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Source link: http://archive.mises.org/4883/taxes-good-for-you/

Taxes Good for You?

April 7, 2006 by

This piece by Charles Wheelan, by the economics editor of Yahoo Finance, is provocatively titled “Taxes Can Be Good for You.” So we read and read to find out precisely how it is the case that having some of our earnings and property taken from us by force can actually be good for us as individuals. In the course of his argument he makes silly comments like: “A nation with zero taxes would look something like Haiti, or Baghdad just after the U.S. invasion.”

Come again? It took one click to find that Haiti is not a great place to do business: it has a corporate income tax of 15-35%, SocSec tax of 6%, a property tax of 15%, a payroll tax of 2%, a cap gains tax of 10%, a VAT of 10% a transfer tax of 3%, and a insurance mandate of 3%, for a total tax of gross profits of 31%. One more click shows that individual income tax rates are 30% over $19,000. The Index of Econ Freedom says: “Property is not secure in Haiti.”

Of course it turns out–and you have to get to the end to discover this–that what he really means is that forcing you not to do things that you want to do is good for society. Examples: you should drive a smaller car, drive less, and live in smaller houses because your current spending priorities do not match his view of social and economic priorities. So I’m sorry to report that the piece doesn’t live up to its billing. His thesis is that what is good for you is not necessarily what is good for all, which is why the government needs to step in and force you to do what he regards as the right thing (I’m making his argument for him more elaborately and explicitly than he makes it himself). Perhaps his article should be called “A Tax Plan That is Bad for You, But Good for My Political Agenda.”

{ 22 comments }

Brad Dexter April 7, 2006 at 9:13 am

Using coercive confiscation of property for behavior control.

And this isn’t a heart chilling dystopia, but a warm, friendly environment?

The arrogance of some people is amazing. I swear we live in an era where grandiose schizophrenia is the order of the day.

David C April 7, 2006 at 9:19 am

By that logic, if a lady gets attacked, and raped, she might toughen up and struggle thru the recovery and come out a stronger person. Now then, to come along and say that because of that the rape was good for her isn’t an observation, but really just another form of attack.

sp3tt April 7, 2006 at 10:08 am

Murder is good for you too!

Steven Kane April 7, 2006 at 10:54 am

Wow, after reading that piece I became a New Communist Man. Amazing!

Curt Howland April 7, 2006 at 11:42 am

Don’t laugh, folks. Using confiscation for behavior control is what regulation is all about, from the most minor zoning regulation to the income tax itself.

Yancey Ward April 7, 2006 at 12:50 pm

You would think that if it were so good for you, all of the socialists would be stepping forward and voluntarily surrendering their money to the government.

drs April 7, 2006 at 12:58 pm

Do they really believe this? Is it a propaganda compaign? Or are they engaging in doublethink?

Daniel Coleman April 7, 2006 at 9:08 pm

Well, stated, Jeffrey. Unfortunately, many “open minds” are going to listen to this man’s voice, and will later cite him as an “economic expert”. . . .

Paul D April 8, 2006 at 8:55 am

“You would think that if it were so good for you, all of the socialists would be stepping forward and voluntarily surrendering their money to the government.”

I always wonder the same thing, Yancey! If these socialists are so keen on the government’s financial omniscience and wisdom, why don’t they send in their money voluntarily? Could it be because they’re really just scoundrels that want to get as much out of the state as possible like everyone else who’s state-dependant?

Wild Pegasus April 8, 2006 at 4:55 pm

In fairness to the argument – although it’s wrong – tax collection in Haiti is nearly non-existent because of persistent violence, civil unrest, and intragovernmental squabbles. The difference between the statutes and reality is huge.

- Josh

Wild Pegasus April 9, 2006 at 5:49 pm

On second thought, he’s got it precisely backwards. It’s not easy tax collection that allows social peace, it’s social peace that allows easy tax collection. Sudan could raise taxes to 1000%, but it’s not going to affect how well it can collect them during a sectarian war. You must have social peace first, and then you can decide how generous state pensions will be.

- Josh

darjen April 9, 2006 at 7:01 pm

Wild Pegasus – not only that, but the author conveniently forgets that these difficult situations in Haiti and Iraq were caused by relentless State intervention.

A.B. Dada April 9, 2006 at 11:31 pm

I’m interested in finding how who “All” is and how I can help “All” because it seems that “All” is needier than me. Repeated calls to 411 get me no phone number, and not even the politicians who take my income seem to know exactly who it is that they’re trying to help.

If I knew who this person was, I’d be happy to spend some personal time with them and teach them the value in saving for a rainy day. It seems that they’re confused about what it means to be responsible AND look to the future rather than the now. I have a sick feeling that this Mr. “All” might just be someone who spends before they receive, borrows against overvalued assets, and demands that I treat them as if they were responsible and worthy of my time.

If you know who “All” is, tell them to give me a call, I have a bunch of favors for which they owe me.

Hercules January 10, 2008 at 5:07 am

Let’s agree that no one likes to pay taxes, and obviously we all wish we could pay less (yet receive the same benefits), but taxes are not “theft”, or an affliction from which to get tax “relief”, or a usurpation by an authoritarian government; they are the legitimate dues we pay to live in this society, willingly and democratically agreed upon by the American people through the representatives we elected.

Inquisitor January 10, 2008 at 8:42 am

Sorry, don’t remember agreeing to such a thing, ever. If I want something I reach an agreement with a seller, and pay for it. I don’t enter imaginary ‘social contracts’.

Parrotocracy January 10, 2008 at 8:52 am

Hercules,

Many do not elect those bums. How is that fair? The more the government makes decisions the less ordinary folk are allowed to. Is there no right of individual conscience? Taxation, as an act, presupposes one entity has more prior right than another. The power to tax is one of the oldest forms of inequality, involuntary servitude even. Civilization certainly obliges individuals, but taxes should not be on the list.

Jean Paul January 10, 2008 at 4:15 pm

So on the topic of taxes, the worst one by far is the property tax – because that’s the one that leaves you no options. It is an inescapable rent that must be earned and paid in depreciating dollars, in perpetuity.

That’s the FIRST one I’d get rid of, and nevermind the Georgists.

Hercules January 16, 2008 at 4:25 pm

Parrotocracy,
So majority rules democracy is not fair? The government is us, and we democratically elect representative who administer it. The right of individual concience is protected by the 1st amendment and protects religious belief, not the desire to avoid contributing one’s legitimate dues, thereby vetoing the decision of 130 million fellow citizens.

Peter January 16, 2008 at 7:56 pm

Hercules, you’ve obviously been spending too much time working on your physical strength, your mind has turned to mush :|

“The theory which construes taxes on the analogy of club dues or of the purchase of the services of, say, a doctor only proves how far removed this part of the social sciences is from scientific habits of mind.” – Joseph Schumpeter

TLWP Sam January 16, 2008 at 8:15 pm

Or Democracy isn’t better than a Monarchy? In a Monarchy a person was born at the right place at the right time and a Monarch expects payment as a property owner. Yet this OK because it is synymous with private property ownerhsip?

Beekla May 24, 2008 at 10:58 pm

Tis true that governments cannot be supported without great charge, and it is fit everyone who enjoys a share of protection should pay out of his estate his proportion of the maintenance of it.

– John Locke

The subjects of every state ought to contribute toward the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state ….[As Henry Home (Lord Kames) has written, a goal of taxation should be to] “remedy inequality of riches as much as possible, by relieving the poor and burdening the rich.”

–Adam Smith

Taxes are what we pay for civilized society.
–Oliver Wendell Holmes Junior

Taxes are not theft. You are protected by the police, you drive on roads, you’re rights are protected and contracts enforced by the courts, and you are free to negotiate the contract or leave. The idea that taxes are theft is not only absurd and inane, but is one of the primary failings of libertarian thinking.

Oops May 30, 2008 at 3:50 am

The maintenance of a government apparatus of courts, police officers, prisons, and of armed forces requires considerable expenditure. To levy taxes for these purposes is fully compatible with the freedom the individual enjoys in a free market economy. To assert this does not, of course, amount to a justification of the confiscatory and discriminatory taxation methods practiced today by the self-styled progressive governments.

–Ludwig von Mises

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