Science & Government Funding
Judge Learned Hand famously wrote the following passage in Gregory v. Helvering:
Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.
Today, it seems people think the opposite – you are not a “patriot” or “good American” unless you are paying Uncle Sam as much as you possibly can, and if you avoid paying taxes you are dishonest. A recent interview of Doug Casey highlights the falsity of this view, and posits that those who buy into the view are glorifying evil:
Louis: Doug, the Taxman cometh, at least for most U.S. citizens who file their annual tax papers on April 15. We get a lot of letters from readers who know about your international lifestyle and wonder about the tax advantages they assume it confers. Is this something you care to talk about?
Doug: Yes; something wicked this way comes, indeed. But first, I have to say that as much as I can understand the guy who flew his airplane into an IRS building, as we once discussed, I do not encourage anyone to break the law. That’s not for ethical reasons – far from it – but strictly on practical grounds. The Taxman can and will come for you, no matter how great or small the amount of tax he expects to extract from you. The IRS can impound your assets, take your computers, freeze your accounts, and make life just about impossible for you, while you struggle to defend yourself against their claims and keep the rest of your life going. The number of IRS horror stories is beyond counting. As the state goes deeper into insolvency, its enforcement of tax laws will necessarily become more draconian. So you absolutely don’t want to become a target.
Louis: So… just bow down and lick the boots of our masters?
Doug: Of course not. People can and should do everything they can to pay as little in taxes as possible. This is an ethical imperative; we must starve the beast. It could even be seen as a patriotic duty – if one believes in such things – to deny revenue to the state any way possible, short of endangering yourself. Starving the beast may be the only way to force it back into its cage – we certainly can’t count on politicians to make the right choices – they’re minions of the state. They inevitably act to make it bigger and more powerful. It’s sad to see well-intentioned people supporting someone like Mitt Romney because they naïvely think he’ll reduce the size of the state and its taxes. The man has absolutely no ethical center; he’ll just try to change the government to suit his whims.
Louis: Can you expand on the ethical imperative aspect?
Doug: Yes. The first thing is to get a grip on who owns the moral high ground. The state, the media, teachers, pundits, corporations – the entire establishment, really – all emphasize the moral correctness of paying taxes. They call someone who doesn’t do so a “tax cheat.” As usual, they have things upside down.
Let’s start with a definition of “theft,” something I hold as immoral and destructive. Theft is to take someone’s property against his will, i.e., by force or fraud. There isn’t a clause in the definition that says, “unless the king or the state takes the property; then it’s no longer theft.” You have a right to defend yourself from theft, regardless of who the thief is or why he is stealing.
It’s much as if a mugger grabs you on the street. You have no moral obligation to give him your money. On the contrary, you have a moral obligation to deny him that money. Does it matter if the thief says he’s going to use it to feed himself? No. Does it matter if he says he’s going to feed a starving person he knows? No. Does it matter if he’s talked to other people in the neighborhood, and 51% of them think he should rob you to feed the starving guy? No. Does it matter if the thief sets himself up as the government? No. Now of course, this gets us into a discussion of the nature of government as an institution, which we’ve talked about before.
But my point here is that you can’t give the tax authorities the moral high ground. That’s important because decent people want to do the morally right thing. This is why sociopaths try to convince people that the wrong thing is the right thing.
If an armed mugger or a gang of muggers wanted my wallet on the street, would I give it to them? Yes, most likely, because I can’t stop them from taking it, and I don’t want them to kill me. But do they have a right to it? No. And every taxpayer should keep that analogy at the top of his mind.
Louis: I also believe that the initiation of the use of force (or fraud, which is a sort of indirect, disguised, form of force) is unethical. It doesn’t matter what the reason for it might be or how many people might approve of the action. But some people claim that taxation is really voluntary – the price one pays for living in society… And if I’m not mistaken, the U.S. government says the federal income tax is voluntary.
Doug: That is a widely promoted lie. It’s propaganda to help statists claim the moral high ground, confuse the argument, and intimidate people who aren’t critical thinkers. Just try not volunteering to pay it and see what happens. Taxation is force alloyed with fraud – a nasty combination. It’s theft, pure and simple. Most people basically admit this when they call taxation a “necessary evil,” somehow mentally evading confrontation with the fact that they are giving sanction to evil. But I question whether there can be such a thing as a “necessary evil.” Can anything evil really be necessary? Can anything necessary really be evil?
Entirely apart from that, if people really wanted anything the state uses its taxes for, they would, should, and could pay for it in the marketplace. Services the state now provides would be offered by entrepreneurs making a profit. I understand, and am somewhat sympathetic, to the argument that a “night-watchman” state is acceptable. But since the state always has a monopoly of force, it inevitably grows like a cancer, to the extent that the parasite overwhelms and kills the host. That’s where we are today.
I think a spade should be called a spade, theft should be recognized for what it is, and evil should be opposed, regardless of the excuses and justifications given for it. Ends do not justify means – and evil means lead to evil ends, as we see in the bloated, corrupt, dangerous governments we have all over the world.
Louis: That runs counter to the conventional wisdom, Doug. Evil or not, most people think taxation is part of the natural order of things, like rain or day and night. Death and taxes are seen as the two inevitable things in life, and you are a silly idealist – if not a dangerous madman – if you believe otherwise.
Doug: That saying about death and taxes is both evil and stupid. It’s a soul-destroying and mind-destroying perversion of reality. It’s evil because it makes people reflexively accept the worst things in the world as permanent and inevitable. As for death, technology is actively advancing to vanquish it. Who knows how far medicine, biotech, and nanotech can delay the onset of death? And taxes are, at best, an artifact of a primitive feudal world; they’re actually no longer necessary in an advanced, free-market civilization.
People also once thought the world was flat, that bathing was unhealthy, and that there was such a thing as the divine right of kings. Many things “everyone knows” just aren’t so, and this is one of those. A government – for those “practical” people who think they need one – that stuck to the basic core functions of police and courts to defend people against force and fraud and a military to defend against invasion, would cost a tiny, tiny fraction of what today’s government costs. And that could be funded in any number of ways that essentially boil down to charging for services.
As it is now, the average U.S. taxpayer probably works half of the year just to pay direct and indirect taxes. That doesn’t even count the cost of businesses destroyed by regulation and lives lost to slow approval of new treatments by regulators, or a million other ways governments burden, obstruct, and harass people.
Louis: I just looked, and Tax Freedom Day this year is April 17.
Doug: That means that all the work the average guy does until April 17 goes to pay for the government that failed to protect him on September 11, 2001, failed to protect him from the crash of 2008, and continues failing him every day. We pay for an organization bent on doing not just the wrong things, but the exact opposite of the right things in economics, foreign policy, and everything else we’ve talked about in all our conversations. It’s rather perverse that Emancipation Day – the day the first slaves in the U.S. were freed in the District of Columbia in 1862 – is April 16. But what is a slave? He’s someone who is deprived by force of the fruits of his labor. Sound familiar? I disapprove of slavery, in any form – including its current form.
However, Tax Freedom Day is an incomplete way of looking at things. What’s the cost to business forced to install equipment to meet government regulations? That’s not paid as a tax, but it’s a serious burden. There’s something called Cost of Government Day that’s a somewhat more inclusive estimate of the burden the state imposes on the average guy…
Louis: I just looked for that too and don’t see that a date for 2012 has been announced yet; but Cost of Government Day for 2011 was August 12. According to that estimate, the average U.S. taxpayer slaved away for about two-thirds of the year to pay for the state and got to keep only a third of the fruit of his labor for his own benefit and improvement.
(h/t to my Uncle Jer.)