Is Taxation Theft?

taxes are not theftCourtesy of American Voice of Reason.  This is an older meme, originating in 2014, but it’s been widely shared by some big pages like Being Liberal, and continues to make the rounds years later.  The meme makes a central claim that “taxes are NOT theft”, and then lists several other actions it claims are actual examples of theft.

This is a response to the popular “taxation is theft” memes, generally put out by libertarians, which a quick Facebook search shows are legion. It seems one side is saying taxation is theft, and the other that it isn’t, yet neither go very far in explaining their rationale. In order to sort this out, we first need an accurate definition of theft.

Merriam Webster defines theft as

a:  the act of stealing; specifically: the felonious taking and removing of personal property with intent to deprive the rightful owner of it

b:  an unlawful taking (as by embezzlement or burglary) of property

We can rule out the second definition here, as taxes are lawful. The US Constitution, as well as state, local and virtually every government on the planet provide a legal basis for taxes. However, if a government makes concentration camps legal that doesn’t mean it’s not murder, so the legality of taxes doesn’t go very far in proving they aren’t theft.

The first definition (the felonious taking and removing of personal property) needs to be explored further. There are two ways of acquiring someone’s property; by voluntary exchange or by coercion. The concept theft, relates to the latter. There are many forms of theft. A burglar could break into a house and physically steal a television. A fraudster could promise a new car and deliver a used one. A company could stiff its employees for an agreed upon job. What they all have in common, is that they are not voluntary exchanges. In short, theft is acquiring property by non-voluntary means.

Is Taxation Theft?

Now that we’ve analyzed what theft means, this question could also be phrased as: does taxation acquire property by non-voluntary means?

The answer to that should be quite obvious. In case there’s any ambiguity, economist Murray Rothbard sums it up quite well in Ethics of Libertywhich has conveniently been made into a meme.

Murray Rothbard taxation is theft

By any reasonable definition and understanding of theft, taxation (as it currently exists) must be included. However, since the implications of this statement obviously impact the moral legitimacy of the state, there are many arguments against the “taxation is theft” thesis. Here, here and here are some examples. Let’s examine the popular critiques to see if they have merit.

Taxation is Voluntary

This critique asserts that taxation is not really theft or reliant on force because it’s voluntary. Senator Harry Reid once used this defense in an interview. The absurdity of this position is quickly apparent, as seen in the video. Even if we file our own taxes or send in a check to the IRS, taxation is not voluntary for the very reason that force is threatened. We need only to imagine the difference in revenue that would flow to the state if taxes were truly voluntary to see why the state threatens force.

Taxation is “Club Dues” to Live in Society

taxes civilized society

This is a popular retort, but it proves nothing about whether taxation is theft.

The comparisons of taxes to “club dues” is no less convincing. No private club has the type of dues that compares to taxation, where some are required to pay hundreds, or even millions times more than other members. But, even if clubs did function this way, the comparison falls flat. A club is the rightful owner of a property or service, which they provide their members in exchange for a fee. In order to golf at a country club, one must pay dues. No dues, no access.

Extending this comparison to government is specious, as it presumes that the state, not individuals, are the rightful owners of all property. To say, “if you don’t like taxation, you’re free to move” is ceding that the government is the rightful owner of that person’s property. Otherwise, why must one move? If the mob shakes down a store owner for “protection” money, would we say they should move if they don’t like it? No, because the mob doesn’t have a moral claim on the property. To the extent the government owns certain things like roads, they could morally charge club-like fees, but extending this to simply living in society implies ownership over everything. Clearly, no club operates this way, as they’d have no right. What then, gives government that right?

The final nail in the “club” analogy’s coffin is to imagine how a golf club or a church might operate if they were able to fund themselves with coercive taxation.

The Social Contract

social contractThis is a more sophisticated version of the club argument. This critique asserts that everyone has tacitly entered into a “social contract”, in which we’ve agreed to abide by the government’s terms and conditions simply by living in society. Part of these supposed conditions includes being taxed. This argument falls apart when confronted, for the simple reason that there is no actual contract written out and no one has signed it. Not only would it not stand up in any just court of law, it would be void for vagueness! What level of taxation does the contract allow? 10%, 25%, 90%? Whatever the government decides? The whole notion completely removes objectivity or morality from the equation. The reality is that the “social contract” seems to include whatever the government says, right or wrong.

Furthermore, what if one objects to the “social contract” and explicitly says they don’t agree with taxation or how the government uses it? Can they opt out of this contract they never agreed to? No. Ostensibly they would have to leave (or be thrown in jail). By what right?! As with the “club dues” argument, it presumes that individuals have no right to their property, and the government ultimately owns and controls everything. This isn’t ignoring that individuals derive immense benefits from living in a society. They do, but that doesn’t mean society couldn’t be operated under different principles. It’s a non-sequitur to claim if one chooses to live in society they must also agree to coercion. It also doesn’t change the reality of what theft is.

For a more in-depth, scholarly critique of the social contract, read this.

Democracy Makes it Voluntary

taxation is theftThis critique claims that since we live with a democratically elected government, the act of voting makes revenue collection voluntary. This completely misunderstands the nature of government. Were Jews voluntarily committing suicide after the Nazis were democratically elected in Germany? Were black Americans voluntarily sitting in the back of buses under Jim Crow laws? Did Socrates voluntarily drink the hemlock in Athens? Governments are capable of many horrors and injustices, even when democratically chosen. If a group of people get together and vote for theft, that doesn’t change the definition or reality of theft.

It’s not Theft Because Government Provides Services

taxation is theft roadsThis critique claims that since the taxpayer gets some benefits (roads, court system, police, etc.) it’s not actually theft. This argument ignores the definition of theft. If someone washes your car without your consent, then forcefully demands $100, that’s a form of theft. It doesn’t mean the car wash wasn’t of value, just that the owner must agree to purchase it to be voluntary. The state provides some valuable services, but without a voluntary means of funding, they are still engaged in theft, particularly when some clearly pay more than they get in value. The question of how (or if it’s even possible) to provide these services without engaging in theft is a separate issue.

It’s Not Actually Your Money

This is the most honest of the critiques, as it cuts right to the issue of property rights. It argues that taxation isn’t theft because an earner has no real right to their pre-tax income. Since the market doesn’t pay everyone “what they deserve”, we can’t assume that people justly earn their income. After all, why does an NFL player deserve 100 times more than a teacher?

This begs the question, who or what determines if one’s income is just? If the answer is the state or collective, then how do they decide what is just? There can be no answer to that question that isn’t completely arbitrary. Conversely, the market does provide an objective means of justice. It’s a system of voluntary exchanges (provided it’s kept free). If one earns their income through voluntary exchanges in the marketplace is that not just? If a football player makes millions, it’s because a society has valued their talents enough that someone is willing to pay them that salary. How could another possibly have the moral right to take this property? Without a valid moral claim to the money, it’s theft to take it without consent.

The Rest of the Meme

The meme goes on to claim other items are theft. How do these stack up?

  • Stealing houses by fraudulent loans– if indeed there was a fraudulent loan, that would be a form of theft. However, if each party understood the loan conditions and the borrower defaults, taking the house is not theft.
  • Taking workers’ pensions- assuming these were contractually agreed upon, that would also be theft.
  • Giving government bailout money to corporations- this is theft, but only if taxation is theft!
  • Not paying a “living wage”- this is not theft, assuming each party voluntary enters into an employment contract.

Conclusion

Identifying taxation as theft is simply acknowledging reality. As long as taxation involves acquiring property through involuntary means, it’s theft. To argue otherwise leads to contradictions and bizarre rationalizations and evasions. Thus, this meme is wrong in its claim. Inquiring how to best fund services like roads and police, or if taxation (theft) is necessary in a civilized society are separate questions.

 

7 Comments on "Is Taxation Theft?"

  1. David Conklin | April 6, 2017 at 12:54 pm | Reply

    Ask Rothbard how many people have been shot for not paying taxes.

    >if each party understood the loan conditions

    The “if” is very important. Most people do NOT understand legal contracts. I was offered a loan for solar power. The conditions were simple: yes, I can pay off the loan early, no, I don’t get the interest back–i.e., I have to pay the full amount of principle and interest, even if I pay off the principle early. Secondly, the loan was secured by the house and land on which the panels would be placed. Most people would not understand that this contract means that the bank loaning the money aren’t interested in the panels and they expect you to default and then they seize your house and land.

    >assuming each party voluntary enters into an employment contract.

    The key word here is “assuming.” Secondly, it ignores the fact that the balance of power between the employer and employee are not equal.

    • There have been plenty imprisoned, or worse, from not paying taxes. You don’t have to shoot someone to steal their stuff.

      If you apply for and accept a job, and are free to quit, that’s a voluntary transaction and not theft. There is a balance of power; the employee can quit. The employer is powerless in that scenario. It happens all the time, with skilled and unskilled workers.

  2. David Conklin | April 6, 2017 at 1:15 pm | Reply

    >There have been plenty imprisoned, or worse, from not paying taxes. You don’t have to shoot someone to steal their stuff.

    That is an admission that Rothbard lied about people being shot for not paying taxes.

    >There is a balance of power; the employee can quit.

    You are missing the point. The question is, is there a balance of power in determining wages and working conditions?

    Some companies to keep from paying union wages (which some claim are too high) opt to pay their employees even higher wages. That tells you that even with union power backing the employees, the union wages were still low to what employers could pay.

    • It’s not a lie to say you’ll be shot. You will be if you refuse to pay taxes and resist the inevitable arrest. Everyone knows this implicitly, which is why they don’t let it escalate to that. People generally value their lives more than their money.

  3. David Conklin | April 6, 2017 at 2:55 pm | Reply

    Rothbard did not say that people could be shot. His statement implied that people have been shot, just as we know some people (very few) have been arrested.

    >resist the inevitable arrest

    Thank you; the shooting occurs because of the resisting, not for simply not paying taxes.

    One thing that I have learned is never trust anyone who lies, whether they do so explicitly or they imply the lie. Saves, lots of work–now I don’t have to check out the rest! I have also learned that liars are also incapable of using sound logic–like not even knowing that if they make a claim, they have the burden of proof. A “google it” is an admission that they have NO proof for their claim.

  4. “Thank you; the shooting occurs because of the resisting, not for simply not paying taxes.”
    “I have also learned that liars are also incapable of using sound logic”

    LOL

  5. David Conklin | April 6, 2017 at 5:08 pm | Reply

    Laughed one who does not.

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