Is taxation theft?
Sep 3, 2011
7 minute read

Will Wilkinson has an article in The New Republic that’s ostensibly about what’s wrong with Ron Paul. But I don’t think that’s what it’s really about. Call me a Straussian if you must; what Will really wanted to write about, on my reading, is why taxation is not theft. He got such an article into TNR by cleverly wrapping it in a timely political article about a specific politician. So, since I am an unpaid blogger and have no editor to please, let’s talk about it openly. Is taxation theft?

Property rights are not absolute

Most libertarians who make the taxation-is-theft argument consider themselves property-rights absolutists. Property rights, however, are not and could not plausibly be absolute. Suppose I own a parcel of land. What would an absolute property right to that land entail? Would I have a right to prevent people from sending stray photons onto my property as they drove by at night? How about from flying across my property on a hoverboard or sailing over it in a hot air balloon? Is there some “correct” height to which my “absolute” property right extends? Infinitely high? How long is the outline of my property? Have you read Mandelbrot?

What property rights _are_ in a positive sense are Schelling points. They are bundles of rights that people expect each other to defend. The content of the rights—the particular sticks in the bundle—depend in a very real way on economic efficiency. It would not be efficient for me to have the right to exclude stray photons from my property. Lo and behold, I do not and cannot assert that right. This limitation on property rights has nothing to do with state intervention. It is not as if, in the state of nature, we asserted property rights that included excluding stray photons, and now the law says stray photons must be allowed, so we allow them. Property rights existed before anything like the modern state existed, and they were never absolute. Nor should they be.

Property rights enforcement is coercive

Will writes,

But, of course, a system of property is itself a system of coercion. If I cannot waltz into your home, raid your fridge, and make myself a hoagie, it is because you might shoot at me or call the cops to drag me off at gunpoint. If you’re like me, you think the enforcement of property rights through the use of violence, or the treat [sic] thereof, is justified. But it does need to be justified.

Now, I dabble in pacifism from time to time—sometimes I wonder if enforcement of property rights is really justified—but I’ve never been able to…err…pull the trigger. There is no doubt in my mind that property rights enforcement is coercive and that ought to be justified. Will offers about as good a justification as I’ve heard, that property rights are an ingredient to a more important end of peaceful cooperation and flourishing.

Centralized coercion v. decentralized coercion

Given that we have a system of property, is it better for the source of the enforcement to be centralized or decentralized? To me, this is a no-brainer with a big if. _If_ decentralized enforcement is stable, then it is clearly preferable. The reason is that centralized coercion results in expansions and abuses of power. It’s not like there’s a choice on the menu of “centralized property rights enforcement with zero abuse of power.” You have to take the bad with the good. My preference, conditional on stability, is decentralized coercion.

Is decentralized enforcement stable? This is an active line of research for me, and my best answer so far is “sometimes.” There are a lot of people in armchairs who argue that of course decentralized enforcement is unstable. I find them rather unimaginative and non-rigorous.

Philosophical anarchism

A couple days ago, reading something else that Will wrote made me wonder if Will affirms philosophical anarchism. I asked, and he was noncommittal. I think it is an important issue. Not only do I believe that philosophical anarchism is true, I think that when you remember to push the philosophical anarchism button before thinking about politics it raises your IQ by a standard deviation or more. We all need all the help we can get.

Will writes:

And there are other legitimate public goods beyond the police protection of property rights. The need to finance the provision of these goods can justifiably limit our property rights, just as a system of property can justifiably limit our right to free movement. The use of official coercion to collect necessary taxes is no more or less problematic than the use of official coercion to enforce claims to legitimate property.

Since I have primed you to think in terms of philosophical anarchism, you should be asking the same question that I am: what makes some coercion official? Is it because the coercion is used to provide public goods? If that is the case, then I am justified if I take money from Will and spend it on public goods. Anyone is. When I reflect that a number of institutions—including street gangs—supply public goods, it makes me skeptical that this alone constitutes a good grounds for taxation.

Furthermore, public goods constitute a vanishingly small fraction of government spending. Will risks painting himself into the following corner: the 10 percent (generously) of taxation that is used to finance public goods is not theft, and the remaining 90 percent is. When you consider, for instance, that a substantial portion of US revenue is spent killing innocent people living in the wrong countries, you start to wonder if taxation is really about public goods or if it is about power.

The real problem with taxation

I’ve ceded a number of Will’s points already: that property rights are not absolute, that property rights enforcement is coercive, and that coercion is sometimes justified. Nevertheless, on a moral level, taxation continues to make me very uncomfortable. Let me try to sketch out precisely why.

Let’s call an action justified if, all things considered, it is the best action to have taken. Let’s call an action satisfying if we can go further and say that we are glad that it happened. It should be obvious that an action can be justified but not satisfying.

Take statements of the form: I wanted person X to do action Y, so I made X do Y. Y can be a number of things: give me candy, have an abortion, not have an abortion, eat vegetables, stop picking on the other kids, not trespass on my property, stop gunning down innocent victims, pay for Timmy’s leukemia treatment.

The action of _making_ X do Y is sometimes justified (depending on what Y is and the circumstances and, sometimes, on who X is), but it should never be satisfying. If an intruder came into my house and threatened my family, I might (might!) be justified in shooting and killing the intruder. But if I were satisfied that I got to justifiably shoot and kill someone, it would represent serious moral deficiency.

I feel that way about all coercion; it should never be satisfying, even when it is justified. Yet when I observe real-world taxation, I see a lot of satisfaction. People seem glad, for instance, that taxation is progressive. It’s not just a resigned, “Well, this is the most justified level of progressivity.” People are satisfied that those who they want to pay taxes are doing it.

To be clear, I am not accusing Will of being glad when other pay taxes. Nevertheless, I find the whole politics-taxation nexus so deeply morally corrosive. It trains people to think not only that might makes right, but that coercive outcomes are outcomes to celebrate. They’re not.