I was asked yesterday whether I ‘subscribed to the view’ that taxation was theft. I indicated at the time using a few more words that ‘it depends’. The question was prompted by an observation I made that there were three methods of aquiring something not your own; the receipt of a gift, the exchange for something of yours, and theft. So starting from that basis, let me rearrange the question a bit so it can be answered.
Rather than the inherent ‘Is taxation theft?’, lets consider ‘At what point does taxation become theft?’. Or similarly, ‘At what point does taxation become slavery?’
First lets take the extreme case for a simply show that it can be. All capital is charged 100% taxation, all income is charged at 100% taxation. The first is theft – where everything you own is taken from you by force. The second is slavery – where your labour is not your own, even if your needs are provided for to a greater or lesser extent.
So already a couple of observations; it is possible for taxation to be theft; dependant on the target of taxation, slavery may be a better description. I’ll leave aside the issue of description for now however, and stick with the original term of theft.
At what point does taxation start to become theft? Obviously part of our tax goes towards things that we value; a secure environment, government services, education, health, and so forth. So there is a sense that there is an exchange for value going on. There is also, for many of us, a contribution above this that we are happy to make because it helps support those less well off than we are, or those who are momentarily so; a part of our taxation is a gift. So if we add up the benefit we receive from community, and the gift we are willing to give to the community, we reach a figure that represents the most we, individually, can be taxed morally. Any taxation beyond the sum of our benefit and our willing gift is theft.
If we take what we know about land value – that it represents the value we receive from natural resource and the community – then we can come reasonably quickly to a personal calculation of whether we are being stolen from. Take the current value of the land (just the land, not house) you own and multiply it by the relevant loan rate. That gives a rough and ready approximation of the annual benefit the community is providing you. Add to this the amount you are willing to gift the community through the government. Anything over that is theft. Anything less than that suggests you may not be covering your share, or giving the gift you are willing to. Ok, so its a rough and ready calculation, and there are probably lots of things you could add or take away from these. Mostly it provides a ballpark figure to consider.
But it also illustrates that this notion of theft is extremely personal. The amount you are willing to give the community through the government is going to vary wildly from person to person; from zero on up. That however, is a choice for you to make, and beyond that point, at each individuals discretion, taxation is theft.