This is a very good post on taxation - as it is practiced in this
country. It's as true today as it was 23+ years ago and IMO is worth repeating:

29 Dec 95 20:53:00

From: Alvin Sylvain
To: Rex Bennett
Subj: Taxation (was unions)
Attr:
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Rex Bennett writes to Jim Panzer (and Jan Bacher?):

Taxes constitute stealing. Profit is theft only if
what produced the profit was subsidized by others not
sharing in the profit.

So very, very true.....BTW, I loved this reply, are you sure
you are not Ann Rand reincarnated..............

Taxes are not stealing, but the costs of living in a particular
society, especially in a democratic society where the people can
influence taxes by their votes.

Rather than regurgitate the debate as to whether the "legal"
definition of "stealing" matches up with the _de_facto_ definition
of "taxation," let me just *assume* for purposes of discussion that
Taxation Equals Theft. PARTICULARLY in a democratic society where
the people can influence taxes by their votes.

There are a number of dynamics which influence and are influenced by
taxation. In a democratic society for example, people vote for
benefits they believe someone else will pay for. This is de facto
stealing, using government as the thief. Government loves this kind
of taxation, because it's much easier to get votes for. Not as many
people vote for benefits they have to fund personally.

Corporate taxes and taxes on the "Rich" are favorite political
footballs. Since most of us don't define ourselves as "Rich," it's
easy to vote for politicos who advocate that. (Many define "Rich" as
"Someone who makes more money than I do." Clinton nicely defines
"Rich" as "Someone who makes anything at all.")

But what happens when these taxes are implemented? The truly "Rich"
shift their money around to their own best advantage. They can "buy"
favorable legislation ("loopholes") from the same government the
voters try to use for their stealing. If necessary, they can ship
their assets out of government's reach.

(One of the reasons the Swiss banking system has historically been so
popular is that they have refused to succumb to demands from other
nations to divulge information on personal accounts, unless the
nation could prove a violation of *Swiss* law. Tax evasion isn't
against Swiss law. This is changing however, largely under bullying
from the US, trying to catch more victims in our failed "Drug War.")

At any rate, the "Rich" become "Middle Class" on paper, so that the
only way to really increase tax revenue is to get it from the Middle
Class. (The Poor, naturally, don't have any money.)

What happens if you increase Corporate taxes? Prices go up. The
tax is, again, paid by the Middle Class.

So all this rhetoric about "Taxing the Rich" is just that: rhetoric.

The problem, returning to the "democratic society," is that the
majority voting block doesn't seem to know this. It is still
political suicide to promise anything other than lower taxes,
increased spending, AND a balanced budget.

Keep in mind that most people don't mind paying taxes because
they understand the necessity of them.

Many more would not only "mind," but they'd be seriously offended,
if they knew what really happens to a large chunk of their tax
dollars. Just to pick one famous example, private charities, for
the most part, get an average of 80 cents out of each donated dollar
to the recipient, while (surprise surprise!) the ratio is reversed
for government-sponsored "charities" (ie, welfare). For another,
there are subsidies for anti-smoking campaigns, and subsidies to
tobacco farmers.

People don't mind small taxes. (People don't mind annoying
relatives at Christmas, so long as they're gone well before New
Year's.) England once boasted having the highest rate of voluntary
taxpayer compliance in all of Europe. At the time, their tax rate
was incidentally also the lowest (about 5%).

Today however, the average American family pays over 40% of their
gross income to taxes. Granted, there are other nations with higher
tax rates. But few are the economic giants we are (were? How much
of our *current* economic wealth is mere "coasting"?)

The statement that "Profit is theft only if what produced
the profit was subsidized by others not sharing the profit"
is very narrow in vision.

It's not a good statement. I wouldn't have phrased it thus. Too
confusing. Shucks, it's even got some people tossing accusations of "Communism" around.

There is no profit in any business that is not subsidized by
society. Because it is such a complex interrelationship
people all too easily overlook it.

Certainly it's a complex interrelationship, but at the heart of it
all is *INDIVIDUAL EFFORT.* Society may provide (or fail to
provide) the opportunities and the groundwork, but the bottom line
is that without business entrepreneurs, capital investors, and
laborers (ie, INDIVIDUALS), the work WILL NOT BE DONE. If the work
isn't done, society suffers. The best way to encourage people to do
the work we need is to ALLOW the PROFIT MOTIVE. You get better
results with a carrot than with a stick.

Profit is society's way of rewarding businesses that provide it with
what it needs. It's extremely complex and interrelated. There's no
computer model that can possibly handle all the variables. But at
the heart is the fact that when a business can provide goods or
services that society needs, society rewards that business with
profit. When a business fails to provide something society needs,
society punishes it with bankruptcy. Hence, people (ie, INDIVIDUALS)
are encouraged to provide things society truly needs.

"Society" is a huge web of interacting individuals, with a possible
two-way connection between any two. It does not exist outside the
individuals who make up the nodes or the transactions that make up
the threads. The larger the society, the more the potential links,
increasing faster than exponentially. Each transaction in the web
provides a profit for both ends (or it doesn't happen). Some kinds
of profit (eg, money) can be accumulated to provide seeds whereby
more transactions can take place, causing more profit.

Two people deal with each other voluntarily because they each see a
gain in the relationship. The stability in that relationship allows
others to build more relationships. The web is so interdependent
and so strong, it succeeds and prospers while governments come and
go, altho it succeeds much better when governments stay out of the
way.

When governments *don't* stay out of the way, by restricting the
threads (transactions) or the nodes (individuals) or by taxation
(which takes a little from both), the web *is* *made* *weaker.*

We truly stand on the shoulders of our predecessors, and they on
that of theirs, but at each level, we stand only because we flex
our own muscles. No one can exercise our own muscles for us, and
none of us can exercise anyone else's muscles for them. We don't
owe anyone the fruits of our labors, nor anyone owe us the fruit
of theirs.

When you take the fruits of someone's labor by force (taxation) you
weaken that person. When you weaken one of the nodes in the web of
society, you weaken the web. The more nodes you weaken, the weaker
the web becomes. It doesn't matter if they get a little bit of it
back in the form of "services". It doesn't matter if some of the
people jump for joy at receiving some pittance in exchange. All that
matters is that, if people were to choose their own course for their
own resources, most would choose differently.

People automatically choose a course *they* find to their benefit,
not to where some Government Expert thinks is their benefit. They
spend their resources in ways they find personally strengthening.
Spending someone's resources by force in any other direction weakens
them. If the people's and the government's ideas were identical, it
wouldn't be necessary to take the resources by force.

Even in cases where people receive the exact benefits they'd want
(police, defense, fire protection etc.: you know, the things that
used to take up a goodly fraction of govt spending) it costs more
than if they spent it themselves. The agents of spending have no
real motivation to optimize the transactions, since there's no real
connection between those and themselves: they're literally spending
someone else's money, and therefore hardly care. Again, *weakening*
the original nodes, therefore *weakening* the web of society.

I'm sorry, there are just no two ways around it. The only way
you can make the claim that Taxation is NOT Theft is to use a
dictionary definition: to wit (Merriam-Webster Collegiate, from
memory), "theft: the UNLAWFUL taking of someone's property without
permission" (emphasis mine, of course) Taxation, unfortunately,
is somewhat lawful?ul?••wi
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