a dim view of human nature, can youexpect politicians to be any better? This is hardly anacademic in the twentieth century tens of millionsof people have been murdered by their own out-of-controlgovernments. In sum, government isn't any solution to thepublic goods problem, because it is the primary instance ofthe problem. The only real solution is to convince people tovoluntarily do the right thing. If you can convince them,government isn't necessary; if you can't, government willjust magnify the problem. Or to express the problem slightlydifferently: you must determine who you trust more tovoluntarily do the right thing: politicians, or the public atlarge. Our century's grim history of political barbarity makesone hesitate to choose the former. Morally, taxation is unjust; practically, it is unnecessary. Yettaxation is unlikely to disappear in the near future; so what isthe right thing to do in the meanwhile? Thoreau's advice isagain sound: "It is not a man's duty's to devote himself tothe eradication of any, even the most enormous wrong; but itis his duty, at least, to wash his hands of it, and if he gives itno thought longer, not to give it practically his support." Which means: Don't work for the IRS, never support highertaxes on anything, and never let anyone pretend that youpay taxes of your own free will. Taxation is always theft,and the more people hear this insight repeated, the soonerthey'll see taxation for what it is.

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