Comments on: Gross Income Attitudes http://www.inforipple.com/2010/01/gross-income-attitudes/ exploring the tension between liberty and law Fri, 03 May 2013 04:47:51 +0000 hourly 1 http://wordpress.org/?v=3.5.1 By: Quincy http://www.inforipple.com/2010/01/gross-income-attitudes/#comment-126 Quincy Tue, 23 Feb 2010 23:11:54 +0000 http://www.inforipple.com/?p=89#comment-126 The line delineating what is taxable and what is not must be derived from the principle which authorizes taxation. As I wrote in my earlier post, More on the Possibility of Legitimate Government, I do not accept the Anarcho-Capitalist proposition that all non-voluntary taxation is in fact nothing more than the use of violence or threat of violence by one group of citizens to take property from their fellow citizens. In other words, I do not believe that all taxation is illegitimate. To avoid illegitimacy, however, taxation must be justified by a legitimate claim by government to the property of its citizens. Labor certainly cannot provide this basis, for the fruits of labor are wholly the property of the laborer. To argue otherwise one must surrender important values like self ownership and human equality which are the foundations of liberty. So government cannot legitimately tax labor. Consequently, an income tax which claims authority to appropriate a portion of any increase in wealth is illegitimate, for much of what it takes is the exclusive property of the citizen over which government can have no legitimate claim. The only basis that I have been able to reason out which could justify taxation is the one I described in blog post cited above: real property ownership.

Another way of saying this is that the line which divides the taxable from the untaxable is not one which government can draw based on its needs or political power. The line which divides the taxable from the untaxable is already drawn by the foundational principles of liberty and property, and the task of the legislator is simply to discover it and enact laws in harmony with it.

As for your second point, I think that terminology does matter substantively for the following reason. When legislators and citizens begin calling tax exemptions subsidies there is a tendency to try to control what is done with the money. There is a tendency to prescribe rules of conduct over and above the core elements of the exemption to ensure that the exempt money is used in harmony with the political and social philosophies of the party in power.

]]> By: Sean http://www.inforipple.com/2010/01/gross-income-attitudes/#comment-123 Sean Mon, 22 Feb 2010 20:04:52 +0000 http://www.inforipple.com/?p=89#comment-123 So where is the line on what is taxable and what isn’t? If I’m a subsistence farmer, should I be untaxable? If I barter my extra crops with others, should I be untaxable? If I convince a poor grad student to work for me for free (Kramerica Industries), should I be free of taxation for the valuable services they provide? Of course it does get ridiculous at some point, e.g. taxing single income families for the services of a stay-at-home mom, but I wonder if a bright line exists, and what criteria is most important to consider.

On the second point, I wonder if our terminology matters substantively. If the government offers a deduction to someone, why not call it a subsidy, if it isn’t available to everyone? Does the terminology change the tax burdens we’re willing to impose or accept? At some point the line is blurred anyway, with negative taxation actually refunding people more than they paid, but I’m not sure that calling something outside tax law a subsidy or untaxable matters.

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