Archive | April, 2016

The Desire for Low Taxes has nothing to do with Freedom

30 Apr

The demand for freedom is a powerful rallying call. The economic right often portrays its relentless demand for ever lower taxes as a fight for freedom from ‘big government’. One problem with this framing is that money is itself a kind of freedom; financial freedom is freedom to have and to do. The poor have few options, and this is a perfectly good sense in which their freedom is severely constrained. When we reduce (or even abolish) redistributive taxation we take financial freedom from the poor and give it to the rich.

The real concern of the economic right is not with freedom but with property rights. Their fundamental resentment is the state taking ‘our money’. The most worked out defence of this position is due to the philosopher Robert Nozick, in his classic work ‘Anarchy, State and Utopia’. Nozick thought of property rights the way most of us think of basic human rights. Just as it is a fundamental duty of the state to protect our basic human rights, so for Nozick it is a fundamental duty of the state to protect our property rights. If the disadvantaged suffer, or are even left to die, then that is regrettable. But for Nozick no evil is so great as to justify the state taking even one penny of our property away from us (beyond what is required to fund the most basic functions of the state, such as the police).

In other words, Nozick thought that the protection of property rights is more important than human happiness. Does that makes sense? Jesus famously said ‘The Sabbath is made for man; and not man for the Sabbath.’ His point was that the religious authorities of his time were fetishizing religious institutions and traditions, putting them above human happiness when the very purpose of such institutions is to serve the spiritual nourishment of people. I think a similar charge can be levelled against the economic right. The right to property is not some natural, sacred thing that exists independently of human conventions and legal practices, and which we are obliged to shape our laws to protect. Rather we create property rights, by setting up legal institutions which ensure that people have certain legal rights over the material world.

Given that we create property rights, we can shape them as we choose. We could make the legal right to property as inalienable as the right to life, and thus rule out the possibility of taxation. Or we could make the right to property a qualified right, conditional on the payment of taxes. The only question we need to ask is which of these possibilities better serves human happiness or other considerations of justice.

There is obviously room for debate about how much redistribution is economically feasible, and about which things are better left in public/private ownership. But when we remember that property rights are manmade, we appreciate the full range of possibilities available to us; we are empowered to create a system of tax and property which serves the betterment of human kind. In contrast, when the economic right declare that ‘Taxation if theft’, they inculcate the idea that property rights are natural rather than manmade, and as such are unchanging and inflexible; to be respected even if this is at the cost of justice or happiness of 99% of humanity.

This point is subtle but crucial. In a democracy the wealthy must continuously find ways of getting the poor to vote against their interests; of creating what Marx called ‘false consciousness.’ After the 2008 financial crisis the fetishization of debt was used to distract low and middle earners from the fact that they were paying for the mistakes of bankers. The fetishization of property rights is a much more pervasive source of false consciousness. It is a way of making the current distribution of wealth and property seem natural and inevitable; a matter of what people have an inalienable right to. In fact, the system of property and taxation is manmade. We have the power to shape it as we choose.