There’s a lot of tax talk going on right now. Inevitably, every time tax decreases are discussed, at the same time, a chorus of voices shouts out, “But how are we going to pay for that?” It’s an interesting question. The question presumes a lot of things that are antithetical to what people commonly understand as certain innate knowledge. It assumes that the money being collected is already “ours.” It assumes that taking less of peoples’ money must somehow be recompensed by those who benefit from having less of their money taken.
Let’s begin with the idea that a tax cut means a shortfall in revenues for the state. I borrowed a chart from Forbes Magazine in an article by Mike Patton, entitled “Do Tax Cuts Create Revenue?” You can see below that a constant downward drop of the top bracket of US income tax has coincided with an increase in total revenues from 1960 to 2011. Now, that of course, would not explain the totality of it all. There, of course, were other things at play as well.
Total tax revenues for the US federal government are affected by vast numbers of influences. Everything that influences the economy also influences tax revenues, as does all other manner of tax policy of all taxes of all kinds. However, at the very least, this graph makes a pretty good point. Total revenues have increased even as the top bracket has been cut. Whether it was not due directly to only those cuts are irrelevant to this discussion. Ultimately, the state gets along just fine even when that top bracket is cut.
However, before becoming too bogged down in this particular discussion, I’m not convinced whether tax revenues increase or decrease after tax cuts is the right discussion anyway. This is the age-old ploy of reframing things and bringing about debates to hide the real debate politicians don’t want us to have. That is, as long as we are debating the merits of certain tax policy with regards to tax revenues, we are neglecting the debate on the morality of the taxes to begin with.
It is impossible to “pay” for something that is a shortfall in collecting what was never yours. Whether reducing the amount of something you have forcibly taken – under various means of extortion, from other people – will reduce or increase revenues from the state is not a valid debate. What is a valid debate is whether that property should have been forcibly taken at all. Under all other circumstances, when people, through means of force, take what does not belong to them, we call it either extortion or theft. The fact that the state is the perpetrator does not negate this fact. Whether it is the only way to pay for the various activities the government performs does not negate this fact. No manner of false justifications can cover up the fact that taxes are still the forced confiscation of others’ property.
One of the very first lessons we learn as children is that it is morally wrong to assume the property of others is our own. Even in communist countries, theft is considered illegal (unless performed by the state). It’s inarguable that the property of others belongs to all. It is self-evident from the time we are born. It does not matter how much money or property another person possesses, assuming that property belongs to you by virtue that the person has more is still morally corrupt.
As long as politicians are successful in maintaining a debate on the fairness of tax policy as it relates to how much each person pays, and as to whether tax cuts increase or decrease revenues, then the real debate will suffer. The poor will become convinced that evil, wealthy individuals and corporations are taking their money, while the obvious “fat cat” is actually the state that is the real perpetrator of taking their money and keeping them disadvantaged and captively poor. It is high time that we refuse to debate “How do we pay for this?” It is best to simply refuse the discussion and instead debate the morality of assuming the property of others belongs to the state. It doesn’t matter how much wealth you have. The poor are extorted as much as the rich, and it is not at the hands of the rich that they are extorted. Let’s focus on the real perpetrator against fairness – the state.
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