UNFINISHED ARTICLE - Reparations for Taxation
by Austin White
Originally written around November 2010
Would a slave be consenting to his slavery by accepting a meal from his slave master? Is a tax slave wrong to accept benefits from the tax masters?
Discussions on how a libertarian can live in a statist world without deviating from libertarian principles produce many difficult questions. Participants in the discussions soon realize that they are living in a statist minefield where they are constantly at risk of being forced to act in ways contrary to their philosophy. The conclusion is usually that it is near impossible to avoid becoming a tax parasite while still living within civilization and that the best the libertarian can do is lead by example and try to minimize the amount welfare parasitism they engage in.
In this essay I will attempt to explain to what degrees libertarians may consume government-provided services and benefits while still retaining the ability to authentically say they consistently follow the non-aggression principle and live out the libertarian philosophy to the best of their abilities.
To clarify, in this essay the state is defined as no more than a criminal gang; a band of thieves. I am not making a case as to whether or not it is a good idea for libertarians to cease minimizing the amount of welfare-state outputs they consume. I am pondering to what extent people have rights to actively consume government services and benefits.
The word “taxation”, in this essay is shorthand for violent, coercive, compulsory seizure of property. Indeed taxation is a violent act because the entire act is backed up with the threat of death if one sufficiently resists taxation and the threat of prison time and humiliation for less sufficient resistance to taxation.
My thesis is that it is acceptable for a person to reclaim any property of theirs that has been stolen by a criminal gang and that it is equally acceptable for a victim of taxation to reclaim their property by consuming the outputs of the welfare-state. A person has the right to actively (in contrast to unknowingly and unavoidably) consume elective government services and benefits as long as the person is only consuming an amount not exceeding the amount of taxes the person has been forced to pay. If an individual has “paid” $10,000 in taxes then it is okay for the individual to consume $10,000 worth of welfare, but no more. When the tax victim consumes an amount of welfare equal to or less than what the state has stolen from the tax victim, the tax victim is simply taking back what was first stolen from him by the state. Surely if a man has paid $50,000 in taxes, it would be erroneous to label him a hypocrite or welfare parasite if he decides to enjoy $10,000 worth of unemployment or disability welfare.
However, this is no longer the case if he begins consuming an amount of tax-funded welfare greater than what he has paid in taxes. At this point the man has not only retrieved what was first stolen from him, but is now taking other people’s property.
So an older libertarian who has been paying an especially painful amount of taxes for decades is much more justified in actively consuming more government services than a teenage libertarian who has paid little taxes.
Although I agree with Rothbard’s theories of proportional punishment and that a victim of aggression has the right to retaliate and violate the aggressor’s rights to a degree no greater than twice what the victim originally endured (two teeth for a tooth [for instance, a victim of theft has the right to steal an amount from the thief that is double what the victim had stolen from him]), I do not believe this can be the case when it comes to reparations for taxation. The state, at the most, only posses what it has stolen from others and has no wealth of its own. If the two teeth for a tooth system were followed in tax reparations, the state would be unable to pay back half of tax victims. If tax victim A had $100,000 stolen from him by the state and then takes back $200,000, this would result in tax victim B who also had $100,000 stolen from him being unable to get his money back.
Therefore, for justice to be achieved the tax victims would have to be compensated with an equal mix of monetary reparations and labor from the bureaucrats who stole the money (IRS agents, legislatures, the president, etc.). Each tax victim would have to be awarded the exact amount of their money back (no more, no less), which would equal one tooth of the two teeth, and then the other tooth would be the agents of the state providing the tax victim with an amount of labor that would equal the amount of monetary compensation. Other methods of providing compensation will eventually include the auctioning off of the state’s assets as well as the personal assets of government employees who received tax-funded salaries. For the sake of simplicity we will stick with the scenario where tax victims are awarded an equal mix of money and labor.
In the case of tax victims A and B, both would be given back their $100,000 each and then the government employees who participated in the theft would have to be A and B’s restitutional slaves until they’ve worked off an additional $100,000 – if A and B desire the full two teeth for a tooth. Rothbard’s proportional punishment legal system hold’s that the victim has a right to the two teeth, but not an obligation to obtain the two teeth and neither does a third party, such as an arbitration agency, have an obligation or right to obtain the two teeth if it is against A or B’s wishes. If A and B desire, they may seek no reparations and exonerate their aggressors (IRS agents, legislatures, the president, etc.).
Unfortunately, full reparations like this will not be possible until the overwhelming majority of the population becomes libertarians and the state disbands. Fortunately, tax victims may, through increasing their present active consumption of welfare (government services and benefits), take back one of the two teeth now. The other tooth, which will be composed of the restitutional slave labor of bureaucrats, will have to wait.
Determining a reasonable method of calculating the amount of elective government services and benefits a libertarian may justly consume will be difficult and is sure to provoke much debate. Many libertarians believe that the libertarian should at all times be attempting to minimize as much as possible the amount of tax-funded benefits they use – only making exceptions for things such as roads, street lights, sidewalks, police, and fire department services that the government prohibits the private sector from providing and services that there are simply no ways of avoiding (short of becoming a recluse who never leaves the house or moving to your own private island).
What services constitute welfare and elective benefits? What taxes should be included in this calculation? Should consumers who benefit from price ceilings deduct those benefits from the total amount of welfare they can justly consume? What about consumers who detriment from price floors and tariffs? What about libertarians serving in public office who are receiving giant, tax-funded salaries like Ron Paul? Will legislatures who fought for smaller government be punished less? Will legislatures who fought for bigger government be punished more? Can one make a living as a teacher in a public college with a clear conscience? Is it okay for a libertarian college student to enjoy in-state tuition? What should be the criteria for “public goods” like “national defense” that no free market monetary value can be placed on? Is it evil to ship via USPS? Should businessmen who have lobbied for protectionism have to deduct the benefits derived from the protectionism from the total amount of tax-funded benefits they may consume? And don’t forget about subsidies and corporate welfare.
These questions reveal how pervasive wealth redistribution has become in America.
Before continuing it is important that we address the fact that government employees do not pay taxes; therefore government employees are parasitic tax consumers living off of the labor of tax payers. Government employees rarely accept this statement and point out that they pay taxes. What they don’t realize is that any taxes they pay are on income composed of others’ tax dollars. If a government employee receives a salary of $100,000 a year and pays $25,000 in taxes annually, the reality is that the bureaucrat receives a salary of $75,000 a year and pays no taxes at all – because government employees are paid out of tax dollars. Because of this, few people are in a position where they can work for the government without becoming total beneficiaries of stolen property.
A person may work for the government and receive a tax-funded salary as long as the total amount of money they will make in that “job” does not exceed the amount of taxes the person paid before getting the government job. If a person has paid $100,000 in taxes and gets a government job that pays $50,000 a year (after the illusory taxes the government employees pay) that person may work the government job for no longer than two years. After the two years the person is now consuming more tax dollars than they paid and can reasonably be called a tax parasite. An exception would be if a person works for the government, but makes a legitimate living outside of office at the same time and pays taxes on the other source, the non-tax-funded source, of income.
So in the case of Ron Paul, he may be able to work in government and receive a giant tax-funded salary and be able to say that he “walks the walk” of libertarianism. Before going into Congress, Paul was a doctor who probably paid more taxes than the majority of the population. Paul left Congress in the early eighties and returned to medical practice and then once again went to D.C. in 1996 after another decade of paying taxes. In addition, Paul has had much success as a book author (which produces income that he must pay taxes on). He also actively minimizes the amount of benefits he receives by returning unused portions of his congressional budget back to the treasury (he is the only congressperson who does this).
Walter Block believes that a libertarian can work for the government as long as the libertarian is doing so for the purpose of reducing the amount of damage the state inflicts. For instance, Block believes that one could even work as a concentration camp guard if the goal is to help some prisoners escape. Or people can work jobs at the IRS if their goal is to help people get their money back. This theory needs to be elaborated further, but it certainly contains some merit and gives Dr. Paul bonus points considering that every piece of legislation he has ever sponsored is to reduce state power; he always votes against expansions of state power; and he has the record for the most single (434-1) “no” votes.
Whether or not Ron Paul is acting hypocritically by working in government is debatable. We would have to determine the amount of taxes on income obtained in the private sector that the state has extorted from Paul and then determine the amount of tax dollars Paul has consumed as a congressman and compare the two numbers. If he has consumed more than has been stolen from him then a case can be made that he is a tax consumer and is not a tax payer reclaiming his property. It cannot be debated, however, that compared to people who have worked in government their entire lives, it is much more likely that Paul would pass this test.
People who have worked in the public sector for their entire working lives are not at all able to make this case. They are entirely the recipients of stolen money and for justice to prevail they would have to return every dime they have ever received during their working lives back to the specific taxpayers from whom the money was stolen from.
It makes no difference that government employees provide services because no tax payer ever signed a contract agreeing to pay any bureaucrat for the services provided (never mind the fact that few government services offer any benefit to society and that any benefits that are produced are mere fractions of what the market would produce if allowed to).
Tax Payer A never voluntarily traded his money to the government in return for services X, Y, and Z; the government expropriated Tax Payer A’s money and decided what services the money would go to providing without seeking any permission from Tax Payer A. Not only does the state forcefully expropriate money from tax payers without their permission, but it unilaterally decides how much money will be taken. The relationships between tax payers and public service providers do not resemble at all the voluntary, contractual relationships that are the cornerstone of the private sector. Voting and majoritarian democratic elections are not grants of permission; Tax Payer A is not consenting to his money being stolen simply because the majority of voters decide to tax him
