November 5, 2025
All of us here know that taxation is theft. The government takes part of what you earn and gives it to other people. If this isn't theft, what is? Murray Rothbard showed this better than anyone, as I explained in my column a short time ago. In brief, ""For there is one crucially important power inherent in the nature of the State apparatus. All other persons and groups in society (except for acknowledged and sporadic criminals such as thieves and bank robbers) obtain their income voluntarily: either by selling goods and services to the consuming public, or by voluntary gift (e.g., membership in a club or association, bequest, or inheritance). Only the State obtains its revenue by coercion, by threatening dire penalties should the income not be forthcoming. That coercion is known as 'taxation,' although in less regularized epochs it was often known as 'tribute.' Taxation is theft, purely and simply, even though it is theft on a grand and colossal scale which no acknowledged criminals could hope to match. It is a compulsory seizure of the property of the State's inhabitants, or subjects."
Unfortunately, there are"court intellectuals"who think that theft is all right, and in this week's column I'd like to discuss some of the drivel they put out. When you hear these ideas, you will probably think that nobody could take such stuff seriously, but these people are in deadly earnest. Here is what Rothbard says about the court intellectuals:""It is instructive to inquire why it is that the State, in contrast to the highwayman, invariably surrounds itself with an ideology of legitimacy, why it must indulge in all these hypocrisies. The reason is that the highwayman is not a visible, permanent, legal, or legitimate member of society, let alone a member with exalted status. He is always on the run from his victims or from the State itself. But the State, in contrast to a band of highwaymen, is not considered a criminal organization; on the contrary, its minions have generally held the positions of highest status in society. It is a status that allows the State to feed off its victims while making at least most of them support, or at least be resigned to, this exploitative process. In fact, it is precisely the function of the State's ideological minions and allies to explain to the public that the Emperor does indeed have a fine set of clothes. In brief, the ideologists must explain that, while theft by one or more persons or groups is bad and criminal, that when the State engages in such acts, it is not theft, but the legitimate and even sanctified act called 'taxation.'"
One of these arguments is from the most influential political philosopher of the past century, John Rawls. He says that equality is the default position. Everybody should have the same income. However, he soon modifies this. He realizes that we respond to incentives. If unequal incomes are allowed, this might turn out to be to everybody's advantage. To insist on absolute equality, even if this left everyone worse off, would be cutting off your nose to spite your face.
Rawls proposes his famous difference principle, which says that all inequalities must be to the advantage of the least well-off group. Suppose that someone objects that the difference principle is unfair. "If I am talented and am able to earn more than most people, why should my income be limited to what turns out to be best for the worst off? Don't I have the right to benefit from my superior talents?" Rawls's theory does not rule out the competitive pursuit of excellence. But he believes individuals cannot justifiably complain if they don't get all the benefits from their superior achievement.
Rawls says that people don't deserve to get the rewards of these talents. Aaron Judge earns millions of dollars because he is a great baseball player. Yet his abilities do not stem from any special virtue on his part. He was just lucky that, by some combination of heredity and environment, he ended up with superior skills.
Rawls has ignored something that should be obvious. It's obvious to those of us here. This is that people have a natural right to what they earn. Even if Rawls is right about people being lucky, it doesn't follow that the government can take away part of what you earn and give it to the poor. (And of course, he's wrong that people don't deserve what they earn. If you have talent, you still have to work hard to earn a lot of money. If that isn't desert, what is?) If you choose to help the poor, you're free to do so, but it's up to you. The best defense of natural rights is Murray Rothbard's great book The Ethics of Liberty.
I'd now like to turn to another attempt to justify taxation and show you how to answer it. These leftists don't say, as most leftists do, that property rights aren't absolute: you don't have the right to keep all that you own, if the government's exactions are devoted to a good purpose. Quite the contrary, they adopt a much more radical stance. You are not giving away anything at all to the government when you pay taxes, since you own only what the law says you do.
They are very direct on this point. Here is what they say: "If there is a dominant theme that runs through our discussion, it is this: Private property is a legal convention, defined in part by the tax system; therefore, the tax system cannot be evaluated by looking at its impact on private property, conceived as something that has independent existence and validity. Taxes must be evaluated as part of the overall system of property rights that they help to create.... The conventional nature of property rights is both perfectly obvious and remarkably easy to forget... We cannot start by taking as given... some initial allocation of possessions- what people own, what is theirs, prior to government interference."
An example quickly discloses the authors' fallacy. Suppose that the government banned free speech. Against those who claimed that this violates people's rights, advocates of the ban replied in this way: "Don't you see the obvious conceptual error that underlies your protest? 'Free speech' is a legal category. People have no independent liberty of speech, apart from what a particular legal system grants them. Your opposition is absurd."
They admit that there is a strong objection to their position, namely that it makes us all slaves of the government. They admit that their view "is likely to arouse strong resistance" because it "sounds too much like the claim that the entire social product really belongs to the government, and that all after-tax income should be seen as a kind of dole that each of us receives from the government, if it chooses to look on us with favor."
They shrink from the full implications of their position, because they know people won't stand for the outright assertion that they are slaves of the state. How is this tension in their presentation to be resolved? I suspect that in practice they would not deviate very far from the total subordination of property rights to the state. They consider endowment taxation, in which people are taxed, not just on their income, but rather on their potential to generate revenue. Someone who abandoned a multi-million-dollar business career in order to become a Trappist monk might on the endowment account be taxed as if he continued to receive his former high income. They wind up rejecting this monstrous proposal, though not on the grounds that it compels people to work.
To reject the proposal because it compelled people to work would put them suspiciously close to a famous argument, advanced very effectively by Robert Nozick, that income taxes are like forced labor. Of course they cannot accept this libertarian view; They say that "we may assume that this argument is not dispositive against taxation of earnings." Since taxation is acceptable-this we know a priori-no argument that holds it illegitimate is right. But then we cannot reject endowment taxation if we reason in a way that would also condemn the income tax. "[T]here is no intrinsic moral objection to taxing people who don't earn wages." We can maintain that endowment taxation is "too radical" to put into effect because the public won't accept it; but we cannot reject it in principle. Let's do everything we can to remind people that taxation is theft and get rid of the income tax!