Monday, December 16, 2013

Voluntary Taxation? Not in a Free Society

This past Thursday we were asked a question regarding the “voluntary tax” proposal of Luis Razo of California.  Fortunately, the questioner included a link to a presentation Mr. Razo gave on the proposal, for we had never heard of it before.  Specifically, the question was whether the plan was capitalist or socialist; the questioner couldn’t figure it out.

Our gut reaction is that if you can’t figure it out, then it’s probably not something you want to get involved in.  Our first non-visceral reaction is that, technically, it isn’t either capitalist or socialist — but if we had to pick, it would be socialist.

Why?  As near as we can tell, Mr. Razo wants to replace the “contract” on which civil society is necessarily based, with a bastardized and universal form of “status”; he wants to replace “exchange” with “gift” — and his explanation makes about as much sense as you’d think.  Distributions to citizens of State benefits and contributions to the State would both be based on need.  What Mr. Razo appears to be promoting is a version of what Karl Marx declared as the basis for economic activity in his 1875 Critique of the Gotha Program: “From each according to his abilities, to each according to his needs.”

 Even if this could work — which it can’t, as has been proven over the millennia of human civilization — it should never be done.  Not only is it directly contrary to human nature, it is the straight and narrow to totalitarianism.

Government always falls under the control of those who foot the bill and control the purse strings.  Consolidation of power in the government in the U.S. began when the Union effort in the Civil War was financed on debt instead of taxes, giving the politicians a way to avoid having to go to the taxpayer.

The big shift in the U.S., however, began with Keynesian economics and the New Deal.  As explained by Dr. Harold G. Moulton in The New Philosophy of Public Debt (Washington, DC: The Brookings Institution, 1943), the shift to massive debt financing during the 1930s allowed the government to begin a power grab that would have been impossible under a system in which government revenue was restricted to taxation and borrowing out of existing savings.

By allowing the government to create money by emitting bills of credit in contravention of the Constitution, individual sovereignty, and any checks on the power of government are completely nullified.  Roe v. Wade and Obamacare didn't come out of nowhere.

The transfer of rights from individuals to the State that came out of the Dred Scott decision in 1857 and the Slaughterhouse Cases of 1873 would have been meaningless had it not been for the fact that, at the same time, Salmon P. Chase figured out a way to circumvent the Constitution, and finance the government on "pure credit" instead of past savings.

The bottom line is that, as Daniel Webster reminded us in 1820, "Power naturally and necessarily follows property."  If taxation becomes voluntary, then power will go to those with the money who have the will to seize power by controlling the government's revenue.   It sounds like the ultimate in libertarian political philosophy, but leads to the ultimate in totalitarian government.



Xerographica said...

What about tax choice? Can you figure it out?

Anonymous said...

"Government always falls under the control of those who foot the bill and control the purse strings"

What a load of bullshit.

Michael D. Greaney said...

I can't understand why you chose to remain anonymous, Anonymous. That was an insightful and cogent analysis overthrowing a fundamental principle of government that has guided political science for millennia.