That form of coercion or interference with the Free Market in which the State collects tribute (the tax), allowing it to hire armed forces to practice coercion in defense of privilege, and also to engage in such wars, adventures, experiments, "reforms," etc., as it pleases not at its own cost, but at the cost of "its" subjects.
[celine]
In a barter economy, government officials can only expropriate resources in one way: by seizing goods in kind. In a monetary economy they will find it easier to seize monetary assets, and then use the money to acquire goods and services for government, or else pay the money as susidies to favored groups. Such sezure is called taxation.
Murray N. Rothbard,
What Has Government Done to Our Money?
[rothbard]
At first, of course, it is startling for someone to consider taxation as robbery, and therefore government as a band of robbers. But anyone who persists in thinking of taxation as in some sense a "voluntary" payment can see what happens if he chooses not to pay. The great economist Joseph Schumpeter, himself by no means a libertarian, wrote that "the state has been living on a revenue which was being produced in the private sphere for private purposes and had to be deflected from these purposes by political force. 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 A Schumpeter, Capitalism, Socialism, and Democracy (New York Harper & Bros , 1942), pp 198 and 1980]
The eminent Viennese "legal positivist" Hans Kelsen attempted, in his treatise, The General Theory of Law and the State, to establish a political theory and justification of the State, on a strictly "scientific" and value-free basis. What happened is that early in the book, he came to the crucial sticking-point, the pons asinorum of political philosophy: What distinguishes the edicts of the State from the commands of a bandit gang? Kelsen's answer was simply to say that the decrees of the State are "valid," and to proceed happily from there, without bothering to define or explain this concept of "validity." Indeed, it would be a useful exercise for nonlibertarians to ponder this question: How can you define taxation in a way which makes it different from robbery?
Murray Rothbard,
The Libertarian Manifesto
[rothbard]
Taxation transfers resources from the private sector, where they are used in accordance with individual preferences, to the government, where they are used in accordance with political preferences. A good text will make this point clear, and proceed to discuss three important issues in the economics of taxation.
The incidence of taxation. Taxes are frequently levied on an entity that will not bear the ultimate burden of the taxes. "Who really pays this tax?" is an important question, one that also helps the student to "think like an economist."
Tax incentives and disincentives. Taxes alter the payoff for taking or not taking certain actions. Many times taxation can make activities that are profitable -- and beneficial -- no longer profitable. The student should learn to consider the long-term impact of tax changes after individuals and businesses have adjusted to them.
The cost of taxation. Taxes do not collect themselves. And tax avoidance costs billions of dollars each year. Economic texts should explain to students that the economic resources devoted to tax collection -- as well as those devoted to tax avoidance -- are substantial, and not available for other purposes.
How Reliable Are Michigan High School Economics Textbooks?
[mackinac]