The libertarian’s views on taxes

Libertarians have some interesting theories about taxation, and it all starts with the non-aggression principle.

Peter O’Halloran - Tax advice

Libertarians believe in minimal government interference, low taxation, slashing bureaucratic regulation of business, and the promotion of charitable, rather than government, welfare.

They also believe in the non-aggression principle, which holds that force should be used only in self-defence.

This principle spills over into libertarian tax theory. Libertarians argue that taxation should be kept to the minimum.

In their view, most government programmes are wasteful. They see the role of the state as principally to provide law and order in the form of policing, armed forces and courts of law.

Taxes may be gathered to fund these services. (Libertarians do, however, oppose taxation to fund a war of aggression; armed forces should protect the country and not be belligerent.)

Any tax demand over and above what is necessary for the provision of essential security is deemed a contravention of the non-aggression principle.

Property rights
Property rights are inviolate for libertarians. If you seek to protect your property by avoiding high taxation or refusing to pay tax clearly meant to line the pockets of those not entitled to the tax, government steps taken against you are a violation of your rights and the non-aggression principle.

On the other hand, you have a duty to pay taxes for the provision of law and order. If you refuse to do so, government has a right to collect what is due to it, and this will not be considered a violation of the non-aggression principle.

Indeed, this is seen as a form of self-defence undertaken by government on behalf of those who have paid legitimate taxes, because non-payers are indirectly subsidised by them, thus unlawfully intruding upon the property rights of those who have paid the legitimate taxes.

Clearly, libertarians favour ‘small government’ and regard big government as wasteful and expensive.

High taxes are required to keep it operational, and this leads to the diminution of property rights over time. In addition, politicians tend to pander to the demands of the masses to stay in power and this leads to less secure property rights.

By contrast, small government means lower taxes, higher productivity and improved freedom through less business and social regulation.

There are also more business opportunities, as most services have to be provided by private industry, not government.

It’s certainly something to think about.