Taxation: a Tale of Two Perspectives

Some introductory food for thought...

"Taxation is the price we pay for failing to build a civilised society. The higher the tax level, the greater the failure. A centrally planned totalitarian state represents a complete defeat for the civilised world, while a totally voluntary society represents its ultimate success."

  - Mark Scousen 

"The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation."

 - Vladamir Lenin

"The road to recovery is to stimulate small business and innovation by reducing taxation, regulation, and litigation."

  - Sandy Adams

The premise of Government taxation on the individual in practicality.

Taxation is of course, the levying of wealth from the citizen to the State. However, before I delve into two key theoretical positions on the premise of taxation, it is best surely, to understand the practical administration of taxation in the modern world; where it is spent and for what reasons. Amongst western nations, the tally of taxation can often be high, averaging nearly 50% when including secondary taxes placed on goods. When people are born in the west, their Birth Certificate is signed by their parents, which is a legal document ensuring your legal person to be the guarantor to any debts incurred by your Government, or to the debts of any other nation incapable of paying their debts to your Government. Though, many often broach discussion of the huge deficits of their nations and its unplayable debts, many stray from asking to who these debts are owed. Most central banks are actually privately ran and control the monetary policy of the State and its quotas, whilst all debts and loans are centrally controlled from the International Monetary Fund (IMF) and the World bank. This is one facet of taxation, as one major reason for its seemingly excessive proportions is because the State acts as a middle man between citizen and bank:

 • Government borrows money from Central Bank and owes debt at interest

 • Central bank uses quantitative easing to reduce value of the currency compared 

    to the original loan. 

 • Taxation is collected from the public

 • Government uses tax money to pay it's debts

or:

 • Government loans money to developing nation

 • Developing nation is unable to sufficiently repay its debts

 • Taxation is collected from public as guarantors  

This is one major factor to consider how taxation is administrated practically in the current economy. However, as banks have private and centralised authority over monetary policy, they also control inflation quotas by way of fiat currency which gradually devalues the currency and thus diminishes the stored wealth of people, especially if these quotas exceed the rate of interest, however, even if not, there are many fixed forms of income and expenditure, such as pensions (which are also taxed). 

Another factor of government expenditure is to corporatism, the development of Globalisation and the welfare state. Corporatism and Globalisation virtually coincide as through various free trade deals, the outsourcing of industry is encouraged, for any loss of profit incurred during outsourcing or the period afterwards is reimbursed by the Government, increasing in an ever globalised world with the symbiosis of state and economy at the international level seeing larger monopolies than ever before. In the United States particularly, the military industrial complex accounts for colossal transactions of wealth between Government and Military industry backed by the public purse, whilst under NATO, a minimum 3% of national GDP must be pledged to military spending. Then there is of course the ever encroaching welfare state, particularly criticised in Europe on account of it's generosity that often encourages laziness. With many jobs lost to Globalisation and the mass exodus of immigration coming from Middle eastern nations, many simple can't find work, whilst others avoid it, knowing they can rely on the Government to provide for them. This is useful to consider when discussing perspectives on taxation.

The Libertarian or Classical Liberal perspective...

From this angle high taxation by big Government is seen more as a form of theft. The reasoning for this is that an individuals wealth is the fruit of their labour, and to forcibly levy someone's wealth in order to use it elsewhere or be given to someone else is almost a form of quasi-slavery for your labour is being used both for the subsistence of yourself and that of others. It is also seen as a form of theft because it fits the literal definition of theft, which is to extract property from someone without consent, which is taxation. Libertarianism is of the persuasion that a small government with minimal impediment on a free market society is the most effective economy. Today's Governments are rather socialistic, and have large intrusion into the economy. Because of the influence big Government can have on business, it creates an environment where big business and State must cooperate for mutual benefit, which is more commonly and otherwise known as corruption. This is the reason why Libertarians oppose the idea that a large and overbearing Government should be supported by high taxation on the people. High taxation, along with various State set restrictions, also hinders free market enterprise as people are dragged down by these restrictions, meanwhile, those businesses that are already large, monopolise their industry. Libertarians see Monopolies, class disparity and the inequalities of Capitalism only amplified by large State intervention and high taxation as it results in stagnating the free market and stifling enterprise.  

The Marxist or Proggressive perspective...

The progressive perspective towards taxation is one that sees it as a necessarily effort to balance the scales of class disparity through sliding scale taxes, i.e. High on the rich and low on the poor. They see it fit that the rich should pay a larger share into the pool as they of course have more disposable income, and that these taxes should be used in Government projects and to support the poor. Generally progressivism ignores the major ills within an interventionist system itself and instead uses the bandage of taxation in an often vain attempt to close the gap between rich and poor. I must admit, I am more of the Libertarian persuasion, for rather than dragging the top down in an unsustainable effort to raise bottom up, it is far more economical and prosperous simply to allow business to flourish without the burden of taxation, which should stimulate a high wage economy and more abundance of jobs. George Orwell got it right when he said that Socialists/Progressives don't want to help the poor, it's just that they hate the rich, which seems to be the common parlance of progressive idealism, is that it speaks more with contempt for the rich than it does with sympathy for the poor. Most western economies currently run, and have for some time ran on a system of progressive taxation and has only briefly seen a Libertarian Capitalist style economy, for instance, the period of 1950's-60's America was quite a Libertarian era.  

 - a short essay by FabiusSideman