Tag Archives: Income tax

Taxes are voluntary…according to libertarian logic

Punch cartoon (1907); illustrates the unpopula...

A frequent and much beloved (Right)-Libertarian talking point is on how taxes are not voluntary and that they are claimed by the state at the end of a gun barrel. “Taxes are theft”, “Taxes are violence” blah blah blah. We’ve all heard the spiel I’m sure. But I doubt how many have realized that such an argument is not really consistent with the logic libertarians1 apply in regards to voluntary contracts and choice.

You see, a common aspect of most strains of libertarianism is that any choice made voluntarily – by which they mean, in the absence of active coercion – is morally acceptable for both parties. Thus a person choosing to work for a wage, has made a conscious decision to get in this position, because it increases his marginal utility. In the same vein, a person choosing to work in a sweatshop have made a decision which makes their life better off than before, so the sweatshop practice itself is obviously moral. A female being sexually harassed by her boss, but nevertheless staying in the job, is a voluntary choice which naturally means that the sexual attention she’s receiving does not constitute “harassment”. Naturally it follows that if people do not want to end up in this situations, they always have the choice of not taking those particular jobs.

So, in this context, aren’t taxes voluntary just as well? Consider that when you sign up for a job, you agree to a contract that states that a part of your wage will go to the state. You are volunteering to a contract that stipulates taxes. If you do not like the contract, you always have the choice of not working at all. This is a valid choice, as much as it is for the sweatshop worker, is it not? You weight your options and choose the one more beneficial to you.

Most likely libertarians will mention at this point that even those opening their own business have to pay taxes, even though they have no contract with the state. But that would also be false. They do have such a contract with the state. The contract that leases the land they live on, for it is in the very end, the property of the state. You can’t own any land, unless somewhere in the history of that land, there is a contract between state and the first owner. And that contract, had stipulations for taxes. The taxes of the business owner thus become analogous to the rent of a land owner, and much like the contract with a land owner can have stipulations that you can accept or deny, so does the contract with the state. In this case being that you have to give an amount of your income to the state in the form of income tax, and all contracts with your employees must stipulate income tax as well. If you choose to enter this voluntary contract, then naturally you must think it acceptable. Surely if the land owner was simply a private person, requiring rent from you and everyone you employ, you would have the same amount of choice, no?

It is the case then, that if you don’t like the terms of such contracts, you are of course free not to work at all. Nobody is forcing you to make such a choice. But if you do make it, then it’s under our own volition, is it not?

I can foresee at this point the enraged flames that will start bursting my way. Most likely I will be informed that the choice is an illusion, since the state has artificially and violently limited the options to either paying income tax, or not making money at all. And I will admit, this is a very compelling argument indeed.

Which is why I will have to pull the “switch” to my “bait” now.

You see, the argument that will be made to point out that the choice between “work with taxation or no work” is an artificial one, is the same one I will use myself to point that “work for a boss or don’t work” is an artificial choice just as well. You want the option to  live in a society where nobody has to pay taxes, I want the option to work in a society where nobody has to work for a boss.

Libertarians might claim that everyone would have this option in a society with no taxes, but if some landowners already hoard all the available land, then that is simply not true, for no landowner would be foolish enough to sell it rather than rent it. It would be as likely as the state truly selling land (rather than renting it via taxes) and allowing anyone to secede. In fact, that is the truth of the matter: The state, at the moment, is acting just like a capitalist landowner renting you some land with stipulations. The “rent” you pay, is your taxes. Imagine for a moment that instead of states, you had private landowners who asked for rent instead of tax. Would you, as a libertarian, have an issue with this?

Perhaps the smart libertarian will claim that the state came into ownership of this land through violence, and therefore any ownership claims over it are invalid. This is undeniably true: The state did enclose all the land through brutal violence. But what is to be done? The libertarian of a Rothbardian persuasion would undoubtedly claim that the best option would be to simply remove the state as the player, and let the ownership titles stand as they are, or possibly owned by their current workers in a shareholder format.  But I would object to that, for this is not a natural distribution of ownership either, rather, it is artificially created by the previous violence of the state and its continued legacy of its collusion with the plutocracy throughout history. If one were to simply declare that the current ownership claims should be treated as “homesteading”, then why not do the same jump and claim that the current state ownership should just as well be treated as “homesteading”? Both these scenarios would ignore violent history anyway, so why not stick to the status quo? After all, I’m confident that very few libertarians would have an issue with the current arrangement if they were paying “rent” instead of “taxes” and they were living under the rule of a private landowner with extensive management staff, rather than a democratic state with extensive bureaucracy.

Or perhaps not. But then, I’d like to hear what the significant difference would be (except the lack of democracy that is).

The truth is that there’s isn’t a functional difference between a state and a landowner. Both simply ask for rent to allow you to live within their ownership claims (borders). The former simply also provides the illusion that you have a say in the policies that affect everyone under these border, as a way to pacify you. And this lack of difference remains whether you have 204 uber-landowners or 2.000.000. The size of their borders might decrease, but the effect of their rule would not.

As such, the original problem would remain. Perhaps the libertarians won’t mind, as long as they have 2.000.000 choices of contracts, rather than 204 but then again, that would mean the problem was in the number of states in existence, not in their taxation.

The lack of choice would still remain. We would still not have the option to live and work without rent and without bosses and landlords. For anarchists like me of course, that is still the biggest problem, but for libertarians it shouldn’t be; after all, bosses and landlords aren’t an issue for them…

Thus in the end, it would be simply hypocritical for a libertarian to claim that the state rent (i.e. tax) is immoral while the rent demanded from a landlord or boss isn’t.  Both are based on passive coercion, rather than active. “Work for a boss, or starve” is not much of a choice, anymore than “Pay your taxes or go to jail” is. Both rely on the same exact set of circumstances: The artificial limitation of choices through the past exercise of violence.

Something which we communists like to call Primitive Accumulation…

PS: This post was inspired when I watched the “income tax bait and switch” in action, in this reddit comment thread. Props to watwatwatwatt for thinking of it.

  1. I’ll avoid using (right) for brevity. Let’s just assume it’s implied whenever I say “libertarian” in this post. []

How to save the economy the Austrian way

(The Depression) The Single Men's Unemployed A...
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Everytime a Mises.org article happens to fall into my field of vision, I am usually either stunned by the idiocy displayed or I simply burst our laughing at the absurdity and this latest one which even claims to be watered down in order not to be considered “unserious” by the current US Administration, is no break from this rule.

So after the introduction which attempts to claim the high ground of consistency and morality, we get an attempt at an analogy, which of course is made to showcase the Austrians as the rational good guys

If an allergic man has been stung by a bee, I don’t know what to do except rush him to the hospital and maybe scour the cupboards looking for Benadryl. But I’m pretty sure drawing blood from his leg, in order to inject it into his arm and thus “stimulate his immune system,” is a bad idea on numerous accounts

Unfortunately this analogy can easily be turned around to put the Government in the place of the hospital and whoever you don’t like in the place of the crazy ad-hoc injection doctor. If anything, one would see how this analogy would be to the detriment of the Austrians, as one could imagine that their reaction in this case would not be to do fucking nothing. After all, you shouldn’t be helping someone who took such risks and his death would imrpove the gene pool.

But hey, as long as the author is so proud of his metaphors, who am I to complain. Moving right along to his actual (*shudder*) recommendations.

After the mandatory fault blaming on the Gov’ment and declaration of his undying faith that were the state to go away everything would turn into pink bunnies and unicorns by the magic of the free markets, we get to the “serious” proposals:

Eliminate the personal and corporate income tax

And just to show everyone that he’s not joking around, he complements this with his very modest proposal to “blow up the IRS building”. ‘Cause that’s how he rolls, dawg!

Aside from the silliness of blowing up buildings, he doesn’t really explain to us why that is a good idea. I suppose that we need to take him as his word that it’s all in our best interests and it will not simply lead to public resources being wasted since there would be no money to repair them. No, the free market would find a way.

Also look forward however to the rise of epidemics of easily preventable diseases through vaccination. But hey, as long as the rich are protected, let the rabble die. It would certainly thin out the labour supply and increase their minimum wage (more on that below) so it’s all good eh ?

Unfortunately, dismantling the Social Security system will have to wait

Not that would do much good without any funding behind it. We’re going to go back to the good ol’ days where being poor means staying poor and you’ll be lacking any means to get back on your feet. Look forward to no security at an old age, no matter how hard you’ve worked the rest of your life. All wonderful stuff that people were struggling to fix a century ago but nowadays, they have become obsolete for the Austrians through the free market.

The author continues

The loss of some $1.5 trillion in annual tax receipts sounds absurd, but the actual figure would be lower, because of “supply-side” effects.

What could be better than supply side economics. This wonderful myth that has proven to not work anywhere but is still touted around on faith. But yeah, apparently removing tax incomes would provide a “stimulus to the economy”, as with the money injection to the banks I guess. Ah faith. What a wonderful thing.

Auction off all government assets progressively

Because we all know that private owners always do things better for the public than the government. Just look at Enron and General Motors. And privatizing things like water has always turned out for the best right?

At this point, I am starting to get quite annoyed at the author simply proposing random “free market” moves (Very similar to the ones the US has been taking for the last 30 years) and asserting that it will be for the best, at which point you think that we are supposed to trust him or be already convinced of the Austrian theory’s validity.

Eliminate the DEA and the SEC.

The author cites as an example Madoff who was not caught by the regulations and thus this proves that they are worthless. Nevermind that their powers to regulate Wall Street have been frowned upon, reduced and/or taken away by the US neoliberal politics. Basically the author is saying “The Agencies that we had to prevent this kind of thing failed after we limited their ability to do so, so the best thing to do now is to remove them altogether.”

Of course the continued existense of Madoff and the rest of the Wall Street implosion pretty much proves that the self-regulation of the markets is nothing more than a fairy tale. Expect the Madoffs to multiply in the future once there is not fear of being caught at all.

It is especially funny to see his proposal about drugs. Although I am one of those who would say to dismiss the war on drugs because it is counter-productive, restricts freedoms and it’s main purpose is to simply increase the prison slave labour, the author’s argument is that simply a stern talk and a watching of Requiem for a Dream will make people “just say no”, and even if they don’t, well, who cares.

Cut the Pentagon budget in half.

Finally, one of the few things that I think he’s not going far enough. Of course the military/imperialist budget is not necessary but not because it’s more than enough to protect US Americans from “Iranian Tanks” as the author uses as an argument, but because the reason for the budget is simply to enrich the war lobby. Which incidentally is privately owned, so where’s this trickle down effect I’ve been hearing so much of? His arguments once again display the authors half-assed understanding of how the world works.

Eliminate the Department of Education

Oh just brilliant. Because what we need right now is more unskilled workers. We can never have enough MacDonald servers afterall and having so many of them will certainly help keep the wages high..oh wait. No it won’t. If there’s one thing that will happen through the destruction of education opportunities is another descent into mysticism and religion and the destruction of the high level job market.

The authors argument is that not everyone deserves a higher education (only the born rich I guess) and hey, we’re saving money in the short term aren’t we? When has the short term been a worse investment than the long term?

Cancel all the pending “stimulus” and other bailout packages

Although I agree that the current “solution” implemented is wrong, the author presents this act for all the wrong reasons. He simply wants to “wipe the state clean” and let everything rebuild. He does nothing more than take the stand the liberals had as the Great Depression struck and they refused to save the banks. That of course turned out just dandy in the long term and only the banks suffered, right?

Of course the authors greatest failing is that he simply considers the bank itself, not the people who have their money saved in it. The folding of the major banks would mean that millions would lose all their life’s savings, loans would grind to a halt (even moreso than now) and a long period of rebuilding would happen while the economy reconstructed. Untold suffering for millions is what the author’s proposal is promising but as long as we stick to free market principles, I guess it’s worth it.

Allow unrestricted immigration

Hey, one thing I agree with. Oh wait, it was too good to be true…

So long as the incoming folks had a secure job in which the employer (a) paid three years in advance on any state and local taxes that would accrue from the employment and (b) bought at least a $100,000 house for the immigrant and his or her family.

Aaaahahahaha. Right. So basically the point is moot from the get go, as such wealthy or prestigious immigrants are probably allowed in now anyway. But hey, as long as it helps to “sell the package somehow”…

Abolish the minimum wage.

Wait, you need to read the whole quote

That — coupled with the elimination of the income tax — will take care of unemployment within 6 months.

If your goal is simply to “take care of unemployment” then this might be true but if you goal is to have people employed with a wage they can live a decent life instead of 3rd world situations, then you’re probably going to fail. Sure, you’ll get more employment but it’s going to be the employment of a bare subsistence wage, if that at all.

And with that the author finishes his proposal. Of course all of this is generally the kind of delusion the Austrians promote, that somehow anything can change by pleading with the Government to implement their “moderate proposals” which are generally watered down versions of their positions. Centuries of the same thing have proven more than enough already that nothing changes through such requests, especially not when the State is there to protect and support those at the top.

Watered down Socialism becomes Social Democracy and watered down Austrianism becomes Neoliberalism. Both in the end don’t achieve what they set out to do but rather betray their principles in order to retain their positions. You cannot reason with a system who’s continued existence relies on being “unreasonable” to your ideas.

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