this world nothing is certain but death and taxes"
The other day I saw some old film footage of Suffragettes
marching with a banner that read, "Taxation Without Representation Is
Tyranny". I seem to remember that some American colonials also once
expressed similar views (whatever happened to them?). Most people would now
regard that point as a fair one. I am no great fan of democracy, preferring
liberty, but even I can agree that people who are taxed but not allowed to vote
are likely to be more than averagely oppressed by those who can vote.
This then prompted me to consider the converse proposition:
Representation Without Taxation Is Tyranny. It would, of course, be a fallacy to
think that this is entailed by the first proposition. But surely it is just as
reasonable. In the mid-nineteenth century most people accepted it as a fair
limit on the franchise. Why should people who are not taxpayers be allowed to
vote money away from those who are? If we must have state services, it should at
least be for those who pay for them to vote for which services they want and how
much they wish to pay. To allow those providing, or living off, the services to
vote is like allowing a shopkeeper to vote on what you must buy from him, or a
beggar to vote on what you must give him. Naturally, I hear you say, but doesn’t
everyone pay tax, at least on goods and services? And so is the proposition not
true but irrelevant? No, they do not and it is not. Not by a very long chalk.
PEOPLE IN THE PAY OF THE STATE ARE NOT GENUINE TAXPAYERS
Consider state distribution of tax-money. We can see that
this must create two social categories: those who are net taxpayers and those
who are net tax recipients. Only the net taxpayers can be said to provide the
state with tax-funds. The net tax recipients are paid out of taxation, plus any
payments in newly created state-currency (which effectively taxes those who hold
money). So to the extent that people are in the pay of the state they cannot be
genuine taxpayers. A proof of this is that if their jobs were abolished the
state would have more money to spend elsewhere, unlike those jobs in the
genuinely taxpaying sector.
To take a clear case, when a direct state-employee, such as a
civil servant, receives his salary cheque, there will be an apparent deduction
for the amount of tax that he pays. As a matter of fact this is a mere
bookkeeping exercise designed to keep up the pretence that he is a taxpayer
along with everyone else. Abandoning this pretence of taxpaying and simply
paying him less in the first place would save taxpayers’ money in
administration and make the political reality clearer to all.
AN ABSOLUTE INJUSTICE
Now, I am not arguing (here at least) that the people who
live off taxation are social parasites. For the sake of argument, I am prepared
to grant the (absurd) assumption of so many superior state services that the
state ought to employ half the population. My point is that it should be clear
who is paying what to whom and that those who are being paid cannot be allowed
to decide what is to be paid for — which is what allowing them the vote does.
This is an absolute injustice, a tyranny that destroys the wealth and liberty of
the real taxpayers.
CLASS THEORY: TRUE AND FALSE
Wouldn’t allowing only taxpayers to vote be socially
divisive? The social divide is there already. This is merely a demand that it be
unmasked and that those who do not pay taxes be stripped of their privilege to
vote themselves more ‘resources’ (as tax-recipients like to euphemise
tax-money). Charles Comte, Charles Dunoyer, and Augustin Thierry were foremost
among those who exposed this divide as the classical liberal theory of class.
Yet Karl Marx took classical economics’s supposed clash between labour and
capital for his own notorious class theory. However, while there is sense to the
idea that taxpayers and tax-recipients are at odds with each other (for every
gain to the tax-recipient is a greater loss to the taxpayer in a destructive
struggle), there is no truth in the idea that workers are at odds with
capitalists (for there are gains to both sides, and to the consumer too, in the
process of production). But if only the genuine taxpayers are voting for
services that they want, then any conflict between the two tax-classes is
minimised: taxpayers cannot be milked by tax-recipients (though there is still
democracy’s inevitable tyranny of the majority within the group of voting
WHO DOESN’T AND DOES PAY TAXES?
So who does not pay taxes and so ought not to have an
electoral vote? Judges, state-school teachers, all in local government, state
policemen, all in the armed forces, all in prison, all in the NHS, all in the
civil service, all employees of the BBC, all the unemployed, all in academia
(except, perhaps, in the private University of Buckingham), some farmers, some
solicitors, maybe some barristers, any employed in businesses that receive
tax-subsidies in excess of their tax-payments, and MPs with insufficient taxed
market-incomes to cover their salaries. I cannot list them all, but you see the
size of the problem. You can also see that there is no class conflict in any
quasi-Marxian sense here.
Who, then, does pay taxes? Well — anyone who is left. If
you are in any doubt as to which category that you are in then the simple test
is to ask yourself whether, in your current position, you would have more
purchasing power or less purchasing power if taxation were completely abolished.
THE BENEFIT OF THE DOUBT
There are some who are on the periphery of net tax-receiving
and whom it will not be possible to distinguish with certainty. These people
receive most of their income from purchases by state institutions or state
employees. The latter is especially hard to be sure of. For instance, those
working for The Guardian and New Statesman & Society might
just fit this category. But if it is too hard to prove then they might have to
be given the benefit of the doubt. Though if the state sector shrinks, due to a
new Taxpayer Democracy, then enterprises will decline to the extent that they
necessarily depend on indirect state patronage. In the case of the latter two
publications I would expect such journals as The Times and The
Spectator to expand to replace them.
© Libertarian Alliance 2001