Taxation is the Enemy of Liberty

Psyche! Taxation is not the enemy of liberty.

I like Ron Paul. He doesn’t bullshit and he tells you where he stands. But I find that the principled Libertarian stance against taxation and progressive taxation to be puzzling. There is always some vague explanation about markets and their efficiency but I always get the nagging sense that what Libertarians are really pissed about is giving a portion of their money to people whom they view as lazy or deficient in proper character. It’s unfair to take away money from hard working people and give it to the less deserving, they reason. That’s what they perceive taxation to be about so why not throw the baby out with the bathwater.

Ron Paul has said,

‎”A casual acceptance of the principle behind high taxation, with an income tax and an inheritance tax, is incompatible with a principled belief in a true republic. It is impossible to maintain a high tax system without the sacrifice of liberty and an undermining of property ownership. If kept in place, such a system will undermine prosperity, regardless of how well off we may presently be.”

Of course, this isn’t true and saying so doesn’t make it so.

Taxation, especially progressive, has it’s place in a civilized society. To quote Adam Smith, a favorite of the free marketeers:

“…the expense of defending the society, and that of supporting the dignity of the chief magistrate, are both laid out for the general benefit of the whole society. It is reasonable, therefore, that they should be defrayed by the general contribution of the whole society, all the different members contributing, as nearly as possible, in proportion to their respective abilities.”

Also,

“When the toll upon carriages of luxury, upon coaches, post-chaises, & etc. is made somewhat higher in proportion to their weight, than upon carriages of necessary use, such as carts, waggons, & etc. the indolence and vanity of the rich is made to contribute in a very easy manner to the relief of the poor, by rendering cheaper the transportation of heavy goods to all the different parts of the country.” (emphasis mine)

His justification is that public services including maintaining infrastructure and defense benefit the whole and therefore ought to be supported by the whole. But, (and I presume the real issue is not the libertarian stance on what ought to be the maximum function of government) he also understood that the poor are not necessarily so because of a fundamental character defect and the rich are not necessarily so because they are so diligent. Those who are diligent and rich become so by taking advantage of a vast and efficient (sometimes) infrastructure supported by taxpayer moneys. As my prominent comedian friend mentions, he doesn’t mind paying higher taxes because he uses more of the roads and phone lines and other public services, etc, than the average person to make his money. This is the case with most people who make lots and lots of money. They take advantage of existing infrastructure and technologies maintained largely through public funding to garner their wealth. Granted, this is not always the case, but there are forums to create public subsidies to aid corporations and businesses and individual entrepreneurs who are mostly funded by private investment (This doesn’t work perfectly, but again, baby and bathwater). A wage worker at McDonald’s doesn’t take advantage of public services to their fullest extent and his work is supported by private infrastructure which is why he makes a negotiated wage and McDonald’s takes a majority of the profit. Therefore, the wager’s taxes are low. McDonald’s in turn benefits from an exponentially large proportion of publicly maintained infrastructure for its daily operations and therefore pays more taxes. So, as it turns out progressive taxation is fair. But it has to be understood in the proper context. It is too easy to take for granted the infrastructure that makes our lives and livelihoods tenable and how they are maintained.

With this in mind, I do not take the principled stance that taxation is theft or an enemy to liberty. Freedom, as they say, isn’t free. In no case in the history of the world has liberty been a free commodity. We fight and die for it. Sometimes we pay for it.