While it’s true that whether you hold someone at gunpoint yourself or you have the government do it for you, taking things that don’t belong to you is always theft – regardless of purity of motive. However, taxes have implications well beyond theft. Originally a funding mechanism for an ever-expanding and enveloping centralized government, taxes became a tool along the way that allow politicians to experiment and find ways of manipulating and controlling behavior, attitudes, and (most of all) voting practices.
A graduated system of income taxation was never really intended to be a “fairer” way of taxing people. It may have been billed as a way to make taxes have less of an impact on the poor and allow those who have more to pay more, but the reality of it is this: it was really just a way to make it so that a minority of people pay most of the taxes so that when government raises those taxes, politicians don’t get sent home packing. As long as you do things that effect a minority of the voting public, you don’t get the rest of the public voting against you. By weighting taxes on the minority, you can manipulate the majority to keep you in power.
When US income taxes went into effect in 1913, those who were “married filing jointly” did not have to pay any income taxes unless they made greater than an inflation adjusted amount of $444,490. So, very few people paid income tax at all at that point in time. Today, slightly more than a majority of people pay income taxes, but the top 15% or so pay nearly 80% of all income taxes. Whether they are stealing most of the operating capital from the top 2% or the top 15%, politicians can still easily manipulate the public into keeping them in office, as they most typically do. If you consider both sides of the traditional two political parties, they begin to look more and more alike, if for no other reason than the fact that both have people hanging around in office for decades. A more suspicious mind might think that perhaps they use one another to provide the illusion of something different to maintain their dual position of power, while manipulating the voting public by crafting policy that affects the fewest number of people.
I might also add a more nefarious reason politicians might have an affinity for a graduated income tax. If you can put a cap on wealth (even if it’s not an absolute cap), then you can damper growth of wealth and maintain better control over the population. If capitalism runs too freely, people begin to realize that it’s themselves who have the power and not government. By attempting to create some level of diminishing returns on growing wealth, government can better manipulate how wealth is attained and, at the lower levels, make sure that government is the primary distributer.
Beyond income tax, other taxes are also intended to operate as manipulators. We have several obvious ones that don’t even hide what they are trying to do, like so-called “sin” taxes. We tax alcohol and tobacco in a supposed effort to curb drinking and smoking. While many actually do see this as a well-intended preventive, the truth of the matter is that once these taxes are in place, they become a relied-upon revenue for the state. If the state is to maintain its revenue streams, it must encourage the very behavior it purports to try to curb. If cigarette taxes help to fund schools and pave roads, what happens when people begin to quit smoking? And what about well-intended taxes on carbon pollutants? Do you really want the government stuck in the position of needing more polluters in order to keep the funding rolling in?
Less obvious taxation manipulators might include something like a driver’s license. Most assume the intended purpose of a driver’s license is to make it so that a person can’t drive without completely knowing how to operate a vehicle at a proficient level. It makes sense. That’s what we all want. No one wants a five-year-old maniac that’s used to bumper cars barreling down the freeway, and no one wants that 16-year-old that could never pass the test to be hitting mail boxes and backing into other cars (or even people). But, even though a driver’s license is not an enormous expense in most cases, it’s still significant for the poor. If you can think, for a moment, like a politician, if a driver’s license is not affordable for the poor, you can keep them cash-strapped in a place with fewer jobs and fewer opportunities and reliant on government for help. I’m not saying we don’t need something to ensure driving proficiency, but rather pointing out how nearly all forms of taxes involve potential manipulation.
Sales taxes provide the illusion of choice. Sure, you could build, grow, or create your necessities, but that’s hardly truly feasible if you want to have a modern, comfortable lifestyle. Gasoline taxes aren’t even really noticeable anymore. They are already built into the price you see at the pump. Raise them, and people just think the price of gasoline went up. Want to control driving? Then control the price of gasoline.
The capital gains tax is usually lower for higher income people than income tax. At first glance, it might appear government desires to encourage investment (which is manipulation in and of itself), but also by taxing capital gains separately from income, it allows government to more directly have an influence over assets in the economy. When taxed as income, gains on investments are not able to be manipulated specifically, and naked manipulation of specific assets is too obvious. So, by raising and lowering the capital gains tax rate, government can influence capital markets and assets. Why is the capital gains rate only lower for higher income people? Because it further controls operating capital at the top tiers, allowing for better management of the largest economic producers. it also pulls capital gains off the income scale so that more people have to pay, yet still a minority.
All taxes can be used to manipulate. Sometimes the manipulations are well intended, honest, and open. Sometimes, manipulations are just unintended consequences of a tax being in place. However, I believe that there is a good reason why we have so many dozens of different types of taxes. It’s because it supports the power of government to impose its will onto the people by attempting to use us all as lab rats to further their goals. If government wants to encourage certain behaviors that it wants, it can change some tax level somewhere to do it. And, usually because it affects a minority rather than a majority of people, the largest portion of the population just yawns in indifference and allows it to occur without a second thought.
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