Taxation Is Theft/Property Is Theft

Is Taxation Actually Tantamount to Robbery?

Photo by Greg Rosenke on Unsplash

It is commonly held by right-libertarians that taxation is theft. In his book Why? The Purpose of the Universe, Philip Goff makes an interesting argument to the contrary. Goff asks whether taxation ought to be morally or legally considered theft. He ultimately concludes that right-libertarians are, in fact, incorrect in their assertion that taxation is theft.

The argument begins by distinguishing between legal and moral definitions of theft. While taxation is clearly legal, the moral argument hinges on whether individuals have a rightful moral claim to their gross (pre-tax) income.

“In addressing the question of whether taxation is theft, it is important to distinguish two senses of ‘theft’: legal and moral. In 18th-century North America, it was possible to ‘own’ a slave, in the legal sense of ownership. If someone deprived me of my slave in order to give that slave liberty, then this constituted ‘theft’ in the legal sense. But, of course, the laws underpinning slavery were morally abhorrent, and hence few these days would class liberating a slave as ‘theft’ in any moral sense. Conversely, we can have cases of moral theft that are not legal theft. The laws of Nazi Germany enabled the authorities to seize the property of Jews who had been deported; although strictly speaking legal, such actions constituted ‘theft’ in a moral sense.”(Philip Goff, Why? The Purpose of the Universe)

The core question becomes: Do we deserve all our income, or are we merely entitled to it under specific social arrangements? Goff challenges the popular belief that we morally deserve our entire income by highlighting the disconnect between market rewards and actual social contribution — why does a hedge fund manager earn vastly more than a scientist seeking a cancer cure?

To answer whether taxation violates rights, Goff delves into three major philosophical views of property rights:

1. Right-libertarians argue that natural property rights exist and that taxation infringes upon them — hence, it’s theft. But this only holds in a purely theoretical society with no state interference, which does not reflect reality.
2. Left-libertarians agree with natural property rights but insist everyone has equal claim to natural resources. Thus, taxation can be morally justified to ensure fair distribution.
3. Social constructivists see property rights as legal fictions — tools society creates to serve human interests. From this view, taxation is a means of structuring society rather than theft.

Ultimately, Goff concludes that even the most radical libertarian philosophies fail to justify the claim that people have a special moral right to their gross income. The belief that our payslip reflects “our money” is an illusion shaped by flawed assumptions about desert and entitlement. A just society requires a tax system that serves everyone, not just the wealthy few.

Furthermore, Goff contends that right-libertarian claims about moral entitlement to pre-tax income only hold in a purely theoretical society with no government involvement — a condition that doesn’t match the real world.

“The point can be made clearer with some examples. Consider a hypothetical Professor Schmidt, a right-libertarian academic working in a German university, who is very annoyed about the state taking 42 per cent of her income, Where did her salary come from? Well German universities are publicly funded, and so Schmnid’s salary comes from general taxation, from the money the German state forcibly extracted from its citizens. But according to right-libertarianism, this is an immoral state action that infringes the natural rights of its citizens; in effect, it steals from people to pay Professor Schmidt. It follows that Professor Schmidthas no right to her salary, and hence no right to complain that the state lets her have only 58 per cent of this stolen money.
“Perhaps some radical libertarians will gleefully agree with me that professors who leech off the state have no right to resent taxation. But the point applies quite generally, although in a more subtle way. Now consider a hypothetical Ms Jones, a libertarian British businesswoman who resents paying tax on dividends from her lucrative company. Although she is not directly paid by the state, the profits generated by Joness business are dependent on many things that are funded by the state: perhaps she receives state subsidies, but even if not, certainly the success of her company will depend on infrastructure, roads, rule of law, and an educated and healthy workforce. It doesn’t matter whether in principle these things could have been provided privately: in reality, they are provided by the state and funded through taxation. According to right-libertarianism, these things were paid for by theft, and hence Jones has no right to the profts thus generated.
“In theory, right-libertarianism does entail that people have a moral claim on their pre-tax income, and hence that taxation is theft, but only in purely hypothetical societies where there is zero or minimal state interference in the economy. In states in which the government intervenes in the economy through taxation — i.e. in almost every developed state — market transactions are tainted and so are morally void. The right-libertarian is perfectly entitled to campaign for the day when her minimal-government Utopia is brought about, but until that day she cannot consistently argue that she has a right to her pre-tax income, and hence cannot consistently complain that the government is taking what is hers by right.”(Philip Goff, Why? The Purpose of the Universe)

Goff also alludes to Pierre-Joseph Proudhon and his idea that “property is theft.” Proudhon held that the institution of property is an artificial institution whereby the state confers certain privileges upon an “owner.” If I own a piece of land, I am allowed the privilege of renting it out and enjoying the privilege of deriving income from that land. However, the rental value of land is largely the product of society rather than of individual effort. Public roads, utilities, grocery stores, and schools — all contributed by society rather than the individual homeowner — increase the rental value of my property. By granting me the privilege of appropriating some of the value generated by society, the state is legally allowing me to commit moral theft. Because the institution of property involves theft — making the property owner a beneficiary of that theft — it logically follows that the owner has no grounds to object when the state reclaims a portion of that stolen value through taxation. Therefore, taxation is not theft. (Expanding on Proudhon’s ideas, Henry George proposed that the ideal tax would target the unimproved value of land — that is, it would reclaim the unearned income landowners receive due to society’s contribution to land value.)