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Tax is Theft?


I can’t believe this has to be said – even to people on the left but here it goes…

There are some who think that in all situations "tax is theft."

"Forcing people to pay taxes is stealing their money."

One "mutualist" even told me that a preferential alternative is a "friendly society" but as I pointed out to him they often rely on "dues," Which, of course, is synonymous with taxes. If there is a common need and all chip in to fund it then who cares if we call it dues or taxes? Shit, we can call it a "premium" for all I care. A friendly society that requires the payment of dues will likely respond to someone who expects to enjoy the benefits but says paying dues "is theft" by saying, "Fuck off!"

Public goods and services almost always affect everyone whether directly or indirectly. I do not draw Social Security but I benefit from the program since my grandparents who are recipients can (barely afford) to live by themselves and not have to live with me. By being able to retire and be a SS recipient this also frees up labor at the workplace they retired from. Ending the program would have adverse effects on the economy.

Or take public education. If education were private then due to social inequality there would be a good number of people who would simply go without an education. A large portion of a society that is uneducated is not a good thing. Even if I am not in school, or if I don’t have children, or if I do have children and they are in private schools, I still benefit from public education.

My point here is that benefiting from public goods and services but not helping pay for them is what would be theft!

Taxes can and in many isntances do take care of the externality problem. It also resolves the free rider problem. The classic example here is pollution. If cleaning up pollution were done privately instead of publicly via a tax then I have an incentive to misrepresent my interests and downplay how much I am affected and take a free ride on the payments and goodwill of others. A tax, especially a progressive one, would resolve this free rider problem and be fair.

Anti-tax rhetoric, whether from the left or the right, needs to be closely examined and considered because some taxes are:

  • too high – the "defense budget" is way out of control. We are 5% of the global population but we spend half of the world’s military budget. Even cutting it down by a factor of ten – which would put our spending in proportion of our size – would still put us among the top five largest budgets, if not still the highest!
  • while some taxes are too low as is the case for Social Security. Because of the cap I often say that it is fucked up that Bill Gates sees less than half of one percent of his annual income taxed for the program while a single-mom working double-shifts at IHOP will see 100% of hers taxed for the program. Even though more money is coming in than going out and this is not projected to change until the 2040′s (assuming no changes to the program) the cap should be removed for purposes of fairness and to be able to increase benefits to reflect the cost of living. Another example is the income tax for the top bracket. During the Golden Age of Capitalism it was 91%. Now it’s 35%. This gift to the wealthy has resulted in cuts to social programs. Giving them this tax cut has stolen from the poor.
  • and some taxes that should exist don’t, like Medicare for All. This tax would actually save us money as compared to how much we pay for in premiums, copays, prescription costs, etc. Plus it wouldn’t leave tens of millions uninsured and underinsured, nor would it cause over half of all bankruptcies to be filed due to medical bills (which over half of those have insurance). Many businesses, especially small businesses, would get a tremendous break from not having to deal with the costs of private insurance.

Anyway, in many circumstances taxes are not theft, but not paying them would be.

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