Tuesday, January 11, 2005

Taxation: Another Round with Flood

Tony Flood writes via e-mail:

The means of accumulating wealth is exhaustively divisible into two categories of human action: voluntary exchange and forceful (violence-threatening) expropriation. Nonobfuscatorily speaking, then, if X is a coercive levy, then X is not a species of exchange.

BV: First, I don't see that these two categories exhaust the possibilities of accumulating wealth. There are also hunting and gathering and growing crops using seeds one has found in nature. But you don't need this exhaustion claim to make your main point. Second, your main point needs to be formulated more carefully: If X is a coercive levy, then X is not a species of VOLUNTARY exchange.

This looks very plausible. But there is a nuance: there are those who go along with taxation gladly, willingly; they think it is is their best interest. Perhaps they identify their individual will with the general will. So there is a sense in which they go along with the tax system voluntarily. Therefore, to make your opening thesis rock-solid, you need to define the exact sense in which you are using 'voluntary.'

On this understanding, then, to say that “taxes are monies paid in exchange for certain goods and services provided by a government” is _not_ to say “something true about taxes.”

BV: You are falling into a fallacy of equivocation. You are using 'exchange' to cover both voluntary and involuntary exchange. I agree: taxation is subsumable under involuntary exchange. But I didn't say it was voluntary; in the passage you quoted, I described it simply as exchange. Look back at what you wrote. You started with the phrase 'voluntary exchange' but then dropped 'voluntary.' That set you up to misread my use of 'exchange' to mean 'voluntary exchange.' Only on that misreading could you then say what I just quoted you as saying.

Therefore, what I said about taxes is indeed true about taxes. Or at least you have so far given me no reason to think otherwise.

It is also to train attention unhelpfully on the way the coercing agency consumes its ill-gotten gain, thereby obfuscating the salient feature of the act, namely, its coercive character. [...]

BV: From this and what follows, I see that our concerns are different and that we are at crosspurposes. 'Ill-gotten gain' and other phrases you use show that your concern is with the moral questions taxation raises. These are legitimate questions, but my point was a conceptual one about the propriety of referring to SS withholding as a regressive form of taxation. You will recall that I distinguished among conceptual, moral, and economic questions without claiming that that tripartition is exhaustive.

The coercive nature of taxation is well-understood. I do not see how refusing to call SS withholding a tax obscures the fact that SS withholding is also coercive.

I take your position to be that taxation as such is morally unjustified. And if I am not mistaken, this is derivable within your scheme from the moral unjustifiability of any government. But surely you could hold that SS withholding is morally unjustified, in virtue of its being coercive, even if you did not classify it as a tax.

My point that SS withholding is not a regressive tax (because it is not a tax) is not part of a larger argument in support of the moral justifiability of SS; it is directed against liberals and leftists (I distinguish these two species of critter, but don't push me too hard on the exact nature of the difference! [grin]) who want to use the supposed regressivity of the SS tax as part of an argument to remove the present cap and extend the 'tax' upwards along the income scale.

At this point, I think we are at the end of fruitful discussion of this topic. I did, however, carefully read the rest of your message, and I thank you for responding to my posts.