Taxation, Forced Labor, and Theft
Feser, Edward, Independent Review
The injustice of taxation--of taxation per se, not merely of this or that particular tax policy or of especially high levels of taxation--is a familiar theme of popular libertarian rhetoric. Curiously, it is less evident in the more sophisticated statements of libertarianism emanating from libertarian political philosophers and economists, who tend to base their arguments on appeals to more abstruse considerations of utility maximization, rights theory, and the like. To be sure, a critique of current tax policies, perhaps even of most taxation as such, may often follow from some of those more fundamental considerations; but even so, the connection often has the appearance of an afterthought, something to be passed over quickly on the way to treating more pressing matters. One simply does not find many libertarian intellectuals--certainly not many libertarian academics--insisting that the institution of taxation that sustains the Leviathan state they oppose is clearly and fundamentally illegitimate: illegitimate not merely as currently administered, nor only for reasons that are inconclusive and in any case highly derivative from other considerations only slightly less inconclusive; but illegitimate for reasons that do not require a great deal of argumentation and are difficult in good faith to avoid recognizing--illegitimate for the same sorts of reasons that slavery is illegitimate.
Two important scholars who have insisted on this illegitimacy, however, are Robert Nozick and Murray Rothbard, who presented in their paradigmatic forms the main libertarian arguments against taxation. Strangely, however, those arguments have not been widely discussed even by other libertarian intellectuals. Whatever the reason for that neglect, it has nothing to do with the quality of their arguments. These arguments can be defended against the objections made against them by the (relatively) few critics of libertarianism who have paid them any attention, and they themselves provide a powerful prima facie case for libertarianism.
Nozick on Taxation, Forced Labor, and Self-Ownership
Nozick famously defended the claim that no state more extensive than a minimal state--one that protects individuals from force, fraud, and theft, and that enforces contracts but does little or nothing else--can be morally justified, but he also argued that at least such a state can be justified. In line with this argument, his rejection of taxation is not absolute. He allows for whatever taxation is required in order to fund the activities of the minimal state. He does, however, intend to show that taxation of one's earnings from labor for any purpose beyond that of funding the minimal state--taxation to fund welfare programs, social insurance, the arts, scientific research, and so forth--is morally illegitimate. Therefore, his arguments, if they succeed, carry us far toward a general critique of taxation as such. (As shown later, Rothbard's arguments--and perhaps even Nozick's arguments, if carried through consistently--get us the rest of the way.)(1)
Nozick minces no words in introducing his discussion of taxation: "Taxation of earnings from labor is on a par with forced labor" (1974, 169). This argument is Nozick's best-known objection to taxation and the one he stresses most; he also has a second related but different and philosophically more fundamental objection that such taxation is inconsistent with self-ownership.
Taxation and Forced Labor
Nozick's first argument (1974, 169-71) can be summarized as follows: when you are forced to pay in taxes a percentage of what you earn from laboring, you are in effect forced to labor for someone else because the fruit of part of your labor is taken from you against your will and used for someone else's purposes. Of course, the taxpayer is not forced to perform a specific kind of labor and, in fact, is more or less allowed to perform any kind of labor he likes, but that is not relevant: despite the fact that you may love pumping gas, if you pump gas for three hours for someone else's purposes and do so involuntarily, your labor has been forced. …