Taxation is legal plunder

The argument

Frederic Bastiat, French philosopher of the 19th century deemed taxation to be a legal plunder. According to Bastiat, taxation does neither subtract nor add to the economy of the taxpayer or tax receiver, but is rather an internal reallocation of existing sums, an exchange. According to Bastiat, the distinction between just taxation and legal plunder is pivotal to whether the exchange reaps sufficient rewards for the payer for exchange of her payment. This is most generally seen in the form of public goods such as roads, infrastructure, security forces, et cetera. Taxation takes a turn towards legal plunder when revenues are squandered for private benefits, like subsidizing unprofitable industries or siphoning money to appease political allies. What is unique about the exchange in taxation however is that it is involuntary. As Bastiat states, “The true and just rule for mankind is the voluntary exchange of service for service. Plunder consists in prohibiting, by force or fraud, freedom of exchange, in order to receive a service without rendering one in return.” Since taxation evades the realm of freedom, consumers are compelled to pay for services they do not desire. Moreover, Bastiat states that such an exchange distorts the value of these services because of the varying fractions of each taxpayer’s income through their apportionment.

Premises

Counter-arguments

Critics reply that the argument's own source undercuts its conclusion. Bastiat, as the body states, distinguished just taxation from legal plunder, treating revenue that funds genuine public goods as legitimate and reserving "plunder" for sums diverted to private benefit. An argument that adopts that distinction can conclude at most that some spending is plunderous, not that taxation as such is theft. They also dispute that involuntariness is sufficient: jury service, conscription, compulsory schooling and the enforcement of contracts are all non-consensual and are not classed as theft, and theft is standardly defined by the absence of lawful authority, which taxation by definition has. The demand for individual consent is unattainable for the goods at issue precisely because they are non-excludable — anyone able to opt out while still receiving national defence and the rule of law would have every incentive to do so, which is the standard free-rider case for compulsion. The observation that taxation neither adds to nor subtracts from the economy is an accounting identity that establishes nothing about wrongdoing; court-ordered restitution is also a transfer. And the misuse point, critics conclude, argues for better fiscal governance rather than for the sweeping classification the position asserts.

Rejecting the premises

[Rejecting P1] That taxation reallocates rather than creates value is an accounting observation establishing nothing about wrongdoing — court-ordered restitution is also a transfer — and involuntariness alone is not sufficient, since jury service, conscription and compulsory schooling are non-consensual without being theft. [Rejecting P2] Theft is standardly defined by the absence of lawful authority, which taxation has; and individual voluntary consent is unattainable for non-excludable goods like defence and the rule of law, where free-riding is the standard reason compulsion is thought necessary. [Rejecting P3] On the argument's own source, revenue squandered on private benefit is what marks plunder — which makes the complaint one about particular spending and an argument for better fiscal governance, not a reason to classify taxation as such as theft.

Framing

Taxation is not unjust by definition but is subject to abuse.