“Taxation Is Theft”? It’s Not the Only Thing

2017-12-25 – At this time of year we are awash in images of peace and goodwill, generosity and selflessness. Maybe it’s inevitable that we also are treated to their opposites: the Grinch and Scrooge—folks who want to take all the good things away from us.

Friday, President Trump signed a tax bill into law. I’m not going to debate the wisdom of that law. You probably already know what I think about it. Instead, I want to talk a little bit about the debate. And about one piece of argument I’ve seen repeated in a lot of places:

“Taxation is theft!”

As a liberal (or progressive or leftist or whatever I am), I’m supposed to argue against this. And I suppose I’ll come to that. But I first want to explore the idea of taxation as theft.

Here’s what I think it means. I think it means that you work hard for your money so you ought to be able to keep it all. Anything that interferes with your right to keep the fruits of your labor is theft. Am I onto something here? Is this a fair interpretation?

So along comes the government and takes a quarter of what you made (or whatever percentage). You don’t like that.

The problem with the taxation-as-theft argument is that it doesn’t go far enough. Your employer takes a percentage of the value of your work—even before you get it. Your employer’s take (off the top) is invisible, so you don’t normally even complain. But it is a fact of life. Your employer doesn’t work for its share in the value of your labor. You do the work, but you only keep part of what you earn. Your employer gets to keep the rest—because of the employer-employee relationship. You might say that the employer did so do something for its cut. The employer got customers to pay for your services. But it’s not the employer doing this, it’s other employees. And your employer is taking a cut from each and every one of those employees.

Are employers thieves (just like the government)? Marxists would say yes, but I’m not going to agree. I’m going to let you decide. But I would ask you to judge employers by the same standard as you judge the government. If you think that the government is stealing your tax dollars, you ought to also agree that employers are stealing a portion of the value of your labor—or the opposite: that neither of these transactions is theft. (Or give me a pretty good reason why you don’t reach the same conclusion for both employers and the government.)

It’s not just employers and the government who share in the value of your labor. Your landlord does or your mortgage lender. Your bank gets a share of your earnings when you deposit money with them. The list goes on and on. If you’re mad at the government over taxes, you ought to be mad at these people as well.

Or not.

But if you are not mad at your employer and your landlord or your mortgage lender or you bank, etc., etc., you don’t really have a gripe against the government.

At least not as a blanket assertion that taxation is theft.

The founders of our nation never said that taxation is theft. They understood that government needs taxes to “establish Justice, insure domestic Tranquility, provide for the common defence, [and] promote the general Welfare.” Their first stab at setting up a national government, the Articles of Confederation, failed by (among other things) not ensuring an adequate source of revenue for the government. Their second try, our current Constitution, corrected that defect. It created a mechanism for the national government to tax you, and this mechanism was further modified when the Sixteenth Amendment was ratified in 1913 to allow an income tax.

Our founders didn’t have a beef with taxation. They saw it as vitally necessary. What they did have a beef about was taxation “without representation.” They might have said that taxation without representation is theft. But taxation enacted with representation was an entirely different story.

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