Is there a moral basis for taxation?

If yes, state why.

If no, then answer this question:

Are you an anarchist?

If you are not, then state how government shall be funded.

If yes, then state the moral basis for anarchy.

Add additional commentary and debate, if you desire to.

 

You are beating a horse that died a few thousand years ago.

 

Tell that to the trump wing.

 

I believe in reincarnation

 

A more interesting question to me would be: Can we replace taxation in the modern age, given the advent of central banking and automation of labor? Can we fundamentally transform our economic system to avoid having people slave for a monetary wage and pay taxes to the government to support it?

 

Post of the day!!

 

Yes, and no.

Sure, we could do a basic income, automatic welfare for anyone that needs it.

But the amount of income would have to be low enough to discourage people that had an interest in the good life from staying there.

So, sure, but not for you...

 

I might be over-analyzing this, but here goes anyway.

First off, morality is subjective insofar as government is concerned, and should have no bearing in policy. So I think that technically puts me in the 'no' camp.

I do believe there is an ethical obligation to preserve a minimum degree of order that allows a society/economy to function, which requires laws, which requires enforcement, which probably requires some sort of collection of resources from the public (aka taxation). Which I think effectively would put me in the 'yes' camp, except I also believe that this necessary collection of resources could be accomplished via voluntarily participation in taxation. For example, taxation on imported and/or luxury goods, as Thomas Jefferson is on record supporting, is a voluntary form of taxation that places the burden of supporting the services necessary for society to function entirely on those who choose to consume more than they need to survive (assuming, of course, a reasonable legal distinction between luxury goods and essential goods, and the local availability of said essential goods).

With todays common understanding (afaik) of taxation necessarily requiring compulsed participation, I think this puts me back into the 'no' category, because I don't think the compulsed participation is necessary. If however we were to make an honest effort to try to tax on a more voluntary basis (by taxing certain goods like, for example, those goods that perhaps everyone wants but no one actually needs, like TV's and softdrinks), I would agree that such taxes are necessary to support a minimum degree of order in society and thus are ethically obligatory. This would likely require quite a bit of scaling back on the size and influence of government, something I support doing regardless of how we pay for its function.

So... which category does that put me in?

 

History proves that automation doesn't replace labor, it only displaces it, but jobs grow as the population grows, despite automation, so that's not really a factor in the equation.

Central banking merely gives the government the ability to create fiat currency, which ultimately causes inflation, which, in effect, is taxation without representation, and, more specifically, affects the poor as they are less likely and less able to hedge than the rich. So, that's an issue that needs addressing but it's separate issue.

Well, let's think of your last suggestion in it's practical application. You seem to be suggesting that the government's funding should be voluntary, and operate like a business competing for approval such that people would volunteer donations to fund it? Is that what you are suggesting?

 

I don't buy that argument because you only 'need' food and water to survive, everything else, in the purist sense, is a luxury.

But is that a fair proclamation? We don't need clothes but as a practical matter, not having them is not an option, and on and on we go.

You seem to be suggesting that the only legit tax are consumption taxes, using the logic that since consumption is voluntary, therefore the tax on consumption is also voluntary.

Not really, since you are forced to pay a tax on consumption. And some items of consumption are not voluntary, such, as in California, for all intents and purposes, not owning a car is not an option for most folks who commute typically 30 miles to work. the logic here is essentially the same for clothing. We don't 'technically' "need" them, but not having them is not an option for most folks.

So, I'd put you in the yes category, assuming you are supporting a tax on consumption only. From where sit, both taxes, income, or consumption, for all intents and purposes, are involuntary, they are only different methods of taxation.

 

I'm not hard set on what is or isn't a luxury. In general terms, I would like to make it so the bottom 10-20% or so of spenders could with relative ease be doing so tax-free. Those who are wealthier could in theory avoid taxation by living austerely on top of their pile of cash. But I don't think a meaningful amount of people are going to do that...

Given that clarification, am I still a 'yes'?

 

How is inflation taxation? Unless you're holding cash and not earning enough interest on it to outpace inflation, I don't see how it could conceivably be thought of as a tax.

On the question of government funding, I'm just thinking there may be an alternative to taking money from the economy in the form of taxes when the government can and does print and digitally create money anyway. I think taxation made more sense when money was gold, silver, copper and other tangible things. I'm thinking that fiat currency and the central bank model allows us to abolish taxation as a means of funding the government (eliminating the "middle man" of taxation, essentially).

My thoughts about automation are that it's helping to transform the nature of the economy. Labor is increasingly removed from menial labor and more people are free to pursue other forms of work that machines can't handle and which aren't all necessarily as essential as menial tasks are. We have a lot of artists and entertainers because we don't need everyone working the fields or working in factories to produce things. Modern technology is making work in the traditional sense less important and less necessary for human beings to perform. I guess it's less relevant to the question of taxation and funding government, but I'm thinking of overall fundamental changes that are occurring and that we can institute to reform how we get things done and ensure that everybody has their needs covered and access to luxuries. We might even be able to realize the Star Trek future and eliminate money as we know it at some point thanks to automation providing for our basic needs to the point where we can get those things done without paying people in a currency, which they then spend on things. At some point, we could have all the food and manufactured goods we need and want with little human effort involved, and at that point, who even needs money? We can just have what is produced by automated means and pursue what we want to pursue, and do the kinds of work that we want to do rather than the work that previously needed to be done no matter how little people wanted to do it (and had to be coaxed into it with money in a situation where money was necessary in order to have a home and provide for other basic needs).

 

Inflation could only be a tax if someone was able to both benefit from taxation and have a meaningful degree of influence over the rates and cycles of inflation.

Which I'm certain some do.

 

It seems you're missing my point. Inflation doesn't take anything from me because I don't hold onto cash long enough for it to lose value (e.g. storing it under the mattress for years). No one is losing wealth to inflation.

 

No.

No.

By donations - time, money, effort - from those who seek its services.

 

Well, if you follow MMT then you can see that taxation is not necessary for the government to spend FIAT money. Taxation in this environment serves other purposes which IMHO are morally valid and good reasons to have taxation. One would be income shaving to prevent giant fortunes to exist threatening our very system of governance and intergenerational wealth beyond belief. Another reason would be to encourage certain behaviors, discourage other behaviors. Lastly, state and local governments have no other option beside taxation so they will never go away. But what you bring up is going to dominate economic thought as we eliminate high paying jobs through automation and AI. Its a fascinating topic.

 

I also found myself thinking of taxation as essentially a money sink, a way to remove wealth from the economy at large and limit the total amount and prevent inflation. I guess we could look at it as a tool in the government toolbox for regulating the money supply.

Of course, it could be handled differently as well. If that's the goal, we could have a national sales tax instead of a personal income tax, for instance.

Regarding state and local governments, a system might be set up for a fiat funding scheme to apply to them as well, I'd imagine. If the federal government could be funded that way, then why not the state and local governments as well? If there is an argument against it, it's in the principle of state and local autonomy and not depending on the feds like that.

 

I need to know how you propose to fund the government, assuming you believe a government has the moral right to exist and to govern.

By 'moral' I mean 'for the greater good' and/or 'what is just'.

 

It is, indirectly, a tax on those who are less able to hedge, which is the poor, more than the rich, who are much more able to hedge.

But, how is that a 'tax'? In effect, it is. But, I'm going to cover all bases so let's go on a little journey. To understand the above we have to give inflation a real workout, because I sense a number of objections to the premise, so I have to cover those bases, to save a lot of going back and forth on this point.

Let's agree on one point, because if you don't agree or accept the following premise, it won't make sense.

The first principle is that you can't create wealth out of thin air, somebody, at some point in the chain, has to labor to produce something which others value enough to want to trade their labor ( stored value, cash, products, etc ) for. It might seem like it in some circumstances, but, as we shall see, it's jut an illusion.

The simplest economy is a man on an island. If he needs something, say, some coconuts to eat, he has to climb a tree to pick them. He has to crack them open to eat them. That's a simple economic transaction, and the transaction is merely to himself, to nature, He produces something to get something.

Or, if you need two to tango for your definition. Person A has a collection of coconuts, and he wants some arrows for his bow. Person B has some arrows he's made and he needs coconuts to eat, so each has something the other needs and then barter.

the point is, in order to get something, you have to produce something. To get, you must labor.

Now, as the economy gets more complex, it may seem that Joe, who has an investment fund, is not laboring for his 5% annual yield, and that may be true, but that wealth didn't come out of thin air, at some point down the chain, someone produced something, someone labored, and Joe investor tricked the economy to provide him with value without having to work for it. But, he did, come to think of it, right? He worked for the money he invested in the fund, and placed it somewhere where others could use the money to grow their business, so, in a since, his 'labor' is the providing of cash to business ( a service) and his 'payment for service rendered' is the yield.

The point is, and as difficult as this may seem to understand, in the most ultimate sense of the thing, the best way to look at 'money' is not the traditional definition of it, i.e., a receipt representing things of value to ease the trading of things, that's how it is on the surface, but it is better, in my view, to think money, for the purposes of making policy, to look at money as it truly is in the ultimate sense, which is as labor, i.e., money is basically labor, or the stored value of labor, more simply put, money is labor, because without labor, money would have no value. Labor is the first thing in these sequence of the chain of events that must occur for any value to be traded. Someone has to produce something, somewhere, for us at the top of the chain of sequence of events in the economy or we will have nothing to work with. I know, there are shades of grey, but, in ultimate terms, as we work backwards in the chain of productivity events, labor must occur. When we are dealing with something abstract, the way to get the essence of the thing is to do a 'but for'. What is the 'but for', here, to determine whether or not money is, or is not, labor? I know a lot of people will sa it is a lot of things but labor, so let's do a 'but for'. It's lliek this, We have a lot of things in our homes. But, one may argue money is not labor because we don't always have to labor in order to get it. Maybe so, BUT SOMEONE DOES. You may be the one benefiting, but someone had to labor somewhere for you to get a benefit. Wealth isn't produce out of thin air. "There is no free lunch' and that's a true statement.

Now, why am I going through all of this explain why 'inflation is taxation'? because the flip side of the above is, if you counterfeit money, and you do a perfect job of it where it is undetectable, say you print up a 100,000 bucks, and spend it in the local economy, you have received $100,000 worth of goods and services without having to work for it ( no, printing it is not the 'labor' necessary for the value ). At first glance, it seems like we created value out of thin air.

but, to grasp that we haven't, we need to do it on a larger scale so that it's actual effect becomes understood.

Fiat currency creates inflation. now, sometimes it doesn't, but it will, eventually, sometimes the currency gets parked somewhere where it doesn't reach the economy right away, off shore perhaps, sitting in banks, perhaps, but as fiat currency is spent, inflation results if it is injected into the economy faster than GDP can absorb it, we wind up with too much money chasing too few goods.

Rising prices, in and of itself, is not necessarily inflation. Prices go up and down all the time, because of supply and demand. It's the rising trend that is inflation. Think of a pool of water where there are people in it and the water us wavy, up and down it goes here and there, but, for the water line to increase, raising the average water line, we have to pump more water into the pool faster than we take people out of it. So, if we print money faster than the GDP can produce goods, we wind up with money chasing goods, which causes inflation. Now, how the federal reserve actually does this is more complex, having to do with the fractional reserve banking system, but this is the essence of the thing.

In order for you to understand why inflation is taxation, you have to understand why fiat currency causes in inflation. Printing money faster than GDP can keep up with it will create inflation per the pool example, but let's look at it from another angle.

Say you have 5 people, and each has $100, and they all want to bid on a vase. The price of the vase won't go higher than $100.

Say you print up $100 and give it to each of the five. What do you think will happen to the price of the vase? It will go up, depending on how badly someone wants it more than the others, but it won't go higher than $200.

Now, this is reducing how inflation happens on a very simple level, but that's the essence of it.

One might argue that banks loaning money causes inflation. No, that alone doesn't because the money supply does not actually increase with a loan, it has to be paid back. So as loans are giving people money, them paying it back takes it away from them, so no net increase. UNLESS, we get a freebie from the government.

Yes, I'm well aware that in the last 20 year, there were three times the gov did QE (quantitative easing, fancy term for printing money, paper and/or digital) which did not result in inflation. )

But it did, over a 20 year period, and that's all that matters.

Now, what about the last 3 trillion that was created out of thin air, will that cause inflation?

Not in the tactical sense, but it actually does in this sense. Owing to declining demand, prices would have eventually fallen, there would have been DEFLATION, and that deflation would have been the true value of goods and services, and the stimulus money prevented this deflation. So, in a technical sense, it is inflation but all it is is keeping prices from falling. The stimulus money is a good thing given the circumstance, I support it.

But, that isn't really what I'm taking about. Inflation is caused by too much money chasing too few goods and services. Deflation is the opposite.

When the government prints money, QE faster than the nation increases GDP to prevent too much money chasing too few goods, inflation results.

Nothing else is the cause of inflation. When unions strike for higher wages, it's reactionary, it's not causing inflation, it's merely trying to keep up with it.

when a rolls cost more than a volkwagen, that's not inflation, that's two items of different value owing to the labor and materials put into them.


But, how is inflation taxation? It is indirectly, for those who wages don't keep up with inflation, and those who savings are not hedged to keep up with it.

So, say you have $1000 in the Bank, and it buys XXXX goods, so each X costs $250 each. Say the price rises a year later, due to inflation, to $2000 and now each costs $500 each. A year ago, you could buy XXXX, but, after inflation, you can now buy only XX goods.

Someone stole your potential to purchase XX from you. That someone who stole that money from you is the government who printed fiat currency faster than the rate of GDP. This was done without your consent, which is why I say inflation is taxation without representation.

Now, if you were able to hedge buy investing in real estate, or gold, or something that keeps up with inflation, you are not taxed.

So, rich people can hedge with greater ease than poor people, who don't have access as much to hedge investments ( hedge funds, for example ) so inflation is a tax on the poor.


So, inflation is much more of a tax on the poor than it is the rich. AS for the middle class, depends on if you have hedged or not, some have, some haven't.

IN order to understand this, you need to grasp that you can't create wealth out of thin air. You print money, someone pays for that benefit, somewhere, somehow, even if it isn't immediately apparent.

Inflation is taxation to those who are unable to hedge against it, because the initiator of inflation is the government ( there is no other source of inflation )
and they benefit by issuing fiat currency, and those who can't hedge pay the tax for their (the gov's) benefit in the form of reduced value of savings and/or wages that lag behind inflation much more on the bottom end of the economy than on the top.

This is another reason why, though I'm a leftist, I reject the monetary policies of the MMT crowd, who are unable to grasp the above.

THe best explanation of inflation ever told is in a book written in 1972 by Harry Browne ( RIP ) called "how to profit the coming devaluation".

If you have any difficult grasping the above, or you think I'm wrong, get that book, it will drive this point home like no one can, better than Milton Friedman, and I read his book, as well. I was 21 when I purchase that book at Gimbel's Dept Store in Manhatten during that year.

Those who argue the rich pay all the taxes and the poor do not, the opposite is true. Over the years, owing to increased values of holding accruing faster than inflation, their holdings have vastly surpassed whatever taxes they have paid, and thus the super rich have been subsidized by the poor due to inflation. Over the years, inflation is, essentially, mass wealth transfer from the poor to the rich. Which is why I support a progressive tax on the rich and wealth redistribution policies ( that aren't overboard, either ) to help reverse this fact.

And note both Harry Browne and Milton Friedman were libertarians (RIPx2)

 

I would propose funding the govt with taxes on imported and/or luxury (ie- nonessential) goods and services, probably after considerably shrinking govt.

 

I would first posit that there is no such thing as "too much" money chasing supply (goods), because there is no one standard there, at least with a fiat currency. There is no set amount that money should be at when the money supply is entirely arbitrary. Now, perhaps you didn't mean it quite that way, but merely phrased it this way to point out that increasing the money supply increases prices, which is the essence of inflation - the value of a unit of currency decreasing.

Regarding savings and remuneration keeping pace with inflation, I would say that it is important to keep increasing the minimum wage nationwide to compensate for inflation, so that people are not "taxed" by inflation. However, there is also the problem of the value of labor itself falling. Factory work today is not worth as much economically as it used to be, oftentimes, due primarily to simplification of the labor in connection with automation. The work is often less skilled than it used to be, and so it is worth less. This is a fundamental and universal problem for those who expect to earn a living the same way their grandparents did; economic reality has changed considerably since then (say, the 1950s - 1980s), and fiat currency has no bearing on that. That is simply technological advancement displacing and devaluing manual labor. For other work that is not so devalued, however, that again is a matter of keeping wages and salaries high enough, and that can be achieved by various means, e.g. labor unions and wage laws.

One unofficial tax we've been experiencing is the transfer of wealth from the working class to a select few who benefit from investments. They collect interest off of our backs as we pay interest on loans, for instance. There, taxation is actually vital for transferring that wealth back into the economy and to the majority of us. However, again, it's not going to reach us through pitiful wages doing low-value work, unless we're talking about tax-funded work from the government, whether as direct government employment or government contract work. In fact, I myself earn a living indirectly from the government, working as a contractor. I don't see inflation as taking anything from me, because 1) I don't have a bunch of cash or low-interest savings sitting around losing value, and 2) I am able to increase my fees to compensate for inflation. The only taxes I have to contend with are actual taxes, and they suck for contractors because there is a self-employment tax, and it is not progressive. So, the only thing I would change is to reduce or even eliminate income tax for labor and shift that to something else, such as a national sales tax and/or more tax on the so-called 1%, who are still getting richer while the rest of us get poorer (again, not because of inflation).

 

To the OP, yes.

Is every reason for taxation immoral? Nope.

 

You believe taxes are moral.

That's the simple answer, the question doesn't ask what type or how much, but gives the opportunity to elucidate.

If you believe taxes are moral, then you can't say, "only taxes I approve of are moral".

But you can say 'I'm opposed to taxes I don't like".

 

In a constitutional republic where the lege is elected by We the People, then tax laws are moral.

 

Then I guess I just think the poll is overly simplified. But I voted yes