Debunking "Taxation Is Theft"
Money is not really your property.
Ahh, tax season: that special time of year when Americans must choose between paying Turbo Tax to guide us through the Byzantine tax system the software company lobbies to preserve, or risk going to prison.
Though I do not wish to pay taxes to the American Empire, I see the concept of taxes as a social positive. My view contrasts with many on the right, specifically libertarians, who believe “taxation is theft.” This curt and catchy phrase has enabled the anti-tax message to spread far and wide, to the point that non-libertarians commonly echo it. Given its tax season, I find it’s the perfect opportunity to debunk the “taxation is theft” argument.
The “Taxation Is Theft” Argument
To avoid straw-manning, I’m taking the argument right from the horse’s mouth. Below are two essays arguing taxes are theft written by self-described libertarians.
Is Taxation Theft? By Michael Huemer (Libertarianism.org)
Taxation is Theft! Or… Is It? By “Gregory D.” (The Havoc Journal)
A good summary of the anti-tax argument comes from Heumer. He states:
“When the government ‘taxes’ citizens, this means that the government demands money under a threat of force: if you do not pay, armed government agents will lock you in a cage. This looks like a clear case as any of taking people’s property without consent. So the government is a thief. This conclusion is not changed by the fact that the government might use the money for a good cause. That might make taxation a socially beneficial kind of theft, but it is still theft.”
Both authors make the point that whether or not tax revenue is used for good, such as feeding starving children, it is still “theft.” After all, stealing bread to avoid starvation is morally right, but it’s still stealing. They also reject the argument that taxes are part of the “social contract,” Jean-Jacques Rousseau’s theory that democratic governments are legitimized by the citizenry and therefore have the right to control the population. To them, the social contract isn’t real — “Nor has anyone signed it” (Huemer). Libertarians also find the argument that taxes are the price of social order irrelevant. In their eye, just because the state provides services doesn’t mean it can take things from you without your consent. Huemer summarizes this by claiming robbing someone of $20 and giving them something of greater value is still theft, as the robbed did not agree to the trade.
Both essays center on the central libertarian belief that property rights are inherent. To them, the rights of ownership are not granted by a government but are natural, just like the right to free speech. According to libertarian thought, your property would still be yours if the U.S. government dissolved today. As the government did not grant you your property rights, taking it through taxation makes the government a thief.
However, both authors put caveats in their essays, one that is seldom included by the online libertarian edge lords who hold up Atlas Shrugged as a reason they shouldn’t have to pay taxes (*cough*cough* Elon Musk *cough*cough*). While the authors restate they believe taxes are theft, they also say taxes are necessary, as the government needs to exist so society doesn’t collapse.
“Although theft can be justified, it is usually unjustified. It is wrong to steal without having a very good reason. As an example, you are not justified in stealing money, say, so that you can buy a nice painting for your wall. Similarly, if taxation is theft, then it would probably be wrong to tax people, say, to pay for an art museum.” - Huemer
“So, while I can say, ‘Yes, taxation is theft,’ I can also appreciate that taxation is a reality that is not changing any time soon, and is ultimately inconsequential to me.” - Gregory D.
To summarize, libertarians believe:
Money is property and no one — including the government — has the right to take your property without consent.
Doing so is theft, therefore taxes are theft.
What tax revenue is spent on is irrelevant: theft is still theft.
Though taxation is theft, it is still necessary.
Though it might sound compelling, this argument is plagued by the cardinal flaw of libertarianism. Whether articulated by the long-dead John Locke or a current member of the CATO Institute, these claims all start with the faulty premise that money and land are the undisputed property of the individual. “Property” implies that the owner is the complete master of the item. They can freely trade, bequeath, or dispose of said item.
Property is the most complete right to something; the owner can possess, use, transfer, or dispose of it. — Legal Information Institute, Cornell Law School
When discussing taxation, we’re generally talking about two items: money and land. As neither is inherently an individual’s property but the product of greater society, it is untrue to claim taxation, which is how society recoups partial value of the total value it enables individuals to create, is theft.
Let’s start with money, which we’ll divide by the two ways it can be obtained: profit and wages.
Where Profit Comes From
All profit is a result of society. For an American business owner to create profit, they need to use public goods: they require state-educated laborers who can count and read, cops and firemen to protect their buildings, public roads to ship goods, and the government-created internet to sell their services. Without these, they couldn’t earn a single penny.
But all of these public goods pale in comparison to the government’s chief economic role: the enforcement of contracts. Without contracts, businesses can’t operate. If they tried to buy or sell things absent binding agreements, the American economy would be one long chain of people ripping each other off. Whether Chevron is buying oil drills or selling you a gas station candy bar, the company can only engage in exchange because it knows that if you refuse to pay, the government will enforce it. A perfect example of this enforcement is how Elon Musk came to own Twitter. After offering to buy the company at 38% above valuation, Musk realized he overstepped and tried to back out of the deal. Twitter’s owners sued Musk, who relented and agreed to purchase Twitter the day before the trial began.
If the government did not fill this crucial role of enforcing contracts, then there could be no transactions, never mind profit. Everyone would be lying and stealing, all day every day. Libertarians might claim that something can still be their property in this hypothetical chaos, but this argument is self-defeating. Property means you have a right to something. If money (or land, as we’ll soon cover) is only yours while you’re awake and able to protect it from being stolen, you don’t have a right to it. You’re simply guarding it. Given all profit comes from society’s willingness to provide public goods and enforce contracts, taxation is simply how the public that upholds these conditions recoups some of the value it enabled others to create.
But What About Workers? Should Wages Be Taxed?
Even if the person in question is not a capitalist but a worker, taxes are still not theft. Under America’s capitalist system, workers are not paid the full value of their labor, but a fraction of it, called a wage. While I understand why some workers are reluctant to fork over part of an already-reduced income (I know I am), even the value created by workers does not occur without social contributions.
Workers create value by applying their labor either directly to the land or a product of it. Every industry, from coal mining to software companies, only exists because of land. Don’t believe me? Try finding a job that can be completed without wood, oil, cobalt (which powers computers and phones), livestock, or any other natural resource that makes up the tools necessary for production. Therefore, whether a worker exists in a capitalist state or a socialist one that awards them the full fruits of their labor, they still depend on society’s permission to work an area of land. As some land is more valuable than others (an hour working a gold mine creates more than an hour working a rock quarry), taxation is how uneven privileges are rectified. Even in our capitalist system, some workers earn more than others simply because they’re lucky enough to exist in a certain space or time. For example, tech workers enjoy significantly higher wages than their blue-collar counterparts. Therefore, regardless of the socialist or capitalist structure in which they exist, it is more than fair for society to reclaim some of the worker’s created value via taxation, so that it may be distributed to non-workers, who are also vital to social pillars.
Conclusion
Whether money is obtained as a wage or a profit, one cannot claim it is an individual’s “property,” as they are not its complete master. As the above definition states, if something is your property, you can dispose of it. Of course, it is illegal to dispose of or destroy money. Now, libertarians might say “You can’t destroy money only because of a law,” but there’s a good reason for that law. Currency is not actually yours, but the property of the greater society (in our case, the U.S. government) that creates and values it. It is a collective instrument to facilitate the distribution of goods that makes our economy run. If people were allowed to destroy that money once it was in their wallet, then everyone could shred their greenbacks right now, collapsing society overnight. Of course, this is not allowed, because money is a socially agreed-upon asset.
Okay — so money isn’t property. But what about land? We’re already running long, so I’ll explain the reasoning for taxing land in a forthcoming article. Make sure you subscribe so you don’t miss it.
What do you think about my arguments for why taxation isn’t theft? Share your thoughts in the comments, though please remain respectful to one another.
Money is not even real. We are talking about taxing a fiction that only exists because society says it is a thing. And like so many of the fictions our species has created, it now controls us.
I find the libertarian view to be self-servingly detached from reality.
"Property means you have a right to something. If money (or land, as we’ll soon cover) is only yours while you’re awake and able to protect it from being stolen, you don’t have a right to it. You’re simply guarding it. Given all profit comes from society’s willingness to provide public goods and enforce contracts, taxation is simply how the public that upholds these conditions recoups some of the value it enabled others to create."
By this logic, not even governments or states would really "own" anything, they'd just be collectively guarding things. How can then a government grant rights of usage to property it does not itself own? This would seem to defeat the entire concept of property. Even collective ownership needs to be based on some kind of right to own, derived from somewhere or something.
If your argument is that a modern state is a form of collective ownership whereby nobody owns "privately" anything on their own, but all property is socialized, i.e. merely granted as a form of privilege by the collective, which may choose when to retract it, then this could work, but it would still have to rest upon a notion of rightful collective ownership. At least so it seems to me.