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March 6, 2008

The moral limits of taxation

My favorite blogger, Tyler Cowen of Marginal Revolution, is a thoughtful, intelligent libertarian. (No, those words don't always go together.) Today he demolishes the oft-expressed or implied (opposing) views that 1) all taxation in evil or that 2) no taxation or limits to freedom are too high if they create good. A snippet:

1. A doctor is not required to devote his entire life, or even a part of it, to helping poor kids in Africa, even if he could create greater good by doing so. Personal autonomy matters.

2. The right to keep the product of your labor -- money! -- is a big part of autonomy, even though it is not always recognized as such.

3. Barring end-of-the-civilized-world exigencies, no one should be forced to part with more than a certain percentage of his or her income, even when valuable public goods are at stake. There is, after all, no end to good ideas for redistribution, not the least of which is the helicopter drop to Malawi. We all draw the line somewhere, so it's not enough to cite benevolence to defeat the claims of property rights and the demand for low taxes.

4. Adhering to such a percentage rule will have desirable consequentialist properties, given the public choice problems with government behavior. Thus a kind of consilience supports this moral view.

That all said, I do not believe we have a very clear or very scientific answer as to what the right percentage is. Furthermore "the proper percentage" is likely contingent upon historical circumstances. I take that as representing a partial -- but only partial -- endorsement of Nozick's Wilt Chamberlain argument and of course I reject the deontological ("just don't!") nature of Nozick's approach altogether.

Warning to extreme libertarians: Don't even try to argue that zero is the maximum permissible rate of taxation. Would you abolish all taxation today, immediately, if it meant a rapid collapse into social chaos?

Warning to social democrats: You are used to citing beneficience arguments to argue for raising taxes. But you reject beneficence arguments yourself, when you refuse to step into the shoes of Peter Singer and call for even more redistribution. I want to make you feel guilty about this tension. What you'd like to do is dismiss Singer with a separate argument and then turn your fire to the anti-tax types and feel that beneficence is always on your side. It isn't.

Cowen is an economics professor at libertarian bastion George Mason University. Read the whole post here.

Posted by Jay Hancock at 10:26 AM | | Comments (0)
        

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.
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