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.
No comment yet… everybody likes low taxes 🙂
The argumentation of people like Nozick starts from the premise that the level of taxation is arbitrarily set by a parasitic group of people who somehow seized political power and used it in order to live off the working man’s back. Setting the level of taxes on a rigorous, “scientific” foundation would unchain the forces of production and equally benefit everybody from big corporations to the little guy.
Yet when put to the test this model fails bitterly. In a country like Romania, we have a flat tax of 16% but since all big multinational corporations are off-shores and implement heavy “fiscal optimisation” (read fictitious operations that externalise profits) the estimated real tax is around 5%. At the same time the laws concerning employee rights suffered a major “reform” in 2011 effectively stripping the working man from all his traditional rights, most big corporations would not even tolerate such a thing as a syndicate. In these conditions, the burden of the public budget lays mainly on the employee by taxes on the salary and by VAT. The Nozick model was implemented successfully, yet we don’t see the promised economic explosion that benefits all, the economy is dragging and relies on international credit to stay afloat. The only result of these politics is a unbalanced repartition of income in which the capital takes 70% and work gets the remaining 30%.
This discrepancy is deepening every year, so when it will reach 90 -10 some smart theorist will be able to say: “Hey, we have here a parasitic group of people who somehow seized political power and used it in order to live off the working man’s back!” Tough brake, we are back to square one…
The question is: can we have a theoretical framework that would define what “individual” is and what “collective” is, as well as explaining their mutual relation? Can we set society on a firm understanding of human nature? (this is in fact a reformulation of the Hard Problem)
Thanks for sharing thoughts Adrian, to which I am sympathetic. I live in Hungary, which also has a flat tax.
I’m afraid I don’t have any simple answers to your questions. I think the public mindset is still caught up in the dichotomy between free market capitalism and state run communism, and the left needs to somehow inspire people to fight for democratic control of capitalism (as opposed to its immediate overthrow).
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