Wednesday, 22 November 2017

Are Taxes Theft?

‘I work hard and I deserve my money and then the government take it and give it to lazy buggers who don’t deserve it.’ How often have you heard that sentiment? How often have you found yourself agreeing with it even if only a little bit? How difficult do you find it to argue against such a sentiment? How much has this sentiment driven the demand for only the ‘truly deserving’ receiving aid, for lobbying for spending my money appropriately, for demanding low taxation rates and then implementing service cuts?

In answering this you can’t help but feel the pressure of an overarching metaphor that drives people’s feeling and attitudes towards taxes – the metaphor of taxes are theft. This metaphor drives and frames debates over what taxes are and how they should be used. This metaphor drives the need to ‘check’ taxes are being spent properly. This metaphor encourages people to see their taxes as remaining their money and under their control after they have paid them.

All the above may seem more or less reasonable but is that because the metaphor has become so all embracing that we can now only see taxation though the lens of this metaphor?

Let’s think about the metaphor a bit more. The basis of the metaphor lies in the extension of the idea of ownership to money. The argument runs something like this - the money I earn is mine, it is my property, I own it so if you take it you are stealing from me. Taxation in this view is just state sanctioned theft. As it is theft then the individual has every right to avoid taxes, to pay as little as they can get away with. If they can’t escape paying taxes then, as the money is really theirs, they feel that they have every right to demand control over how the money is spent and to whom it is given.
The taxes are theft metaphor have such resonance because they dovetail with the deep-seated desire for and expectation of individual control. The ‘taxation as theft’ metaphor links with a whole mesh of metaphors about personal control and responsibility that, through their linkages, strengthen each other’s plausibility. Individuals can’t give up on the view that their money is still theirs even when the state have it as taxes. Nor can they give up on the idea that they can control how it is used, that they can define who deserves their money and who does not. It also means that there is an undemocratic view that the more someone pays in taxes, the more they have a right, an ownership, of the use of taxes. Within such a metaphor, the insistence that only the deserving, as defined by them, receive the benefits of their taxes is overwhelming as is the demand that the way taxes are spent is properly tracked.

As the state defines and protects property rights, such rights are not a given. No state would mean no organisation to define and enforce ownership rights. Ownership is dependent on a state and its institutions which requires funds to operate to ensure that ownership rights can be sustained.  As importantly, people don’t earn money in a vacuum, they earn it as part of an economy and a society. That society is often uneven in terms of wealth, opportunities and outcomes, but without it there would be no economy to generate the money that individuals earn. Taxes are a way of diverting money back into that society and economy to benefit everyone through development and growth. Individuals who benefit most from the way society and economy are structured earn most and so pay most to maintain and develop that economy and society. Taxes are an investment in the very society and economy that provide the income of the taxed.

So a better metaphor for taxes might be thought of an investment in society and the economy. As with investments through banks, all funds are pooled and then used to invest in diverse enterprises that create a return to the economy and society as a whole. Except this metaphor is not perfect either. Even this metaphor still has the control of taxes as a key characteristic. When you invest you expect to be able to specify the types of activities you are happy to invest in and those you are not.  With taxation, an individual expects to be able to identify and delineate their personal taxes from the ocean of taxes flowing to the state. It is as if a single raindrop thinks it can retain its own identity as it merges into the sea. 

Countering the ‘taxes are theft’ metaphor is crucial if taxes are to be seen as the essential lubricant for economic and society development and growth rather than the stealthy theft of wealth. If the metaphor is not countered then all debate takes place within the constants of that metaphor and so limits and defines acceptable evidence and arguments.

For more on the metaphor these website are useful:





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