Taxes as Evidence of Ownership?

The late UCLA economist and eminent property rights theorist Armen Alchian wrote,

A property right is the exclusive authority to determine how a resource is used, whether that resource is owned by government or by individuals.

Private property rights have two other attributes in addition to determining the use of a resource. One is the exclusive right to the services of the resource….

[The other is] the right to delegate, rent, or sell any portion of the rights by exchange or gift at whatever price the owner determines.

A couple of times in the last year, or so, I’ve heard the assertion that the government’s ability to tax an individual’s land is an implicit admission that the individual doesn’t actually own the land. Most recently, this argument was advanced to me in defense of eminent domain and immigration restrictions.

Now, I despise taxation, even to fund functions of government that I would argue are necessary. I think of it as being roughly analogous to chemotherapy: it serves an important purpose (killing cancer cells), but it can also represent a positive danger to one’s health and well-being (potential for physical and emotional side-effects that last long after treatment ends). We utilize chemotherapy with great care in treating a limited range of specific diseases; it’s not a multivitamin to be taken for vitality, prevention, or supplementation.

So, taxation is a necessary evil. It is not charitable, patriotic, or morally or economically desirable. It’s not good. Though I would never defend it for any but the most crucial functions of government (and then only hesitatingly), I wouldn’t be rid of taxation entirely.

But (returning to the argument at hand) I just don’t see taxation as implying ultimate ownership. I’ve been thinking about the underlying logic, and I think I’ve developed a reasonable protest: the logical conclusion of this argument is that citizens are the slaves of their respective governments.

Perhaps that seems hyperbolic, but consider: if the power to tax an individual’s land implies that the government–rather than the individual–owns that land, it follows that this relationship must extend to any taxation of any activity.

This applies, with equal rhetorical force, to income. Since income is merely the fruit of one’s time and productive activity, taxing this fruit is no different from taxing its seeds.

If the government’s power to tax income implies that, ultimately, all income belongs to the government, we are left to conclude that, by the same token, the government owns the time and productive activity of everyone whose income it taxes.

Because, as Alchian notes, ownership entails exclusive authority over a resource’s use, exclusive rights to its services, and exclusive power to delegate, sell, or rent it to a willing party in part or en totale, it follows that the government can appropriate an individual’s time and productive activity at any time and for any reason.

In other words, the government owns each and every person whom it has power to tax. Outside of the African smugglers behind the highly lucrative, historically productive slave trade of the twenty-first century, the veracity of this conclusion would be horrifying to every human being.

I’m under no illusions that those advancing the taxation-as-implicit-ownership argument favor modern slavery. In fact, I’m certain that they view slavery as being as morally repugnant as I do. However, I’m also certain that they would not want to defend Social Security taxes on the basis of their own subjugation, or the subjugation of others. Whatever the merits of a particular government function, defending its funding on these grounds is either a non-starter, or an argument for the total abolition of the state*.

In summation**, I’ll conclude with a quote I love by a man I admire:

Most people agree that slavery is immoral. But what makes it so? Slavery denies a person the right to use his property (body) and the fruits of his labor the way he sees fit. Slavery forcibly uses one person to serve the purposes of another.

Walter E. Williams

*There are those who would advance this argument for precisely this reason, but those favoring tax-funded government programs are clearly not political anarchists.

**Funny story: after having reasoned all of this out myself, I came across this quote and realized that, 1) I was aware of it and had probably drawn on it unconsciously for inspiration, and 2) Dr. Williams, with decades of experience under his belt, is a much better conveyor of ideas than I am (yet).