An attempt to justify taxation

loftin:

Taxation should be attached to benefit derived, and the primary economic benefit we derive from a system such as our is property rights. 

This is an extremely long post and I won't read it all since your opening premise is in conflict. 

1. You cannot only count the benefit of taxation without also analyzing it's economic costs. In other words we have to decide if the benefits outweigh the costs.

When you understand the pricing system you will learn why taxation fundamentally alters market behavior and cannot be looked at as economically beneficial. 

2. It's non sequitur to assume that taxation creates or preserves property rights. 

3. The very enforcement of taxation is a violation of private property rights, so your conclusion seems to be in conflict with itself. How does it establish protection of private property if it must first violate it to do so?

Yes. I realize that it's quite long. I believe it's worth reading or I wouldn't have added it. Anyways, no one need feel obligated; and I will understand if many people choose not to read it. Regarding #1: I would definitely agree that both the costs and benefits of government (I guess that's what you meant in #1?) must be taken into account; indeed it is precisely such a line of reasoning that led to the suggestion of taxing wealth rather than income in the first place. There is absolutely (from what I can tell – what I've read) no principled explanation for using income (rather than some other quantity – e.g. the number of cats one owns) as the basis for assessing tax obligations. In other words, the questions I was contemplating (as you'll see from the post) are: (a) why do we pay taxes? and (b) in what way(s) do we benefit from the existence of government*? I obviously came to question (b) in consequence of my answer to question (a), which was: because government is a costly activity (i.e. expenditures are incurred as a result of government existence/operation), the results of which (at least in our case – and I think in the case of much of the “civilized” world) produce a public good in the form of property rights from which many of us derive economic benefit. I admittedly do, in the post, take for granted that government is a good thing (I mean that I do believe that some amount of order is generally better than the extreme alternative). Given the tenor of some of the comments I've read, no doubt some will take issue with this presumption. My comments would be geared more at those who don't find the existence of government somehow offensive [see * below]. In other words, my view of the purpose of life is friendly towards the establishment of institutions that have the purpose of facilitating the production of public goods, including a certain amount of order to our daily lives; with the important constraint that some semblance of human agency (an internally consistent notion of freedom) be preserved. In other words, I'm in favor of having government. Another way of putting this is that I believe (to answer your #1) that the benefits of government generally far outweigh the costs – especially when government has the basic form that ours has. (I like to think that I'm not naïve about its problems; but there's no question in my mind regarding its desirability compared to pretty much every other setup that currently exists on this planet.) Regarding your comment about “the pricing system”: I'm not exactly sure what you're referring to. I am a little bit familiar with some pricing concepts and, again, my comments in the post reflect (I believe) that I have taken this consideration into account. Indeed, given the assumption that we want access to the public goods that result from collective behavior (i.e. government), using wealth (rather than income) to finance general government expenditures is sensible precisely because it results from taking pricing frameworks seriously – much more seriously than the vast tax theory literature which ignores it altogether as a consequence of assuming that governments have (and will continue to always have) strict monopoly power. The line of reasoning seems to be that governments have monopoly power to tax, therefore taxes are entirely devoid of connection to any benefit we derive by the existence or operation of government. (Well, at least this assumption of complete monopoly power – extending into perpetuity - seems to me to be the tenet that is most responsible for the mistaken line of reasoning that has resulted in decades of focus on efficiency to the exclusion of all else in the tax theory literature.) If governments do and always will have claim to such monopoly power, then there is no sense in talking about pricing when it comes to government goods and services – because monopolies can set whatever prices they want to. If, on the other hand, improvements in telecommunications and transportation place information and the opportunity of choosing what country we can live in – a direction that seems to be the trend – then governments can no longer take such monopoly power for granted: they must in a sense compete for citizens in much the way that vendors compete for customers. Once one has reached the conclusion that this is the general direction in which things are going, it seems sensible to speak about pricing where government goods and services are concerned; and it leads to the second question that I mentioned above, i.e. question (b). I have reached the conclusion (others need not agree) that while we potentially benefit from government in many different ways, the most fundamental and pervasive economic benefit is that of property rights. The question then becomes, what kind of a tax policy (i.e. means of assessing financial obligations sufficient to meet the expenditure requirements of producing these public goods) makes the most sense? The conclusion I have reached is wealth taxation – e.g. a fixed percent of each individual's net wealth (I believe it would be quite low – Shakow has some preliminary numbers that I came across about a year ago). I've reached this conclusion because I have come to believe that the degree to which we individually benefit by the existence of the property rights guaranteed (implicitly - to whatever degree they exist) by our governments is proportional to our individual net wealths. The income tax as we know it and taxation of corporations would be done away with (corporate assets would be taxed according to their respective shares of ownership by individuals). This is a bare bones system in the sense that additional programs (should a nation choose democratically to have them) should be “priced” (i.e. costs assessed to individual citizens) in a similar manner: by identifying the degree to which we benefit and then dividing the costs accordingly. Response to #2: I have nowhere stated that I believe that taxation creates or preserves property rights. I also don't believe that the money you pay to the grocer for groceries actually creates milk or eggs – at least I haven't ever seen a five-dollar bill do that kind of thing, whereas I have seen cows produce milk and chickens produce eggs. And I guess that if the grocer stopped giving you milk and eggs when you gave him your money that you might not be very happy about continuing to make the exchange going into the future. You might find another grocer.... Response to #3 I have a model that predicts that wealthier people would have economic incentives to pay greater amounts for a guarantee of property rights once we have collectively agreed to finance this public good. All groups have rules of membership and as people are more and more free to move from one country to another (i.e. to choose the governments they will live under), I will not weep for the person who chooses to stay in a country and gets thrown into jail for not keeping the law that demands just payment (one that he should be willing to pay if the benefit were retractable, which it is not because it's a public good) for a benefit he implicitly receives (i.e. a benefit that cannot be turned down due to the public nature of its production). The notion of property does not appear to exist outside the framework of sociality or government: there's no right to anything when there's no government to establish that right is there? Well, I'm not an expert in this subject (my training is in stats and economics); but hopefully my comments will have been interesting to you all – if not convincing. Best regards, Loftin Graham

verbose

Text formatting FTW.

An ocean of text AAGGH!!

filc:

loftin:

Taxation should be attached to benefit derived, and the primary economic benefit we derive from a system such as our is property rights. 

This is an extremely long post and I won't read it all since your opening premise is in conflict.

1. You cannot only count the benefit of taxation without also analyzing it's economic costs. In other words we have to decide if the benefits outweigh the costs.

When you understand the pricing system you will learn why taxation fundamentally alters market behavior and cannot be looked at as economically beneficial.

2. It's non sequitur to assume that taxation creates or preserves property rights.

3. The very enforcement of taxation is a violation of private property rights, so your conclusion seems to be in conflict with itself. How does it establish protection of private property if it must first violate it to do so?

If property rights are not absolute, and taxation is required to provide defence and security, then taxation is not theft.

scineram:

If property rights are not absolute, and taxation is required to provide defence and security, then taxation is not theft.

I respectfully request you to explain to us how the property that I own and have worked to obtain is not absolutely mine.

If what you say is true why don't we just give all our wealth and labor to the nation? You go first.

taxation has not proven to be a succesfull defence against taxation. hence taxation is not required to provide defence and security.

filc:

scineram:

If property rights are not absolute, and taxation is required to provide defence and security, then taxation is not theft.

I respectfully request you to explain to us how the property that I own and have worked to obtain is not absolutely mine.

If what you say is true why don't we just give all our wealth and labor to the nation? You go first.

It was a conditional. If you want your property to be absolute, then make your case!

Yours was also a non sequitur.  It does not follows from having to pay some tax the obligation to give all.

nirgrahamUK:

taxation has not proven to be a succesfull defence against taxation. hence taxation is not required to provide defence and security.

 Government needs to prevent chaos and war of all against all. Its funding requires taxes.

scineram:

 Government needs to prevent chaos and war of all against all. Its funding requires taxes.

scineram:

 Government needs to prevent chaos and war of all against all. Its funding requires taxes.

1) Government is more likely to wage war because it can externalize its costs onto its citizens via taxes/inflation. In anarchy, where each individual must bear the cost of his own actions, the propensity for war is reduced because war becomes harder to fund.

Advocating government is a zero-sum-game anyway. Does having states ensure there were more justice between peoples? A priori, in a conflict between states, there is an equal chance that the aggressing state will win. So simply because states are better at waging war than anarchies isn't a point in your favor. After all, assault rifles are more deadly than hand guns, but no one thinks the world would be a better place if everyone upgraded.

^this is a new argument I am trying out. It's been nagging at me for a while. Generally when people say you need a government to wage war, they mean you need the US government which is a superpower good guy. But what about other countries? Would there be any point in having a government if your country would still lose to the united states? No. If groups A and B have a war and B wins because it has a state, is that just? Is that useful? Donno. Zero sum game on average... probably a negative sum game irl since the state that wins does so by becoming illiberal.

2) Government is more likely to fail in providing security to its citizens, because anything it does is politically motivated and you don't need 100% of civilian support!. This virtually guarantees that a state will neglect minority groups. This explains why police don't patrol black ghettos at night.

All the statists are really saying is that we need to pool our resources to pay for security, but we already associate ourselves in voluntary groups like Neighborhood Associations and apartment complexes. These groups are analogous to a state in every way except that they are voluntary. I feel safe at night because I live in a gated complex with 2 security guards on duty at night. The state doesn't help at all.

Speaking of which, did you know that there are more private security personnel than police? That more cases are settled in private courts than public? We are closer to anarchy than you think. The private sector is keeping this country out of chaos, not the government.

3) Even if you were right about there being a perfect plan for statehood, would it be worth it? Out of the hundreds of failed states (particularly in the libertarian view) it seems like a huge risk to take. What if your system of checks and balances fails and government grows out of control? How do you stop private interests from gaining control of the institution? Even if a state could work, it wouldn't be worth the risk.

bloomj31:

I recently had a civil dispute with my mother over my trust fund whereby it was decided that I was being stolen from and as a consequence, my mother's power as trustee was taken away and now she can't steal from me anymore.  Couldn't have been done without the courts and by extension, the police.

And you never stopped to consider the nature of the system we have now? Of course not. You never do. You're such a superficial thinker--if you ever do think, that is.

 

Knight_of_BAAWA:

And you never stopped to consider the nature of the system we have now? Of course not. You never do. You're such a superficial thinker--if you ever do think, that is.

The difference is that you say you (and I) say we get stolen from by the government but we really can't do anything about it, except through voting.  Which you don't do.  Whereas, through the legal system, I was able to do something about my predicament because there was a judge and executioner.

If you and I really wanted to overthrow the government, we would need a big army.

If you and I really want to change the government, we need a lot of votes.

scineram:

Yours was also a non sequitur.

I suppose but your response below 

scineram:

Government needs to prevent chaos and war of all against all. Its funding requires taxes.

Does not address the fact that taxation is theft. Whether you think it's needed or not is beyond the scope of the discussion. YOU have yet to prove to us that it is not a form of theft. Please do so at your leisure.

bloomj31:

If you and I really wanted to overthrow the government, we would need a big army.

Spidey has some good answers on this.

bloomj31:

If you and I really want to change the government, we need a lot of votes.

I highly recommend you read some public choice theorists when you get time. They will explain how voting and democracy is ultimately fruitless.

filc:

I highly recommend you read some public choice theorists when you get time. They will explain how voting and democracy is ultimately fruitless.

You mean fruitless for the losers?  Obama fans got what they wanted.

Or you mean fruitless for anarchists?

bloomj31:

You mean fruitless for the losers?  Obama fans got what they wanted.

hehe have you talked to any obamah fans lately? Most of them are not getting what they wanted.

Just like Bush fans didn't get that humble foreign policy they wanted either. 

bloomj31:

Or you mean fruitless for anarchists?

Bloom I really grow tire of you equivocating everything back to anarchy with me. I speak in pretty blunt terms. BY fruitless I mean fruitless. I mean less economical, I mean less output. It's an economic statement, not a philosophical or political one. Please stop doing that buddy it's very annoying.

Actually I did mean it in a political sense I guess, but I was not referring to anarchy in any sense. What I mean is democracy will never give people what they want. It's fundamentally flawed in that respect, it's mechanically broken.

filc:

Bloom I really grow tire of you equivocating everything back to anarchy with me.

You're being played.

I don't have the same faith in the market that you do, Fil.

I have faith in it, but it's not as strong.  I understand that you'll hit me with logic and strong arguments about why political systems must be less efficient than markets.  You'll certainly win this argument.

But you won't change my mind about democracy.

liberty student:

You're being played.

Your right. I'll digress until something of value actually gets posted.

filc:

liberty student:

You're being played.

Your right. I'll digress until something of value actually gets posted.

It won't happen.  Jacob has ban dodged numerous times, and he still contributes nothing to any discussion.  What he does do, is project a passive interest which posters misconstrue as an invitation to discuss matters of substance.  People think he can be won over.

You can no more have a reasonable discussion with Jacob Bloom than you could a cantaloupe.  The only difference is that Jacob will give you feedback so you keep posting.  Because that seems to be his agenda.  To occupy as many people in discussion, with no intent to reason or reach agreement, day after day after day.

What do we know about subsidy?  If you subsidize something, you get more of it.  It's time to stop subsidizing Jacob's self-contradicting posts, because we could certainly do with less of them.

liberty student:

It won't happen.

Point Taken LS. I have observed this as well, I just fear for people who end up in that state. I can't help I'm a bit compassionate.

filc:

Point Taken LS. I have observed this as well, I just fear for people who end up in that state.

You can't save people from themselves.  It's your kindness that these sorts of folks prey upon.

filc:

I can't help I'm a bit compassionate.

As am I.  But there are lots of honest people out there to be compassionate towards.  Isn't that Rothbard's rule, that we always specialize in what we are worst at?  It seems we're always drawn to discuss with the people who are the least likely to see our point of view, instead of discussing with those people who will give our premises a fair hearing.

It takes a certain sort of personality to behave like this in a group dynamic.  It's unhealthy for us and for them.  And the best way to deal with a problem, consistent with a voluntary society, is to make people figure it out for themselves.  Make them accountable, so that when they post contradicting material time after time, withdraw discussion until they can post material which is at least consistent with their stated position.

Jacob has had 3 or 4 accounts, hundreds of posts, and months to come to any one Austrian conclusion.  The lack of progress is a testament not to our failure to communicate, but his sincerity to reason.

JB is a perfect example of personal morals. He believes what he believes and that's it.

It's funny that advocates of 'subjective' morality would ban people who don't agree with them and talk about reason. What's the reason for Bloom's bans, except mere whim ?

Juan:

What's the reason for Bloom's bans, except mere whim ?

He hasn't been banned.

Oh, so he just forgot the passwords...

edit : regardless, he still is the perfect example of moral subjectivism.

Juan:

edit : regardless, he still is the perfect example of moral subjectivism

lol

Juan:

It's funny that advocates of 'subjective' morality would ban people who don't agree with them and talk about reason.

The facade of chivalry is no laughing matter young man.

liberty student:

Jacob has had 3 or 4 accounts, hundreds of posts, and months to come to any one Austrian conclusion.  The lack of progress is a testament not to our failure to communicate, but his sincerity to reason.

I just want to say that this is my second account.

flic,

where i used to work, you were the kind of person that got people hurt, sometimes seriously and I mean physically not only emotionally.  On top of that, was the kind of crutch criminals also look for in life thereby not actually letting them deal with their own faults.  In essence your being a hinderance helping those in need rather than be a helper, kinda like socialized healthcare.  it's about responsiblity and you're not letting others enjoy the pleasure of such.  just tryin' to be helpful.

There is no real way to justify taxes, since taxes are, by definition, theft. The only thing one can say is that this form of coercion is required to prevent a greater form of coercion (historically omnipresent). From this, you base your argument from past historical episodes, such as the riots/reign of terror during the middle part of the 19th century. The government needs to protect the rich from the angry jealous mob, from domestic criminals, and from hostile foreign enemies. The real question at hand is if one believes that the world can truly exist without any form of coercion. If one denies this proposition, which is only logical, then we must speak about reducing the level of coercion as much as possible, while accepting the fact that coercion will exist. So trying to justify taxation is impossible; you must concede the point and then move from there.

@ the OP

Obviously. the simplest argument to justify taxation is the Hobbesian argument. Namely, security is a public good that would be underproduced in a state of nature. It is necessary to establish a sovereign with the power to tax to provide an adequate level of security.

Stephen:

@ the OP

Obviously. the simplest argument to justify taxation is the Hobbesian argument. Namely, security is a public good that would be underproduced in a state of nature. It is necessary to establish a sovereign with the power to tax to provide an adequate level of security.

This begs the question that security is somehow a public good. A public good however is defined entirely arbitrary. What the right considers a public good is entirely different than what the left would consider a public good.  There is no clear definition of public goods. If we pretend for a minute that public goods are more economically dispursed than typical market goods we would have to concede that all goods would be better off as public goods and that a socialist utopia would be more ideal. 

On the flip side if we beleive that the market is the best solution at dispersing and delivering goods than we cannot arbitrarily exempt security from that.

Stephen:

Obviously. the simplest argument to justify taxation is the Hobbesian argument.

Oh I keep forgetting this. The argument you provided does not disprove the fact that taxation is still theft. The argument only attempts to justify the theft, get it?

filc:

Stephen:

Obviously. the simplest argument to justify taxation is the Hobbesian argument.

Oh I keep forgetting this. The argument you provided does not disprove the fact that taxation is still theft. The argument only attempts to justify the theft, get it?

No, if taxation is justified, thenit is not theft.

But since it is not justified it is theft. So, you are not only clueless about inflation, you are also a 'minimal'(or worse) statist ?

scineram:

filc:

Stephen:

Obviously. the simplest argument to justify taxation is the Hobbesian argument.

Oh I keep forgetting this. The argument you provided does not disprove the fact that taxation is still theft. The argument only attempts to justify the theft, get it?

No, if taxation is justified, thenit is not theft.

This doesn't even make sense.

Circular reasoning anyone?

I recommend this thread. And this.

bloomj31:

I would never pay any of my debts if I weren't going to be forced to.  I'd have no reason to.  Why pay for anything if you don't have to?

Well doing that you'd earn a poor reputation pretty easily- a lot less people would want to have any type of relationship with someone who can't be trusted to keep their word. So if being alienated is the goal- then that's one way to get there.