Is Taxation Actually Theft?

There are arguments abound that taxation is theft, and thus wrong. There are tea-parties gathering and protesting taxation. The general ideology is that their hard-earned money is being taken and used without their permission and that they could do a lot more if they were allowed to keep that money in their piggy banks instead.

I decided to investigate this claim. While I do agree that taking taxes with the threat of legal action is wrong, and while I do agree that tax dollars can and are used for things the tax-payers disagree with (mainly military and TARP styled funds) do I actually believe that taxation, in and of itself is coercive theft? No, I don't. Generally speaking I believe that even if we were living in Anarchist communities, without governments, and even without capitalism, the people in the communities would still have to pool their resources in order to maintain a particular standard of living to be enjoyed by all. If we were to keep all of our resources only to ourselves we could not afford to do all of the things we need to do. So even in Anarchist communities - we would have a "tax" system, which is merely the use of pooled resources to benefit the entire community.

But I wanted some hard numbers to back up my theory. So I looked up, to the best of my ability, the average per person, per household, per KM and per acre cost for the most basic community benefits we use nearly everyday. Things like roads, sewage, waste collection, fire protection, and yes even police protection. Legal services, public schools, parks, and libraries. I excluded things like public transportation (buses, subways) and other tax funded things like government aid programs, military, overhead costs and local, state, and federal employees. I also excluded the post office - a system we all use everyday.

I then averaged the cost of these basic services, and compared it to the national average cost of taxes per person or household. I excluded the cost of gas taxes and sales taxes since many states do not have these taxes and/or the cost depends entirely on the user. Keeping in mind that my numbers are averages as they cost, per person or household, in a not-for-profit industry, That means that in order to keep things running everyone would still have to pay in, but paying in directly rather than through gathered taxation, and, to for profit companies rather than lower cost not for profit companies. Here is what I found:

On average:
Waste Disposal, including sewage and garbage pickup, and bulk disposal: $102 per household per year.
Public Schooling: $5,000 per year per student. Keeping in mind that private schools often charge upwards of $8,000 per year in tuition.
Fire Departments: $778 per household per year, data from larger cities.
Road Maintenance: $3,592 per KM, or 0.62 miles. So your neighborhood roads? very expensive, never mind the highways.
Legal Assistance: $3,000 retainer for 20 hours worth of work, based on a $300 per hour attorney rate.
Police protection: $584 per household per year. Granted, most people don't like the police, but I couldn't find an average price for a private security company. I'm assuming their rates are much higher.
Public Library: $41 per year per person, plus whatever fees they levy on you when you sign up.
Public Park/space Maintenance: $13,235 per acre per year. Even if you don't have large parks, there are many public spaces that need maintaining, and that adds up.

Total cost per household, on average, per year for basic access and use of public facilities: $26,332

Now, the average household income in the U.S. is $40,000 per year. The average federal tax is 18%. The average state income tax is 5%. The average property (real estate) tax is $2,000. At $40,000 per year your annual taxes are : $11,200. If you want to add on other property, sales, and gas taxes you'll have to take a guess as to how much that is. For us, it's about $500 per year, but we don't drive or buy much. All total you're looking at $11,700 in annual taxes.

Or rather, if you were paying out of pocket individually you'd be overpaying by approximately $14,632 every year.

How is this so, you ask? Well, with the negotiation power of collective bargaining, plus other non tax funds for all of these programs (such as private donations, fundraisers, and borrowing) you get everything you get everyday for $11,700 per year instead of a much costlier $26,332. And that's at not-for-profit rates.

I can't speak for anyone else here, but there have been years when my husband and I have only made $25,000 in a year. Even of we made $30,000 we'd only have a few thousand dollars left over to purchase shelter, food, and clothing.

With 91 million Americans living at, below, or just above the poverty threshold of $17,000 per year do you think that they could afford anything beyond waste management and shelter on this privatized system? No. No education, no legal, fire, or police protection, no medical aid (since 80 million of them are on Medicaid) and no access to roads, parks, or public spaces because if they can't contribute, they can't use it.

Looking at the costs, I'd rather just pay the damn taxes. Economically it's more logical.

But back to the question at hand: Is taxation theft? Since you get to use everything at your disposal for less then what it should actually cost per person, I'd say no, taxation is not theft. You might be a little bit of a thieve, though, if you consider using something you can't afford to pay for in full theft. For me personally, I don't consider that theft either, but rather a proper use of collective bargaining for the benefit of all people.


eugene said...

Hey Anok,,, what a post this is. you just reminded me of the book "freakanomics" hahahah

FSK said...

Your calculation is wrong. It is wrong to simply add up those numbers.

20 hours of legal advice per person per year? Who actually does that?

$13k per person for maintaining public lands? Where's my personal acre?

$3500 for roads? I have to maintain one km of roads by myself?

I did this calculation myself correctly, and all "services" currently provided by government could be done at a cost of 2% of my income or less. Plus, a free market would have even greater efficiencies.

"Taxation is theft!" is true. "Taxation is theft!" is gaining rapid popularity not because of fruitcakes stupid enough to believe it. It's gaining popularity because it's actually true and very important.

Anok said...

FSK if you total up all of the acres of public parks and lands, and total up all of the KM of public roads and split them evenly among the households of the country then each household would essentially have to pay for one acre, and one KM each.

The lawyer's fees is a retainer fee. Without public attorneys funded by tax dollars, you'd have to keep a lawyer on retainer in the event that you need a lawyer. (because getting one on the fly in a country with no publicly accessible legal system would be damn hard). Retainers are generally 50% of their estimated costs, and on average a lawyer costs $300 per hour.

Don't forget that I did not include any other tax funded programs or public usage programs in my calculations, or count in the "for profit" mark-up of privatized services, making the bill even higher.

I just did the basics.

My numbers are correct, no matter how badly you'd like them not to be.

Dave Dubya said...

Taxation is theft to the greedy and rich. They seem to whine the most about it. The price to pay in a civilized society is in our Constitution. Article 1, section 8.

"Section 8
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and
Excises, to pay the Debts and provide for the common Defence and general
Welfare of the United States; but all Duties, Imposts and Excises shall be
uniform throughout the United States;"

Why do the rich and greedy hate our Constitution? Or do they just worship money over shared prosperity?

Anok said...

Oh-ho-ho Dave! Ouch, but yes I agree.

Anonymous said...

I love your blog, but your math is completely misguided. You are asserting that taxation is OK, because you're paying $12,000 a year into the pot for taxes, but getting roughly $28,000 a year in benefits. What you forgot is that the balance of your "share" is paid by other people... other tax payers. We don't have a flat tax rate in America. People elsewhere are paying almost 3 times as much in taxes to the pot, but getting only the same benefits you are (the previously mentioned $28,000 worth of benefits). Taxation is theft.

Anonymous said...

Hi Anok. Yes I have something to say.
a- Numbers do not matter. Theft is illegal.
b- Everything is voluntary in an anarchist community, that's what makes it anarchist.
c- Taxation is not a voluntary institution.
d- There cannot be tax in an anarchist community.
e- Taxation is theft.
f- Taxation is illegal.

Michelle said...

Brilliant. Simply brilliant. And to the detractors, if you don't like taxation for the greater good, move to Somali. It'll be your land of bread and honey.

he who scoffs at danger said...

"So even in Anarchist communities - we would have a "tax" system,..."


listen, consider me the ghost of political identities of the future: you are not an anarchist, and that's just as well, because there's no such thing as anarchism. by the time you graduate college (i'm assuming you're an undergrad from the "nickel and dimed" review) you'll be an ordinary, democrat-voting progressive.

the argument you're making is not the counter-argument to the radical ethical assertion that taxation is theft. it isn't even an argument about taxation necessarily, but about the relative size and scope of government benefits. it's a standard progressive argument: "you conservatives can eat that burger without growing six tits because WE created the fda which YOU want to shut down!"

in other words, the claims you pursue in this post already presupposes government. i'm afraid the tea partiers are the authentic radicals in this claim. if there is such a thing as "anarchism", it would be the rothbardians and not the "me too!" crypto-marxists of the black block, ruckus society, food not bombs, ara, anti-flag, green day variety. sorry. "leftwing" anarchism is an affectation adopted by middleclass whitekids seeking safe, rule-based pseudo-violence with cops as a means to politicize their hormonally predetermined alienation from mom and dad. they grow out of it. those who don't are to be pitied.

as it happens, there is nothing of sustainable truth-value in rightwing anarchism either. though i think rothbardian economists would make easy hash of your figures there. time and time again it is proven that private systems operate at lower distributed costs than public ones. nasa, for instance, is contracting LOW ORBIT SPACE FLIGHT to virgin galactic, for instance. not because of some shady crony capitalism, but because virgin's space flight program operates at a fiftieth of the cost with almost zero errors while nasa keeps sending up $500 bil space shuttles only to watch them blow up before they pierce the stratosphere. there is no essential reason the state should be obligated to provide waste disposal, fire departments, road maintenence, public libraries, parks, or any of those things. don't get me wrong; i enjoy having those things as a public commons, and there are many benefits to having these things maintained by the state. but efficiency and cost arguments for privatizing each of these to one extent or another are available.

the fact is that taxation is theft, if you want to pursue the term "theft" to it's furthest abstraction. if you want to speak of the real world, you have to consider that the subject isn't "theft" but taxation, which is a social mechanism of a like priority with justice.

leaving radical abstraction behind and entering a rational interrogation of society armed with the rational presumption that there is no 100% pure truth out there somewhere, and that truth is something approximated from competing claims, you can recognize how useless a statement like "taxation is theft" is.

sometimes taxation is too little. often taxation is too much. there are alternative revenue systems which make taxation more just and rational than others. but some taxation is necessary to facilitate an orderly freedom.

that's all there is to it.

he who scoffs at danger said...

dave: "Why do the rich and greedy hate our Constitution? Or do they just worship money over shared prosperity?"

95% of u.s. citizens share the prosperity derived from the 5%'s "greed".

remember to thank them next time you walk into an establishment your employer built and walk out with a paycheck, having risked absolutely nothing and assumed absolutely zero liability.