A Few Philosophical Thoughts On "Taxation Is Coercion"

Pieter Brueghel the Younger, "Paying the Tax (The Tax Collector)," via Wikimedia Commons

I feel like there's been an uptick in people in the US using "taxation is coercion" or "taxation is theft" to support their given point of view. The topic is obviously enormous and too large to be dealt with in a short blog post, but these are just some thoughts that come to my mind about this idea from the philosophical perspective.

Taxation is only coercive against a backdrop of a very specific theory of ownership -- one in which you have full property rights to whatever you gained in a voluntary transaction. But as we've discussed before, this theory of ownership faces several serious and well-known problems.

First, contemporary economic activity is now enmeshed in complex webs of social, cultural, and political structures and relationships. Many modern voluntary exchanges would be impossible without infrastructure, education, etc. etc. etc. As is often pointed out, the question isn't whether we have to pay for these things -- it's just how much.

Second, if we actually tried to follow a principle in which everyone has full property rights to whatever they gained in a voluntary transaction, we'd run immediately into the difficulty that vast wealth and holdings in western countries derives partly from utterly non-voluntary transactions.

This is because in a theory where you have full property rights to whatever you gained in a voluntary transaction, you do not have rights to whatever you gained through a non-voluntary transaction, and you do not have rights to what was stolen or taken by force. If A steals a diamond ring from B, then A doesn't own the ring -- B does. If A sells the ring to C, C also does not own the ring: justly speaking, B owns the ring, C owns the money they were going to trade for the ring, and A doesn't own anything.

But the land and wealth in rich western countries is enmeshed with a violent history of colonialism, slavery, war, and theft. Under the theory of ownership being proposed, who would own the land in North America? Presumably, Native Americans and Indigenous people and no one else. So the theory leads to very different consequences from the ones it's typically taken to support.

Third, when the full ownership theory is used in ways people don't like, there's a lot of uproar about it, suggesting most people do not endorse or agree with that theory. When Martin Shkreli bought the rights to life-saving drugs and then radically raised the prices, what he did was well within his rights in the full-ownership theory of property. It's his -- he gets to do what he wants.

I've been surprised by the degree of hate against this guy from all sides. I mean, I think the outcomes are bad, but then I'd endorse a different health care system entirely. It's the lack of supporters from other sides I'm struck by.

As I mentioned before, on Reddit there was general applause when a doctor pressed Shkreli on what improvements in the drug "warranted" the price increase. But that's not how our system works. I actually thought Shkreli made a valid point when he said in 2015, “Our shareholders expect us to make as much money as possible ... That’s the ugly, dirty truth.” That's true. The problem is with the system, not with one specific guy.

Anyway, moving beyond the full ownership theory, it seems to me that whatever theory of ownership you adopt, a claim about "coercion" is a moral claim, and once you're in the realm of morality, things are never straightforward. As I discuss in my 2015 book, many people endorse multiple values. In our society, that range of values often includes some right to be free of certain kinds of interference. But it also often includes other values like justice, benevolence, honesty, fidelity, and so on.

So whether taxation is "coercive" isn't the end of a discussion. It's the beginning of a larger discussion, about ownership and what is and isn't coercive, but also about how all the various values we endorse should be implemented and prioritized in some sensible way. Obviously, this is something the citizens can, and do, disagree about, and that's one reason politics is complicated and fraught. 

I don't endorse the kind of full ownership theory that would be necessary to conclude that taxation is coercive, partly because, as this book review explains, taxes are "part of the entire system of property relations, not something that happens after property accrues in private hands." That is, there's no "A owns X and B owns Y" and then you have taxes. Rather, taxes are part of the system of property relations that entails what, exactly, A and B own.

And if property relations are a system of which taxes are one part, then I also believe that other values, like justice and fairness, should play a rule in structuring that system.