In a class I am taking, a fellow student asked a question about taxation. Here is a glimpse at that conversation, followed by some thoughts by people who have wise or insightful point to add. In the end, my view will culminate in: No one likes paying taxes, but it’s essential. Unless you’re a saint or a true Christian, routing our collective funds through a good and responsive government — comprised of citizens — is the best way to affect social betterment. It’s in the spirit of this, by mega-capitalist, Warren Buffett: “I was lucky enough to be born into a time and place where society values my talent, and gave me a good education to develop that talent, and set up the laws and the financial system to let me do what I love doing—and make a lot of money doing it. The least I can do is help pay for all that.”
It’s in the spirit of this mega-capitalist Warren Buffett said: “I was lucky enough to be born into a time and place where society values my talent, and gave me a good education to develop that talent, and set up the laws and the financial system to let me do what I love doing—and make a lot of money doing it. The least I can do is help pay for all that.”
The classmate said: “I know some people say that taxation is unfair to the rich; however, I think that a social institution such as taxation should not be considered mercenary or onerous. Tax is an expression of good, and it should be managed by philosophy promoting and fomenting good in society. Thus, I really can not agree with the idea of Robert Nozick`s that taxation is forced labor.” She is referring to philosopher Robert Nozick’s (1974) book Anarchy, State, and Utopia in which he posits his entitlement theory.
Nozick notoriously refers to taxation as akin to forced labor – as in, slavery. He envisions that if a person works for 40 hours a week and they pay 25% in taxes, then is it not like 25% of his hours are simply usurped? Imagine if someone was allowed to work for 40 hours and pay no tax, but then had to work an additional ten hours a week for no pay and that was considered the taxation. That last ten would really smart. He sides with philosopher John Locke: if we own ourselves, and if we own the fruits of our labor, then having a government take some is theft. Another of Nozick’s libertarian notions is that if the way one gets money is perfectly legal and is between consenting adults — who don’t take advantage of each other — then what right does the state have to intervene? His ideal society is a very minimal one – roads and defense and trade provisions and such. Everyone else is left to sink or swim. It’s pretty austere.
In response to my classmate calling taxation good, I suppose it could be considered good in the way that shopping for groceries, and paying, is not bad; it’s not fun, but it’s got to be done. I think with libertarians, the issue feels to them like they are shopping, and then at the checkout, the clerk says “Your total before redistribution is $134.00 and after redistribution it is $159.00.” They think, Wait, I am buying groceries for someone else who can’t afford them or doesn’t really want to work for them? Libertarians really don’t quibble about roads; they see some government as foolish, incompetent, unnecessary, and then when it comes to redistribution of wealth for social needs, they take umbrage at the forced contribution. They would prefer to voluntarily donate to charity.
Add in the sentiment held by the bourgeoisie, such as Mitt Romney, that “the 47%” don’t do anything productive and merely take, and you got yourself a pretty serious situation, one that is bound to cause a lot of anger and finger-pointing on both sides of the political spectrum. “The state has no more right to force affluent taxpayers to support social programs for the poor than a benevolent thief has the right to steal money from a rich person and give it to the homeless” is how philosopher Michael J. Sandel characterizes this position.
Before I share my main points, here is an article to consider regarding the alleged fiscal discipline of the Congressional Republicans – and the emperor with no clothes, Donald Trump.
My two thoughts about that are: that’s not very nice to try to create a starkly minimalist society, is it? Not Christian, is it? They know darned well that in a country with 340,000,000 people, many seniors, children, physically ill, mentally ill, physically incapacitated, undereducated, undertrained, unlucky, and foolish people are going to suffer quite a bit. You can’t eat roads, and you can’t shelter under a F-22 fighter jet.
Secondly, libertarians would put the foxes to guard the henhouse, because as we know, when corporations get a crack at law and bribing politicians and having capitalism run amok, they seize it. As comedian Craig Kilborn puts it: “While no one likes paying taxes, we should all remember what our taxes pay for: blowing people up.”
Secondly, libertarians in the mold of Nozick would put the foxes to guard the henhouse, because as we know, when corporations get a crack at law and bribing politicians and having capitalism run amok, they seize it. It’s not like we live in some kind of utopia where persons all have crafts and ways to make a living, and to be left alone is fine because there aren’t these bad actors who would stay up at night planning how to grow plutocracy, oligarchy, and corporatocracy. When a vacuum is created by citizens not creating a robust and functional government, it becomes ripe for corporations and their lobbyists to bribe politicians to enact laws and generally create an atmosphere sympathetic to their love of money. “This ‘too big to fail’ means, for the largest segment of the financial services segment of our economy, it’s not a capitalist system, it’s a system that is backed up and supported by the American taxpayer as guarantor.” ~ Elizabeth Warren
European social democracies are much more functional and have responsive and useful governments than we do in America. The fact that they spurn a libertarian approach to governing is no coincidence. The citizens put up with taxation between 30-40% and enjoy the many benefits. Did you know that Denmark is the happiest country, and Iceland was the only country to really prosecute financial sector raiders who brought the economy down in 2008? What did we do in comparison (in addition to virtually creating the crisis)? We socialized the losses and bailed banks and other industries out. Thus, under the kind of crony capitalism present in the United States, the big industries privatize gains and socialize losses. It’s a win-win. It bothers libertarians just as it does egalitarian liberals, but the difference is that it is libertarianism that allows this kind of cancer to spread.
Here is a handy comparison of Nozick and his friendly nemesis, the welfare state theorist, John Rawls. Philosopher Michael Sandel says this about them: “Libertarian liberals, like Robert Nozick and Friedrich Hayek, argue that government should respect basic civil and political liberties, and also the right to the fruits of our labor as conferred by the market economy; redistributive policies that tax the rich to help the poor thus violate our rights. Egalitarian liberals like Rawls disagree.”
I recorded an interesting podcast with two great guests on economics and progressivism here.
And now, some quotations relevant to taxation and my two retorts to libertarians. I welcome you to look up your own quotes about taxation and other aspects of capitalism, politics, government, the welfare state, and libertarianism in The Wisdom Archive.
“Each person possesses an inviolability founded on justice that even the welfare of society as a whole cannot override. For this reason, justice denies that the loss of freedom for some is made right by a greater good shared by others. It does not allow that the sacrifices imposed on a few are outweighed by the larger sum of advantages enjoyed by many.” ~ John Rawls
“Equity refers to how much we get from our work. And the norm is that we should be remunerated for effort and sacrifice, not for property or power. Solidarity is the notion that people should be concerned about one another and benefit in concert with one another rather than be mutually opposed and trampling upon one another. More solidarity is better than less. Diversity is about the range of options we have. A wider range of options is better than homogenizing and reducing the range of options at our disposal. And self-management has to do with how much control we have over our lives. Self-management means that we have a say in the decisions that affect us in proportion to the degree that we are affected by them. So for me, developing an economic vision means trying to figure out institutions to accomplish production, consumption, and allocation in ways that enlarge equity, solidarity, diversity, and self-management rather than diminishing them. The institutions I come up with are workers’ and consumers’ councils, balanced job complexes, remuneration for effort and sacrifice, and ‘participatory planning’.” ~ Michael Albert
“Taxation is not a technical matter. It is preeminently a political and philosophical issue, perhaps the most important of all political issues.” ~ Thomas Piketty
“The greatest problem facing our country is the breaking down into two classes — those who have and those who have not…. We cannot remain a democratic, open society that is divided into two classes. In the long run, that’s the greatest single danger. And the only way I see to resolve that problem is to improve the quality of education.” ~ Milton Friedman
“The conservative order – inspired two generations ago by Milton Friedman and Friedrich von Hayek and brought to power by Republican ascendancy – pushed government aside so business and capital will be free to generate more lasting prosperity. But their utopian promise was not fulfilled. Instead, the right’s principal product, one can say, was economic inequality.” ~ William Greider
“How is it that wealthy insiders have been able to hijack America’s financial system and tax system for their own gain at the expense of everyone else? Much of the answer lies in the outsized political clout that economic winners have in our society today.” ~ David Callahan
“This view that Washington is the enemy – and that every tax dollar paid there is a tax dollar wasted – is grotesque.” ~ Thomas L. Friedman
“Life is not fair. It is tempting to believe that government can rectify what nature has spawned.” ~ Milton Friedman
“Libertarianism arose in opposition to royal absolutism, to kings who sought to govern without constraint. Court intellectuals, of course, had developed elaborate theories to justify monarchy, aristocracy, and imposed order. It would hardly be fair to suggest that “conservatives” were defenders of this absolutism, but in time, a form of conservatism has emerged that defended the existing privileges of the king, the aristocracy, the established church, and the monopolies.” ~ David Boaz
“For Americans who have made every effort to succeed, only to be pulled down over and over again by a market economy and a society weighed against them, the American dream can feel like a hoax, a myth without substance.” ~ Jeremy Rifkin
“I want workers and consumers to have control over their own economic lives. I want everyone to have fair conditions that fully utilize their talents and potentials. I want incomes that accord with the efforts people expend in their labors. I want what is produced, by whom, under what conditions, and with who consuming the result – all determined in accord with enhancing human well-being and development and all decided by the people involved and affected. I want an end to hierarchies of power and wealth and to class division with most actors subordinated to an elite few. To accomplish all these ends I favor the institutions of participatory economics – worker and consumer councils, remuneration for effort and sacrifice, balanced job complexes, and participatory planning. If someone should demonstrate that those institutions somehow fail to accomplish necessary economic functions or have social or personal by-products that outweigh their benefits – I would simply return to the drawing board. Exploitation, alienation, poverty, disempowerment, fragmenting and debilitating labor, production for the profit of a few – much less harsh homelessness, starvation, and degradation – are not like gravity. They arise from institutional relations established by human beings. New institutions, also established by human beings, can generate other vastly superior outcomes. Defining and working to attain those new institutions ought to be our economic agenda.” ~ Michael Albert
“Injustice is simply inequalities that are not to the benefit of all.” ~ John Rawls
“A capitalist market economy is not, of course, an equal society. But it is a powerful agent for disrupting existing class barriers and official hierarchies.” ~ Samuel Brittan
“The crash on Wall Street should be for [Milton] Friedmanism what the fall of the Berlin Wall was for authoritarian Communism – an indictment of an ideology.” ~ Naomi Klein
“Prune the shade tree of big government, they insist, and families, neighborhoods and church-based charities will flourish in the sun and space now crowded out I the overgrown tree. …They are wrong to ignore the most potent force of all — the corrosive power of an unfettered market economy.” ~ Michael J. Sandel
“While race certainly has its role, American poverty is most firmly rooted in a class system—a system maintained by an economy that allocates the wealth of society to those who already have the most. One of the ways that wealth is created is to ensure that unskilled workers are not paid a living wage.” ~ Joel Bleifuss
“There is all the difference in the world between treating people equally and attempting to make them equal.” ~ Friedrich von Hayek
“The egalitarian pioneer ideal has faded into oblivion, and the New World may be on the verge of becoming the Old Europe of the twenty-first century’s globalized economy.” ~ Thomas Piketty
“America has already become perhaps the harshest and most unforgiving society among the industrial democracies, and life is about to get even harder for the unlucky as the [Bush] administration reckons to shift the burden of taxation even further away from the wealthy and toward wage earners.”~ Bill Moyers
“Obviously, we’ve got to make improvements in our economic system or we’ll continue to face heavy moral consequences. That is, if you agree that the nature of the system is immoral – and if you don’t agree with me, how do you describe a child dying because they didn’t receive proper medical care, in this country, in this day and age!? It’s priorities. And priorities reflect moral decision-making. Or shall I say, immoral.” ~ John A. Marshall
“The nation has just experienced a generation of stagnation and swelling inequality, with millions losing personal status, but also their hopeful sense of the future. What does the political system propose in response? More tax breaks and tax forgiveness for the rich and powerful, for the ambitious managers and investors. More disappointment and inequality for citizens down below. And more looting of government.” ~ William Greider
“A new Pew survey finds that Americans consider the greatest threat to our country to be the growing gap between the rich and poor. Yet we have constructed an education system, dependent on local property-based taxation, which provides great schools for the rich kids in the suburbs who need the least help, and broken, dangerous schools for inner-city children who desperately need a helping hand. Too often, America’s education system amplifies not opportunity but inequality.” ~ Nicholas Kristof
“America’s economic problems go far beyond rich bankers, too-big-to-fail financial institutions, hedge-fund billionaires, offshore tax avoidance or any particular outrage of the moment. In fact, each of these is symptomatic of a more nefarious condition that threatens, in equal measure, the very well-off and the very poor, the red and the blue. The U.S. system of market capitalism itself is broken.” ~ Rana Foroohar
“While the right sees those who don’t pay income taxes as lucky beneficiaries of government subsidies for education and child care, the people who don’t owe federal income tax are people who basically can’t afford that tax. They also can’t afford to pay their rent, clothe their children, or eat three squares a day.” ~ Alan Colmes