immoral?

As promised, this is my reply to Jason’s comment. Firstly, there seems to be contention over the use of the word immoral, I use that word, as do many libertarians in reference to taxation for two reasons, the first is to make my standpoint on the issue clear, the second, because I believe that by definition it is immoral. Immoral simply means “contrary to moral principles”, most if not all of my moral principles stem from individual rights. One of these individual rights is the right to property, this is not a guarantee that a man will earn any property, but rather that he will have sole ownership to anything that he does earn. Property rights are inalienable in the eyes of the libertarian, if a person has anything but sole control over his own property, then they lack the freedom to pursue their own goals without restriction. If a man earns $100 then it goes against his property rights to use the threat of force (imprisonment for tax evasion) to take any amount of that away from him whatever the noble cause.

Your next point is absolutely true; you say “if taxation was immoral, because it violates individual property rights, then all taxation would not be allowed, not just a progressive system.” I couldn’t agree more, any system of taxation is indeed immoral, however, it would be unreasonable to expect a country to suddenly drop its established ways of working with no intermediate period of transition. So while taxation as a principle is immoral, in practice it is not a single entity, there are many ways of taxing a population, some of those are less oppressive than others. The current system of progressive taxation, I believe is one of the most oppressive systems available. My reasons for this are that it punishes performance. As I said in the article, it is unfair to use a majority to rule over a minority that is different, the idea behind majority rule within a democracy is that the population makes a decision that concerns the whole of the population, you can only include people in the vote who are directly affected by that vote, which is why my next door neighbor does not get to vote on what I eat for dinner tonight, but does get to vote on which party gets elected into power. When the majority earns a certain wage, any tax increases above that wage do not affect the majority and so are easy to pass, but unfair. This is why majority rule does not work in this instance. If we were to change the rules to a flat tax, then the majority is subject to its own decisions, this means that they will not do to others, what they would not do to themselves. This is why I believe a flat tax is fairer.

Your last point about the marginal value of the dollar cannot be argued with, nor would I wish to. However, a flat tax does take this into account due to the very nature of percentages. If a 20% flat tax were imposed with an exemption of $10,000 (for easy calculation) then someone earning $15,000 would be taxed $1000, but someone earning $100,000 would be taxed $18,000. The low earner is taxed 6.67% of their total income, while the high earned is taxed 18% of their total income. A flat tax is not more oppressive to the low earner; it simply brings fairness to the system.

As for a reason beyond fairness, there are plenty. In an earlier post I covered the Laffer curve which gives a reason for the increase in revenue often associated with a decrease in tax rates, so if we were able to follow the route to a flat tax then we would likely see revenue increase, such as happened in the US during the Kennedy tax cuts and the Regan tax cuts. And in the UK with the Thatcher tax cuts. Also, economic growth would likely increase, this is also not just a theoretical prediction, Hong Kong has had a flat tax for years and has seen continued high rates of economic growth, numerous eastern European countries have also seen a turnaround in their economies since they imposed a flat tax. But beyond that, one of the main defenses for a progressive system is that the rich should pay more, however, under progressive systems, there is a significant incentive to reduce the tax liability through both legal and illegal means, with a flat tax, this incentive lessens, and the loopholes are easily closed meaning that the rich do pay their share, unlike the present system.

To conclude, while I would class tax as immoral, I do recognize that this word may be too strong. I do also recognize that tax is not unconstitutional, nor is it imposed for evil means, the people who impose tax are doing so for the best of intentions, but that does not excuse the choice of an inherently unfair system, nor one which does not produce the highest revenue for the smallest restrictions to freedom, such as a flat or negative income tax. Also, while I disagree with tax, I haven’t yet been able to come up with an idea that could reliably replace it, so until then I regard it as a necessary evil. We could remove income tax, however, and use other means such as a consumption tax, but that’s another story for another day.