The Problem with Saying Taxation is Theft

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It is hardly surprising that the phrase “Taxation is theft” has become a popular slogan in libertarian circles. After all, the closest thing to a universal tenet of the movement is the desire for the elevation of individual liberty over the collective, which usually translates to the minimization of the state’s intrusion on citizens’ affairs – that, almost of a necessity, means less taxes. It probably also helps that libertarians skew young and have a deeper-than-mainstream relationship with meme culture. So the slogan has both a receptive audience and an ecosystem in which to propagate.

And the idea is hardly new. The economist Murray Rothbard did a great deal to propagate the concept in libertarian circles. Rothbard argued that taxation was fundamentally appropriation without consent, and thus theft by definition. He even encouraged the view that there is no moral requirement to tell the tax collector the truth about one’s assets or income; just as no one is morally required to answer a robber truthfully when he asks if there are any valuables in one’s house, so no one can be morally required to honestly answer similar questions asked by the State, e.g., when filling out income tax returns. So, the idea is that the government is doing something to you (i.e. taking your property without your expressed permission) that no private citizen could do without being imprisoned for theft.

The eminent philosopher Robert Nozick even did Rothbard one better – he argued that taxation was, since it resulted in individuals effectively working without compensation part of the time, tantamount to slavery (it is somewhat unfortunate that Nozick has gone unloved by the current generation of libertarians; his influence on libertarianism as a serious branch of philosophy cannot be overstated).

Yet these titans of libertarian thought spent virtually the entirety of their careers within the academic milieu. They were concerned with theories of justice that did not necessarily take into account their applicability within the context of society as it is. The problem of that disconnect between the theoretic and real becomes glaringly obvious when it is moved from the safe harbors of academic cloisters and libertarian web groups.

Overcoming cognitive barriers to libertarianism

The problem is that ordinary people going about their daily lives do not believe taxation is theft. Neither do the many so-called “economically conservative and socially liberal” cohorts who are obvious candidates for conversion to a libertarian view of the world. The claim that taxation is theft is not intuitive to those of us (read: virtually everyone) who spend our lives within the bands of what might be called mainstream political discourse. Because it is so alien a concept, it can cause knee-jerk rejection by prospective libertarians.

When you are trying to convince people to change their ideology and to adopt a new way of looking at the world, and the proper relationship of state and citizen, you need to engage with them on a level that will bring them in, not push them away or alienate them. A big statement like calling taxation theft demands a defensive posture from the start, and that is hardly a position of strength from which to change hearts and minds. Instead, we need to focus our attacks on the failures of statist ideologies in practice and offer an alternative to those on the fence that they will find palatable. People are naturally conservative in the sense that they fear radical change. Taxes are such a fundamental part of life that trying to build a case around their total rejection will meet with failure. No one likes paying taxes. But there is a default belief in our society that they are a necessary evil, if not a positive good. When we open with “taxation is theft” we have to defend a big proposition, and we have to do it in the face of intuitive cognitive opposition. That is just bad argumentation strategy. Successful arguments have to play to people’s intuitions and gradually shift their thinking. Beginning in an adversarial posture guarantees that the people we approach are on mental defense, when we need them to be open to change.

Let’s focus on winning

There is also the simple fact that not all (likely a wide majority, in fact) libertarians actually believe that all taxation is truly theft. in practice, many libertarians are willing to accept taxes as a legitimate mechanism for funding certain frontline services, such as the military and courts. These libertarians may differ as to what sort of tax would be most legitimate (or least invasive), but they do not waste the energy to question the idea of taxes qua taxes. Whether the minimal state is funded by a flat-rate (or just flat) income tax, or through a sales tax or value-added tax, or even a broader-based economic transaction tax, there is still the perceived need for some kind of tax regime. The debate is about changing taxes to maximize freedom and limit the imposition of such taxes on individuals while retaining a sufficient tax-base to furnish the necessary basic services of a state apparatus. Yet even for these libertarians, the refrain of “taxation is theft” is still an easy fallback phrase; it is now something of a shibboleth of the movement. It is also sometimes just fun to say and it can spark a debate, something we fractious libertarian types relish.

None of this is to say that no one actually believes that taxation is theft. Many do, to be sure. How else could the phrase have gained such traction within libertarian circles? And those true believers are frequently the most active and vociferous voices in many libertarian communities. Unfortunately, that is a problem for libertarianism if it is going to be a movement for change.

Of course, the idea of an organized libertarian movement as a change agent is not viewed credibly by some libertarians, anarcho-capitalists, and other fellow travelers. Instead, many favor purity of ideology and the echo-chamber of those already initiated, to the harder task of engaging with the world as it is rather than it ought to be.

In all this I do not mean to argue that libertarians who are of the uncompromising persuasion are bad libertarians. Far from it! Libertarianism can ill afford factionalism and in-fighting. Rather, what I contend is that we should all reevaluate how we present our arguments to the outside world, and to the significant mass of citizens who might well be won over by our arguments if we are given a fair chance to explain ourselves. The way we get that chance is by positioning our outward persona, and our internal discourse, in such a way as to give us the widest chance to make those first vital inroads.

So let’s try to think of something better than “taxation is theft” to lead off discussions. We can do better. The country and the world need us to do better.

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John Engle

John Engle is a merchant banker and author living in the Chicago area. His company, Almington Capital, invests in both early-stage venture capital and in public equities. His writing has been featured in a number of academic journals, as well as the blogs of the Heartland Institute, Grassroot Institute, and Tenth Amendment Center. A graduate of Trinity College Dublin, Ireland and the University of Oxford, John’s first book, Trinity Student Pranks: A History of Mischief and Mayhem, was published in September 2013.

12 COMMENTS

  1. Taxation IS theft. But another truth is that the state as corporation of tax payers may legitimately ban all non tax payers from collectively funded facilities. Everything from roads to national parks, waste disposal to law enforcement and defence. To be libertarian is to say ‘taxation is theft, I will pay my own bills’ To say that we would prefer to pay per mile use of public roads or choose our own private security company rather than pay taxes for these is not a stretch of the imagination and would be readily understood by most people.

    • Just FYI – while some self-described libertarians see Nirvana as a place where everyone pays his or her own bills every month, nothing about the non-aggression principle mandates that state of affairs.

      To be sure, the free market is in part the McDonalds Restaurant pay-to-play system of funding production. But, the free market is also the Ronald McDonald House philanthropic system of funding projects. St. Jude’s Children’s Hospital, Physicians without Borders, The American Red Cross, the American Cancer Society, Goodwill Industries, the Bill & Melinda Gates Foundation – all that is equally part of the free market and all of those institutions are critical to how libertarians envision society working; indeed, those kinds of philanthropic institutions probably are the bigger part of free markets than the pay-to-play part of the free market.

      Taxation is theft doesn’t require “rugged individualism” and libertarians are the first to recognize that in society there is strength. Free trade is about building social networks through win-win deals. The free market is not about “every man for himself.” It’s rather “one for all and all for one.” Nothing about a libertarian society requires that every driver pay “per mile” of road use, or that taxes are the only way of paying for core governmental functions.

  2. Why is it that collecting taxes is wonderfully efficient – but the spending of these taxes is woefully inefficient – and in many cases (most?) downright wasteful?

    IMO people accept the burden of taxes – but it’s deployment of these taxes, and given that the amount of individual taxpayers contribution bears no relationship as to how these taxes are dispersed – is the bit that gets up peoples noses.

  3. “In practice, many libertarians are willing to accept taxes as a legitimate mechanism for funding certain frontline services, such as the military and courts.”

    I’m not sure who that would be since the idea of a “legitimate” tax is simply at odds with core libertarian thinking and certainly violates the non-aggression principle.

    But, that’s not critical to your point that one has to choose one’s thoughts carefully to be most persuasive. Michael Cloud spent a fair amount of time urging libertarians to remember that slapping people hard in the face isn’t always the best way to get them to wake up.

  4. Taxation of factors produced by human effort is theft. But this is only necessary to mitigate the theft of excluding others from natural resources without compensating them from their loss.

    A Land Value Tax is merely returning stolen property.

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