Hang around libertarians and you’ll soon hear someone declare that “taxation is theft”, or that tax is money “extorted over the barrel of the gun”.
The natural rights argument against tax runs something like this:
- I own my body
- Therefore, I own the product of my labour.
- The initiation of force against property is theft.
- Therefore, taxation is theft.
Setting aside the logic of the above argument, let’s consider a hypothetical situation where tax is organised through voluntary contract.
The setting is Libertopia; there’s no tax and all services including the military, police and courts are provided by privately run firms. Along comes GuvCorp who starts buying land and leasing it to Libertopians with an unusual set of terms: Rather than paying a fixed rent each month, tenants are instead charged a percentage of their income. Furthermore, GuvCorp reserves the right to pass laws governing the social and economic conduct of tenants while they remain on the lease. GuvCorp stipulates that the terms of the lease may be changed at any time, provided a two-thirds majority of shareholders agree to the change. GuvCorp undertakes to provide various social services as well as to defend tenants from non-GuvCorp coercion.
Tenants may break the lease only be leaving GuvCorp land.
Over time, land leased out by our hypothetical corporation proves highly popular and it expands its property portfolio to the point where it owns large contiguous blocks of Libertopia. A thousand years pass and GuvCorp now owns all the land in Libertopia and has ceased to act like a corporation. Instead, it acts like a government; it issues passports, collects tax and regulates business. Sadly, the income tax rate is 95%, alcohol is prohibited, and it takes years to to start a business. All firearms are prohibited.
Residents are required to sign a GuvCorp lease upon reaching the age of 18. Failure to do so results in the immediate expulsion of the individual from GuvCorp property and hence from the country.
Would Natural Rights Libertarians accept the above situation? Of course not! They’d still brandish their copies of Atlas Shrugged, claim ownership of their labour and denounce GuvCorp taxation.
The point of the above is that Natural Rights Libertarians miss what’s important when they reduce liberty to a series of dogmatic axioms like “the right to bear arms”, “it’s wrong to initiate force against person or property” and “freedom of contract”.
Australia emerged from coercion and the theft of Aboriginal land 200 years ago while GuvCorp emerged and operates entirely through voluntary contract. Yet despite its coercive foundations and statist operation, Australia would be the preferred home of most libertarians. This is because it delivers the lived experience of human liberty rather than adherence to libertarian axioms. Voluntary contracts and property rights are only good insofar as they promote human freedom and wellbeing.
They are not ends in themselves.