Archive for taxation
Tax Slavery Sucks
Posted by: | CommentsThis article is #19 of a weekly series highlighting the former memes of Bureaucrash, an organization once headed by my friends Pete Eyre and Jason Talley of the Motorhome Diaries. The memes were originally authored by Pete Eyre and Anja Hartleb-Parson, and were intended as means of communicating ideas about liberty in catchy and succinct ways.
According to the Tax Foundation, Americans will spend about 30 percent of their income on taxes in 2008. For comparison, in 1900, it was around 6 percent. Put differently, for almost four months out of the year you work just to pay for government. In the current system most types of income are taxed, sometimes twice, and often progressively. These are just some of the taxes levied by government: federal and local income tax, sales tax, property tax, gasoline tax, cigarette tax, liquor tax, vehicle sales tax, utility tax, marriage license tax, inheritance tax, and capital gains tax, etc. On top of that, you pay to compensate for taxes levied on others. For instance, you, as a consumer, pay higher prices for goods and services because of the corporate income tax levied on businesses. The government, if it is to exist, should protect people from force and fraud. Therefore, at most, government should tax only to maintain a national defense, a police force and law courts. But instead, legislators seek to fulfill the so-called “needs” of the constituencies and special interest groups that put and keep them in office. So, the government has tasked itself with providing cheaper prescription drugs for seniors, improving education for children, supporting for farmers by keeping food prices high and paying them for any product they fail to sell, covering the living expenses of the poor, paying for medical research, and so on. The result is not a system that protects our individual rights but a system that provides benefits to some at the expense of others. Typically there will be concentrated benefits and dispersed costs, which makes organizing resistance difficult and leads to even larger government interference.
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Tags: economics, ethics, memes, money, property rights, taxation, taxes
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Stop Rent-seeking
Posted by: | CommentsThis article is #17 of a weekly series highlighting the former memes of Bureaucrash, an organization once headed by my friends Pete Eyre and Jason Talley of the Motorhome Diaries. The memes were originally authored by Pete Eyre and Anja Hartleb-Parson, and were intended as means of communicating ideas about liberty in catchy and succinct ways.
Rent-seeking refers to the behavior of individuals or groups expending resources to achieve public policy decisions that transfer wealth to them at the expense of others. Some examples:
- A nonprofit organization might seek for the government to spend taxpayer money on their pet cause, such as protecting the environment or researching a disease.
- A workers’ union might want the government to force employers to provide higher wages, more benefits and greater job security.
- A corporation might seek subsidization to support an unsustainable business model instead of working to become more profitable.
While the rent-seekers should be faulted for the behavior, it is the government granting rent-seekers what they want that is the real problem. As it shells out more benefits and privileges, government has to collect more taxes to administer and pay for them, thus vastly increasing its size and scope.
Rent-seeking is theft. A rent-seeker wants to achieve a wealth transfer in his favor without having to provide value in return. In a mixed economy, companies and organizations find it more effective to petition the government for protection (i.e. subsidies, tariffs, entry barriers, regulations, etc.) than to compete by providing goods and services that consumers want to pay for. Since in a free market the choices of other individuals might not go in his favor, the rent-seeker would rather have the government initiate force against those individuals. The free market, on the other hand, is predicated upon and respects individuals’ free choices. Rent-seekers hinder the dynamism of the free market. When you and I trade in the free market, we each give the other something the other wants more than we want it, relative to what we receive in exchange. By contrast, when the government initiates force in favor of a rent-seeker, it makes everybody but the rent-seeker worse off. It leaves the rent-seeker’s competitors worse off, because the rent-seeker now has a government-enforced advantage, whether in the form of a government-approved monopoly, or stifling regulations faced by would-be entrepreneurs. Because market forces and signals are hindered and distorted, this leaves consumers worse off. They are forced to pay higher prices for poorer quality goods and services.
Rent-seeking harms economic growth. Instead of companies investing their money in new technology, new jobs, offering consumers better products and better prices, or increasing their employees’ pay, the money ends up in the pockets of lobbyists and the politicians able to grant favors. Consumers are forced to pay more for goods and services and taxpayers have to foot the bill for the rent-seekers’ government-enforced advantage. So, over time, as government arbitrarily favors one group over another and expands in size in order to pay for rents, rent-seeking erodes the mechanisms that make economic growth and wealth creation possible: the impartial rule of law, limited government and individual rights.
Statists, whether out of distrust of individuals or faith in the ability of the government, prefer that the state controls people instead of people controlling themselves; they opt for government intervention rather than individual liberty. Statist policies can include regulation of the economy, provision of social goods, and control over personal behaviors. Many political ideologies can be subsumed under the label “statist” — communism, fascism, authoritarianism, totalitarianism. Even a democracy can become statist if it does not create or does not follow constitutional safeguards against the majority imposing its will without regard for the individual rights of the minority.
Statism is anti-liberty. Individuals have property in themselves, also called self-ownership, which entails they should be free to control their bodies, their minds and their lives. The only way to interfere with that freedom is by means of physical force. The job of governments is to defend individual rights by protecting individuals against the initiation of physical force. However, when governments institute statist policies, they initiate force against individuals who are not infringing on the liberty of others and thus violate individual rights. For instance, regulations, tariffs and subsidies for businesses violate the rights of entrepreneurs and consumers, who both are prevented from voluntarily determining the terms of their interactions with others. If I choose to not give my money to a certain business, government has no authority to overrule that decision. It violates my freedom of choice and deprives others of the property they would have gained in the absence of government interference. Immigration restrictions violate the rights of individuals, since they are prevented from peacefully living and working where they choose to. Bans on smoking and the use of other drugs, speed limits and seat belt requirements, and laws preventing the sale of organs violate your rights since you are prevented from making decisions about your own body.
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Tags: economics, individualism, liberty, memes, private property, taxation
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It’s Tax Day 2010, have you paid your fee to live?
Posted by: | CommentsToday is Thursday April 15th, 2010, and today your tax return is due. Last year I wrote a 10 article series leading up to April 15 called “10 Things I Hate About Taxes,” so here are some links back to those articles with brief quotes.
Lost Productivity – “Ever wondered how much time and money are lost through federal tax returns? It actually is rather astounding even by conservative estimates.”
Newspeak – “Governments manipulate language for their own purposes constantly. It allows them to circumvent truth in the public square (at least to the unobservant eye and ear).”
The Truth About Government Spending – “Every cent that the government spends is the tax, not merely what is collected. Every cent spent is an income tax. Cutting collected taxes without cutting spending is merely tax deferment, nothing more.”
Privacy and Personal Income – “Let’s ask again, what right does the government have to my income, or even the information about my income? Constitutionally, the government does not have the right to force information about my income from me.”
Your Tax Dollars at Work – “Think about all the crazy things you know your tax money pays for…”
Withholding Taxes – “The withholding tax allows the government to make their insane demands more palatable to us. A penny here, a penny there – these won’t add up to much in the end, right? Withholdings from every paycheck is like silent theft, gone unnoticed.”
Caesar’s Benevolence – “Government benevolence is notoriously inefficient. Statistics show that for every dollar the government uses in a ‘benevolent way,’ only 25 cents actually is used to ‘help’ those in need.”
Living in Fear – “To say that the tax code is complicated would be the understatement of the century. It is, in fact, far beyond complicated, so much so that no one in this world could possibly understand it.”
Taxation is Theft – “I have already said and illustrated this numerous times in previous articles, but I will say it once again: Taxation is theft, period.”
Lost Prosperity – “We have to realize that trade, the social mechanism of increasing our economic well-being, is a win-win proposition. By definition, when you and I agree to trade the fruits of our labor, we are implicitly agreeing that we are both better off by making the transaction. Conversely, government force is a lose-lose proposition.”
Epilogue – “The government has over $56 trillion of outstanding, unfunded liabilities – financial commitments that you and I will pay. If this number seems hard to comprehend, then picture that this is $184,000 for every man, woman, and child in the United States.”
Are you attending a Tax Day Protest today? I’ll be at the south steps of the Texas Capitol come late afternoon, speaking out about the evils of the State. I hope you get a chance to do the same soon.
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Tags: ethics, government, taxation, taxes, theft
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Joe Stack and the IRS: A Christian Libertarian Response
Posted by: | CommentsFrom an Austin resident and Christian libertarian
On February 18, 2010, Joe Stack set the final plan of his life in motion. At roughly 9:00 a.m., he burned his house down, traumatizing his wife and child. By 9:40 a.m., Stack had departed from the Georgetown airport 21 miles from his home in his Piper Cherokee PA 28 airplane. At 9:56 a.m., he crashed this plane into an IRS office near the intersection of Mopac Boulevard and U.S. Route 183 in Austin, Texas, ending his own life, killing one individual, seriously wounding others, and causing immeasurable grief to many more. Read More→
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Tags: Austin, News, taxation, taxes, Tea Party, Texas, theft
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Black Magic
Posted by: | CommentsBy Edmund Opitz
Every individual tries to economize his energies by satisfying his needs and desires with a minimum of effort—within the limits of his ethical code.
The urge to achieve better results with less effort accounts for all inventions, including that most fundamental of all labor-saving devices, the market—a name given to the basic human institution which permits division of labor, specialization, and the exchange of goods and services. Human achievement in fields of religion, art, knowledge, and science is possible to the degree that man finds ways to do what he does best and then trades the result for the specialties of other men.
Thus each man draws upon the specialized output of every other man as the most efficient way of meeting his own varied needs. The market process conserves energy; and if this surplus energy is used creatively, civilization is a byproduct of it.
This same tendency to minimize effort drives many persons to practice a kind of black magic; they seek to control other people by means of the political agency and thus obtain economic goods without working for them. That is to say, they regard their fellows as natural hosts for their parasitic or predatory tactics. Instead of satisfying their wants through their own productive efforts, they expropriate the property of others.
Robbery is a labor-saving device for a few, though it has its obvious limitations. Accumulation is necessary before there is even a temptation to rob. And there is no accumulation unless men have access to the primary labor-saving device, the market. Without a market, if such a situation could be imagined, men would live a hand to mouth existence and nothing would be left over to steal.
Some men have employed robbery as a labor saver ever since the dawn of history. They so employ it today. Men are prompted to steal by a perversion of the same good impulse to conserve energy which leads them to invent other labor-saving devices. But good impulses, if they are not to go astray, need to be harnessed to good ethics and good sense.
The robber, once established in his profession, feels the pull of progress and yearns to streamline his methods, just like the for-ward-looking members of the more respectable trades. He does not contemplate anything like personal reformation. To work for what he wants instead of hijacking the fruits of others’ labor would stain the professional honor. But with the general refinement of moral values, barefaced robbery comes into conflict with the code of the tribe—and also runs up against the group’s constabulary. For it is just as natural for the producer to police the routes of trade as it is for the nonproducer to raid them. With the constabulary in action, the independent robber has to use so much energy defending himself against the hostility his acts arouse that robbery ceases to be a labor-saving expedient.
Professional robbery was in danger of becoming a lost art, but the primordial human urge to get maximum return for minimum effort gave it new life by legalizing it.
In order to restore robbery’s labor-saving advantages, the predator and parasite had to effect an alliance with the constabulary. They went about this by setting up a political agency composed of two partners: those who hold public office and control the apparatus of coercion, and those private citizens who appear to benefit by the exercise of political power. The seeming benefits in this arrangement are material; they consist of special privileges—political grants to some at the expense of others. All are taxed; a few are subsidized. The political racketeer sells “protection” to the producers who are his victims, promising that they won’t be robbed by foreigners, nor by natives other than himself, and then only at regular intervals. As part of the deal, the victims are given back a tiny fraction of what they have given up, in the form of “public benefits.”
These “public benefits” seem to appear as if by magic, black magic. In the eyes of many people, political alchemy does what the philosopher’s stone could not do; it waves a wand and housing developments, dams, and power plants appear; it waves a contract, and lo, an industry is built on it; it utters the incantation, “parity,” and the country is buried under eggs, wheat, potatoes, and butter. If this is not black magic, what is it?
It has all the outward signs of magic or legerdemain. And the art of legerdemain, as Houdini used to say, is nine-tenths distraction M the rest is mere jugglery. The hand is not quicker than the eye; unless the hand can palm the card during the instant when the eye is elsewhere, the illusion fails.
The same is true of contemporary political activities. As long as the public can be kept distracted by having its eyes glued to the latest political marvel—a dam, a federal housing project, or whatever the real political game goes on, just as it has since time began. The things which go unnoticed are artful elaborations of the primitive labor-saving device of robbery. What is seen is the new housing or hydro-electric project; not seen is the clothing, food, education, or whatnot that citizens would be enjoying now if their means of obtaining them had not been taxed away for political handouts.
The political action which results in a dam or a pyramid or an office building is not the creation of wealth out of nothing by political alchemy; to the contrary. Such action directs attention away from the incalculable loss of wealth which it necessarily entails. The arithmetical sum of all monies taxed away from producers is a poor measure of this loss, for two reasons. In the first place, a huge percentage of the total is consumed by the partners of this political agency in nonproductive ways. And secondly, if all personal earnings were put to creative use through voluntary exchange—instead of being drained off into pyramid-building or its equivalent—the increase in the total amount of wealth available for distribution would be enormous.
Men are not angels; their actions will always deviate to some extent from their principles. But this is no excuse for erecting the deviations from principle into a solemn high philosophy of society. The natural impulse to satisfy desires along the line of least resistance leads some people into efforts to get something for nothing—which is what black magic really is. But the kind of a universe we live in will not long deliver if it is approached on these terms. Black magic may appear to work for a time, but there is a natural balance in things which assures that they will not be mismanaged long. Nature will not tolerate disorder; God is not mocked.
Originally published in The Freeman, February 1956.
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Tags: economics, Edmund Opitz, taxation, theft
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