Economics of public choice

TAXATION IS THEFT?

When Sam the mugger, decides to rob you of your valuable goods or hard earned money at gunpoint, you instantly know what the act is called: theft. You do not only receive sympathy from the public, but are also found entitled to police support and protection. The city administration upon learning of the incident would most certainly show some anxiety over deteriorating law and order situation and the government would certainly criticize the thug's immoral act.

However lets just suppose that Sam the mugger wants you money again. But this time, some respectable people like senators, parliamentarians, Congressmen etc., accompany him. Instead of the gun, he carries an official letter that says certain percentage of your hard earned money is now his. The tone remains the same i.e. threatening. You give him money OR ... The dire consequences of not complying with his 'request' are repeated reiterated lest you refuse. This time, you are not supported by anyone. The public is confused and cannot understand which side to vouch for. The police and law enforcement clearly favor Sam the mugger. Government obviously lashes out at no one else but you. In short you are now the culprit since Sam the mugger has massive state support.

However in both situations: the original cause of conflict remains the same. You are being forced to part with your money and are being threatened of grim consequences if you choose not to comply. In short you rights are being violated. So does the fact that Sam the mugger has chosen to rob you through political process makes his act less reprehensible. The answer is an emphatic No. Theft is theft regardless of the means used. This is because what a man produces by his own effort or gains through fair means, is his property unless he chooses to part with it of his own free will.

In Principles of Political Economy, Mill (1970) argues against taxation saying that every citizen has " ... A right to the exclusive disposal of what he or she have produced by their own exertions, or received either by gift or by fair agreement, without force or fraud, from those who produced it. The foundation of the whole is, the right of producers to what they themselves have produced." (p. 368)

What a man produces is thus his exclusive property and he has the right to use that property in whichever manner he chooses to. To stop his from owning that property or exchanging it for something he finds valuable is in violation of fundamental rights defined in the Declaration of Independence. Mill further asserts:

"The right of property includes, then, the freedom of acquiring by contract. The right of each to what he has produced) implies a right to what has been produced by others, if obtained by their consent; since the producers must either have given it from good will, or exchanged it for what they esteemed an equivalent, and to prevent them from doing so would be to infringe their right of property in the product of their own industry." (p. 369)

What we need to understand here is the essential role of a government. What is it that a government is expected to achieve and accomplish. An answer to this question will further help us understand why is taxation considered stealing through political means. Government is formed with one purpose in mind i.e. To protect the rights of people and to thwart any attempt at violating the same. This means that not only protection of individual rights but stemming the process or attempt of violation of rights is also the responsibility of the government. While there can be occasions when government inadvertently might violate one's individual rights but we must be convinced that it was an isolated case and not some deliberate action on large scale carried out with the help political institutions.

" ....the primary concern of government must be protection of the rights of individuals. We seek a government that is strong enough to protect rights but that does not violate rights. This constitutional problem has a theoretical component and a practical component: We need assurance that it is theoretically possible to have a government that protects rights without violating rights; the practical problem is to identify the political institutions that are most likely to produce this result. Given human fallibility, there can be no guarantee that a government will never violate anyone's rights, but we should be able to devise political institutions that do not violate rights systematically, that is, moral lapses should be exceptions and not the rule." (Pollock: 58)

In other words government is not expected to steal money from us and then convince us that it was for our own good. This is because this action is in complete violation of the fundamental principle on which a free state and democracy are based i.e. freedom of choice. In a free-market economy and similarly in a democratic state, freedom of choice is considered the basic right of all individuals. Violation of this right is a crime against the state. So when the government says that taxes are levied in exchange of various services and utilities, it completely forgets about this right to choose. This is because this argument of paying for services is based on flawed premise.

The right to choose entails that I choose the type of service I want, as and when I want it, the extent and the duration of the service, the quality of it etc. And then pay for it accordingly and not ever be forced to do the same if I am not using the service. However with government, I am never allowed to do any of that. I am supposed to buy all the utilities at government's monopolistic prices whose quality is not even consistently good and on top of that, I am threatened with severe consequences if I choose not to pay for those services if I do not plan to use them. So where does 'choice' play a role in all this.

G.A. Cohen contends that taxation amounts to theft because it conflicts with the idea of self-ownership:

Suppose that whenever I scratch my back I am required by the state to scratch someone else's. It surely follows that I lack full ownership of my hand. And the implication of non-(full) ownership survives when we suppose that if I scratch your back in return for scratching mine, then some further scratching of the backs of third parties can be exacted by the state from each of us, after the manner of redistributive income taxation. (1995, 220-21)