"Taxation is theft." Most people know this trope of libertarianism to be nothing more than a meme. After all, taxation cannot be theft if it is enshrined in the law and the U.S. Constitution by the Sixteenth Amendment. More precisely, a government has a valid claim on productivity and commerce within its borders because the law, order, and security provided by government create the environment that makes such activities possible. Furthermore, a government cannot operate without capital, and thus it must raise funds by collecting on these claims.
So broadly speaking, taxation is not theft. However, the government is obligated to use tax revenue in a manner consistent with the principles and limitations which define its powers. A failure to do so undermines the justification above and the morality of collecting taxes. Does the system of American taxation live up to this standard?
Our government's principles and limitations are enshrined in The United States Constitution. The critique of the federal government that follows concerns itself greatly with the principle of federalism. Under a federalist system, the government is composed of several tiers. The federal government has jurisdiction over the entirety of the United States but has a narrow scope. The state and local tiers of government only have jurisdiction over a geographic region of the union, but they have more broad authority. The intention is for voters to have a larger voice in how they are governed. If the bulk of the legal code is determined by the respective governments of the regions where they reside, each of their votes makes up a larger share of the total, and thus they have a more significant say in the rules they must live by. The scope of the federal government is defined in Section 8 of Article I. Sections 9 and 10 define the limitations of the federal and state governments, respectively, but they are not comprehensive. To clarify how powers should be divided between the tiers of government, the Tenth Amendment was included in the Bill of Rights:
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
However, the federal government has sought to circumvent this stringent limitation of its authority by mandating that lower tiers of government implement regulations established by the federal bureaucracy as a condition of receiving federal funding. In essence, the federal government will withhold funds from states that refuse to implement policies that the federal government does not have the power to enshrine in law directly.
The true theft is not that taxpayers are robbed of their money, but that voters are robbed of their power.
There have been numerable examples in the past few years. In May, the Biden administration announced that schools must allow transgender students to use male or female bathrooms and play sports with either sex in accordance with the adminsitration's interpretation of Title IX or be disqualified from participating the the National School Lunch Program, which provides free lunch to low-income students. In 2021, the federal government mandated that all healthcare workers be vaccinated for COVID-19 as a condition of receiving funds for Medicare and Medicaid. President Trump directed federal agencies to restrict funding to cities that "defund" their police departments or are deemed as "anarchist jurisdictions" by the Justice Department in 2020.
Although not all mandates impose bad policies, they violate the principle of federalism and the Constitution's limitations on the federal government. By shifting authority from the local governments to the federal government, voters are defrauded of their power to self-govern and protection from potentially unfriendly policies that are unpopular in the voters' regions of residence. This practice is a threat to voters across the political spectrum. Policies spanning from gun control to restrictions on abortion can be imposed nationwide in this manner.
When we pay taxes to the federal government, we are providing it with leverage to coerce lower levels of government and extort them for authority.
The use of tax dollars to make threats toward regional governments and deprive voters of their constitutionally protected rights is immoral and unjust. Article V of the Constitution provides a democratic means for expanding the federal government's power through Constitutional Amendments. With the federal government's efforts to bypass the democratic system in mind, let us consider once more whether taxation is theft. The extent to which the government has a claim to the productivity of individuals and from the land it governs is non-quantifiable and must be determined through democratic means. Provided that the taxpayers are appropriately represented in the government, taxation itself can be regarded as consensual and just. The practice of using tax dollars to deprive voters of their power opens the door for a strong moral critique of taxation. This is not the singular way that the government uses tax dollars immorally. Many criticisms could be made – just not the accusation that taxation is theft. //
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