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Taxation: The Libertarian View

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Political Philosophy and Taxation

Abstract

Libertarianism is a “many splendored” philosophy, with various dimensions contending with one another. Included is anarcho-capitalism, minarchism or limited government libertarianism, constitutionalism, and classical liberalism. Each category has a different perspective on taxation. This chapter explores all of them. But they all have something in common, otherwise they could not all be included in a chapter devoted to libertarianism and taxation. And what is that: all such viewpoints want to minimize taxes to a far greater degree than any other political economic philosophy.

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Notes

  1. 1.

    The Libertarianism.org website goes into some detail about his brand of libertarianism.

  2. 2.

    In the view of Rothbard (1973): “For centuries, the State (or more strictly, individuals acting in their roles as ‘members of the government’) has cloaked its criminal activity in high-sounding rhetoric. For centuries the State has committed mass murder and called it ‘war’; then ennobled the mass slaughter that ‘war’ involves. For centuries the State has enslaved people into its armed battalions and called it ‘conscription’ in the ‘national service.’ For centuries the State has robbed people at bayonet point and called it ‘taxation.’ In fact, if you wish to know how libertarians regard the State and any of its acts, simply think of the State as a criminal band, and all of the libertarian attitudes will logically fall into place.” For more in this vein see: Anderson and Hill (1979); Benson (1989, 1990); Block (2007b, 2010, 2011f, 2016a, b, c); Casey (2010, 2018); DiLorenzo (2010); Friedman (1989); Gregory (2011); Guillory and Tinsley (2009); Hasnas (1995); Heinrich (2010); Higgs (2009, 2012); Hoppe (2008, 2011a); Huebert (2010); King (2010); Kinsella (2009); Long (2004); McConkey (2013); Molyneux (2008); Murphy (2005); Paul (2008a, b, c); Rockwell (2013); Rothbard (1973, 1975, 1977, 1998); Salerno (2012); Smith (2017); Spooner (2008a, b); Stringham (2007); Tannehill (1984); Tinsley (1998–1999); Wenzel (2013, 2016); Woods (2014).

  3. 3.

    The United States has some 800 military bases located in almost 200 foreign countries. This is not defense. This is offense. How would citizens like it if soldiers from Brazil or Burundi or Belgium were prancing around on our shores?

  4. 4.

    It justifies governmental post roads and post offices and in other ways goes beyond the armies, courts and police of the previous position.

  5. 5.

    Others include Epstein (2003, 2014); Murray (1997) and Buchanan and Tullock (1962).

  6. 6.

    For the Austrian economic perspective according to which there is no such thing as a “market failure” see Anderson (1998); Barnett et al. (2005); Block (2002a); Callahan (2000); Cowen (1988); DiLorenzo (2011); Guillory (2005); Higgs (1995); Hoppe (2003); MacKenzie (2002); Rothbard (1985); Simpson (2005); Westley (2002); Woods (2009a, b).

  7. 7.

    Milton Friedman once articulated his position on this matter at 10% (source: personal conversation with one of the present authors). However, in our estimation, the functions he would allow government would amount to significantly more than that. Hence, our 20% estimate in the text.

  8. 8.

    For example, in the movie “Dr. Strangelove” it was necessary to shoot a Coca Cola machine in order to save the world from a nuclear conflagration. This act was a clear violation of property rights. Libertarians were in effect criticized for wanting to prohibit this deviation from deontology, even though all of humanity would perish. Perish the thought. The libertarian analysis would be of course to destroy this bit of private property, but, then, to pay (a relatively very slight) penalty for so doing.

  9. 9.

    Hans-Hermann Hoppe argues that the only way to get to the truth of any matter is to allow discussion, argumentation, back and forth disagreement, etc. He then asks what are the prerequisites for this to occur? He answers, in a nutshell, respect for the NAP and private property rights. Thus, we can derive an implicit contract to adhere to libertarianism on the part of at least those who value the truth. See on this Block (2004a, 2011g); Eabrasu (2009); Gordon (1988); Hoppe (1988a, b, c, d, 1993a, 1995); Kinsella (1996, 2002); Meng (2002); Rothbard (1988); Van Dun (2009).

  10. 10.

    Well, to be fully inclusive there is always suicide as an escape from the taxman. What about living homeless or in the woods? But even there if the would-be escapee purchases anything, he has to pay sales tax.

  11. 11.

    “I’m from the government, and I’m here to help you” would be considered a sick joke in this quarter.

  12. 12.

    Kelo v. City of New London, 545 U.S. 469 (2005) (O’Connor, dissenting).

  13. 13.

    For more on this unsavory episode in jurisprudence, see Block (2006a); Epstein (2005); Kinsella (2005); Somin (2015).

  14. 14.

    For the case in behalf of privatizing roads, streets and highways, see Block (2009c); for oceans, rivers and lakes, Block and Nelson (2015); for space travel, the Moon and Mars, etc., Nelson and Block (2018).

  15. 15.

    This might well be a much higher price than would have been the case had the homeowner patronized the private fire company. For one thing, it would have constituted a “fire sale” pardon the pun. For another, it would serve as an object lesson for other property owners reluctant to hire fire companies.

  16. 16.

    Milton Friedman has made many and important contributions to the free enterprise philosophy. However, he was guilty of inaugurating the withholding system. See Vance (2005) on this tax policy.

  17. 17.

    Mangu-Ward (2016); Higgs (2007); Friedman (1999).

  18. 18.

    On Social Security as a Ponzi scheme, see Galles (2013); Goodman (2015); Kotlikoff (2014); Salsman (2011); Sowell (2016).

  19. 19.

    For the argument in favor of (libertarians and non-statists) taking money from government, even if they have not paid a single penny in taxes, see Block (1972, 2002b, 2004b, 2006b, 2007a, 2008, 2009a, b, c, 2010, 2011a, b, c, d, 2012b, 2016a, b, c, d); Block and Arakaky (2008); Block and Barnett (2008). The argument is that government is a thief, and it is justified to relieve robbers of their ill-gotten gains.

  20. 20.

    Other supporters of the inheritance tax include Batchelder (2009–2010); Matthews (2014); Prabhakar et al. (2008); White (2008).

  21. 21.

    For further support of the Rothbard position in support of the right of inheritance, and in opposition to inheritance taxation, see Block (2011e, 2012a); Rothbard (1973); Tabarrok (2005); Tullock (1971).

  22. 22.

    When the infamous income tax was introduced in 1913, it was pegged at 1% on incomes above $3000 (which would be about $81,000 today) and a surtax of 6% on incomes over $500,000 (which would be about $13,500,000 today). Understatement of the century, it is quite a bit higher nowadays.

  23. 23.

    Author’s conversation with Bettina Bien Greaves.

  24. 24.

    This phrase, “just taxes” is a logical contradiction for the anarcho-capitalist.

  25. 25.

    This is with the exception of the income tax Lincoln instituted during the war between the states, which was repealed in 1872, and the income tax enacted as part of the 1894 Tariff Act, which was declared unconstitutional in Pollock v. Farmers’ Loan & Trust Company, 157 U.S. 429 (1895), affirmed on rehearing, 158 U.S. 601 (1895).

  26. 26.

    A libertarian objection to this scheme might be couched as follows. Only the proper owners of resources may sell them. The government is not the legitimate owner of the roads. Therefore, this entity would be prohibited from selling them. Moreover, when you sell something, you typically are paid resources. But, if the government is no more than a criminal gang, it would be illicit to give them any money.

  27. 27.

    See on this Block (2003, 2013); Friedman (1962); Goodman and Musgrave (1992); Gratzer (2005); Hamowy (1984); Herbener (1996); Holly (2013); Hoppe (1993b); Johnson et al. (1998); Layden and Block (1996); McGuff and Murphy (2015); McMaken (2019); Murphy (2017); Porter (2006); Tepper (2019); Terrell (2003).

  28. 28.

    Rothbard (1992) recommends the repudiation of the entire national debt. Does this not violate contractual and property rights of the bond holders? They should not have lent money to an illicit institution in the first place.

  29. 29.

    For the case in behalf of ending the Fed see Auerbach (2008); Grim (2009); Murphy (2010); North (2012); Paul (2009); Rothbard (1984); Salerno (2012); Sowell (2011).

  30. 30.

    One mission of the Fed was to protect the value of the dollar. It has atrophied to about 4 cents since its inception. The other mission was to quell the business cycle. But a comparison of the century before and its advent shows that oscillations have increased, not decreased. Since it has done such a great job with these goals it is now taking on two more: global warming and racial and sexual balance.

  31. 31.

    Well, should be, given that the government has been shutting down churches of late.

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Authors and Affiliations

  1. Broadwell College of Business and Economics, Fayetteville State University, Fayetteville, NC, USA

    Robert W. McGee

  2. College of Business, Loyola University, New Orleans, LA, USA

    Walter E. Block

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  1. Robert W. McGee
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Editors and Affiliations

  1. Global Humanistic University, Sint Willibrordus, Curaçao

    Robert F. van Brederode

Overview of Case Law

Overview of Case Law

  • United States

  • Pollock v. Farmers’ Loan & Trust Company, 157 U.S. 429 (1895), affirmed on rehearing, 158 U.S. 601 (1895).

  • Kelo v. City of New London, 545 U.S. 469 (2005) (O’Connor, dissenting).

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McGee, R.W., Block, W.E. (2022). Taxation: The Libertarian View. In: van Brederode, R.F. (eds) Political Philosophy and Taxation. Springer, Singapore. https://doi.org/10.1007/978-981-19-1092-0_7

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