Should we pass the hat? We probably wouldn't raise enough to finance the government, and, by and large, nearly all of us agree that we need a government of some kind. At the moment, we've got a very expensive one.
Since we can't raise enough money through voluntary contributions, we have to resort to coercion, e.g., fining people, levying penalties, taking property, and, in some cases, sending non-payers to jail. Question is: what is the nature of this coercion?
Think of robbery, defined loosely as the taking of property through force or the threat of force. Taxation seems to fit within that definition except for the fact that taxation is lawful, robbery isn't. The reasons are obvious. Nonetheless, lawful or not, the immediate result to the victim/taxpayer is the same: money which could have been spent by its owner will now be spent by government.
Often, but not always, the victim/taxpayer will benefit, eventually, e.g., infrastructure, police protection, national defense. But the benefit is, to a large extent, not shared by all who pay and certainly not in proportion to what they pay. Taxes which assist the disadvantaged may or may not (some would say hardly ever) provide any general benefit to victim/taxpayers in general.
An important question to be raised when taxes are proposed is: do the long-term benefits outweigh the certain detriment which the victim/taxpayer suffers, i.e., loss of his purchasing power.
This question is a "subquestion" (a term just coined) of the most important question to be raised when any government imposed economic event (any tax, any restriction on commerce) occurs. That question is: what are the secondary and tertiary consequences of the event.?
Certainly, when the government passes out subsidies to farmers or provides loans for business startups, those and similar groups get an immediate benefit. The press will publicize the jobs created, the businesses started, the low farm prices, and will proclaim the success of the legislation or judicial decree. But that is only half of the equation. The other half is invisible
The money taken away would have had economic benefits also. These benefits will be lost. When millions of victim/taxpayers are deprived of a portion of their earning power, they will be deprived of goods and services and investment returns, and the effect of that loss will be, nationwide, significant, maybe more significant than any benefit from the tax or new government regulation.
If the government passed a law forbidding Californians to travel to New York, it would create a firestorm. Such a law would be condemned as unconstitutional and as an intolerable restriction of freedom. The law would last only as long as it would take to obtain an injunction from a federal court. But,
The government can impose the same restriction of freedom by removing a victim/taxpayer's wherewithal to travel.
Every tax and every government regulation must be regarded as a restriction on the freedom of victim/taxpayers. And every such restriction should be balanced very carefully against whatever benefit may have ensued from such a restriction.
The immediate effect of any tax or government regulation is to deprive most of the citizens of the country of some freedom. To that extent, it equals robbery without the immediate trauma of a threat with a pistol. We must collect taxes, but we ought to be aware of the effects.
Whenever any politician talks about the reduction of taxation constituting a "loss of revenue," he/she should be brought up short and informed that taking $5 from a citizen's pocket rather than $10, is not a savings to the victim of $5.
Since we can't raise enough money through voluntary contributions, we have to resort to coercion, e.g., fining people, levying penalties, taking property, and, in some cases, sending non-payers to jail. Question is: what is the nature of this coercion?
Think of robbery, defined loosely as the taking of property through force or the threat of force. Taxation seems to fit within that definition except for the fact that taxation is lawful, robbery isn't. The reasons are obvious. Nonetheless, lawful or not, the immediate result to the victim/taxpayer is the same: money which could have been spent by its owner will now be spent by government.
Often, but not always, the victim/taxpayer will benefit, eventually, e.g., infrastructure, police protection, national defense. But the benefit is, to a large extent, not shared by all who pay and certainly not in proportion to what they pay. Taxes which assist the disadvantaged may or may not (some would say hardly ever) provide any general benefit to victim/taxpayers in general.
An important question to be raised when taxes are proposed is: do the long-term benefits outweigh the certain detriment which the victim/taxpayer suffers, i.e., loss of his purchasing power.
This question is a "subquestion" (a term just coined) of the most important question to be raised when any government imposed economic event (any tax, any restriction on commerce) occurs. That question is: what are the secondary and tertiary consequences of the event.?
Certainly, when the government passes out subsidies to farmers or provides loans for business startups, those and similar groups get an immediate benefit. The press will publicize the jobs created, the businesses started, the low farm prices, and will proclaim the success of the legislation or judicial decree. But that is only half of the equation. The other half is invisible
The money taken away would have had economic benefits also. These benefits will be lost. When millions of victim/taxpayers are deprived of a portion of their earning power, they will be deprived of goods and services and investment returns, and the effect of that loss will be, nationwide, significant, maybe more significant than any benefit from the tax or new government regulation.
If the government passed a law forbidding Californians to travel to New York, it would create a firestorm. Such a law would be condemned as unconstitutional and as an intolerable restriction of freedom. The law would last only as long as it would take to obtain an injunction from a federal court. But,
The government can impose the same restriction of freedom by removing a victim/taxpayer's wherewithal to travel.
Every tax and every government regulation must be regarded as a restriction on the freedom of victim/taxpayers. And every such restriction should be balanced very carefully against whatever benefit may have ensued from such a restriction.
The immediate effect of any tax or government regulation is to deprive most of the citizens of the country of some freedom. To that extent, it equals robbery without the immediate trauma of a threat with a pistol. We must collect taxes, but we ought to be aware of the effects.
Whenever any politician talks about the reduction of taxation constituting a "loss of revenue," he/she should be brought up short and informed that taking $5 from a citizen's pocket rather than $10, is not a savings to the victim of $5.
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