Mercier, a French physiocrat, stated (to Catherine the Great) that: “[t]he science of government… is to study and recognize the ‘laws which God has so evidently engraven in the very organization of man, when He gave him existence,’” and “‘[t]o seek to go beyond this would be a great misfortune and a destructive undertaking.’” Of course, the physiocrats’ arguments didn’t require God’s existence for the existence of natural law. But speaking with monarchs of the time, not invoking God would have been nonsense.
To summarize the physiocratic position (which arose from the work of Locke and others): natural law, like (say) the law of gravity, is already really existing in the world. Our job, as theorists, is to discover those laws. Discovery occurs by experimentation. If a ruler makes a law that is in concert with natural law, harmony will obtain. If a ruler makes a law that is in discordance with natural law, disharmony or chaos will obtain.
According to the natural law position, humans exist for themselves, not for others. That one exists means that one owns one’s self. In other words, property rights begin with one’s own body. This extends to the principle of non-aggression: that no person may rightfully use force against another person “except where the individual coerced has aggressed upon the sovereignty of another unaggressive individual.”
Self-ownership is the basis of property ownership that extends beyond the self. A person owns land, for example, by being the first person to mix her labor with the land – tilling the soil, cutting down trees, building a house, etc. Once first ownership has been established, it can be abandoned or passed down or sold, but any attempt to remove the land from the owner without the owner’s consent is an act of violence. This ownership extends to all the fruits of one’s labor. For example, if I hire you to harvest my apples and agree to pay you in room and board for the duration of the harvest, no one may rightfully force you out of the room, or prevent you from eating (assuming you do harvest the apples and don’t steal any.)
How does this all relate to taxation? Well, a tax is a charge against a person’s property or activity for the support of government. It is enforced through the coercive power of the government. If you think this latter statement is incorrect, try not paying your taxes for a while. Actually, if you work for a business, you can’t really avoid paying taxes unless the business owner goes along with it; although you can try to avoid annual reconciliation. Fines will be assessed first, and if you ignore that, criminal prosecution is possible.
Therefore, a tax is the forcible removal of the fruits of one’s labor, and it is backed by the coercive force of the government. By the natural law position stated above, this is morally wrong. Furthermore, taxation is a (but not the only) cause of discord in a society.
As I see only one argument in response that would not require a refutation of the natural law position, for all other arguments in favor of taxation must refute the natural law position, I will take up that argument now. The argument is that taxation is voluntary. In other words, continued residence in a territory that levies taxes is implicit consent to be taxes. I have two responses to this argument (which is of the “if you don’t like it, leave” variety).
First, if one looks at inter-state migration patterns in the U.S., there is evidence that people move from high-tax states to low-tax states. So, in fact, people do vote “with their feet.” But note there are high switching costs. If you are an advertising copywriter living and working in New York City, the ability to switch to a similar job in one of the no-tax states, like Florida or Texas, is likely to be limited by job opportunities and personal tastes. Other jobs are similar in the sense that they are only available in certain areas. Working in one’s field often is a benefit high enough to overcome differences in state taxes. Nevertheless, paying a state tax comes closer to a voluntary tax than a national tax because of the open migration.
This leads to my second response, that of exiting the national tax scene. There are significant barriers to this. First, one must locate a new country in which to live. That country may have barriers to entry. Second, the costs, especially emotional, of leaving family and friends can be very high. Third, in the case of the U.S., expatriates are taxes by the U.S. government on their world income. So, you can live and work in Hong Kong, but if you are a U.S. citizen, you pay federal income tax to the U.S.
I have made the case, based on natural law, that taxation is a violation of property rights. I have attempted to refute the “voluntary tax” argument by illustrating the very real barriers to avoiding taxes and by pointing out that people do avoid taxation when possible. I have not attempted to refute any “moral obligation to others” argument in favor of taxation since I see that as an argument in favor of charity, which I support, and not taxation.
I will close by offering a solution. Rather than having a overarching federal government that taxes, government should be small and local, like counties. County governments could levy taxes and as long as people were free to migrate among the counties those taxes would not be coercive since paying the taxes would be voluntary.
