Suppose–purely hypothetically–a prominent politician uses the following argument to explain why we should pay more taxes:

If you are rich, you relied upon background infrastructure, social norms, institutions, the rule of law, and so on, in making your money. In the state of nature, life would be nasty, poor, brutish, and short. But you life is pleasant, rich,  civil, and long, thanks to these background institutions, many of which are provided by government. So, pay us more taxes.

These kinds of arguments try to establish that you owe a debt to society, and then try to establish that paying more taxes is the right way to repay this debt.

The problem is that they assume–without argument–that the society to which you owe a debt just happens to be the nation-state. There is no reason to assume that. In fact, it’s more plausible that my debts, if I have any, are both more local and more global than the nation-state.

Consider that I was educated in public schools in Tewksbury, MA, and Hudson, NH. I now drive on roads provided by certain counties in Virginia and by Washington, DC. Etc. If I owe a debt for my education, why think this indebts me to America (or the federal government) rather than Hudson, NH?

I benefit from the positive externalities created by an extended system of trade. Why think this indebts me to America (or the federal government) rather than almost the entire world?

Suppose I were to buy a loaf of bread. If I trace the history of that bread, Leonard Read “I, Pencil”-style, I’ll find that in producing the bread, a wide range of governmental services were used. These services come from local, state-wide, and federal governments, both domestic and foreign. It would be bizarre, then, to assume that in buying the loaf of bread, I acquire some special debt to the US Federal Government.

Another major error is to assume that people must repay their debts through taxes. I don’t know what Thomas Edison paid in taxes. But I can safely assume that he did more to repay his “debt to society” through his inventions than by paying taxes. A similar point will apply more weakly to many of the rest of us.

A final problem with the hypothetical politician’s argument is that it does not establish how much people should pay. The argument above (and the real-life argument to which I allude) do not tell us at all what marginal tax rates should be. Perhaps I owe the government 95% of my income. Perhaps I owe it 5%. The argument does not say. One might try to argue that I owe the government everything, since life would be lousy in the absence of government. But we could just as easily say that the government owes us everything, since it couldn’t function without us.

ADDENDUM: I forgot to list another mistake the argument makes. Consider that my kids probably owe me a debt for raising them. To repay that debt, when they are adults, they should probably at least visit or call once in a while. However, while they owe me this debt, I will not be entitled to force them to pay it. So, another problem with the debts to society argument for increased taxation is that it doesn’t establish that society may force us to pay our debts.

Print Friendly
Tagged with:
 
  • http://independent.academia.edu/DannyFrederick Danny Frederick

    There is another problem, too (I don’t think you covered this one). It could be that your current position is in many ways good but would have been in many ways better, if not for certain conditions that have obtained during your life. Thus, it might be that you owe much of your good fortune to particular institutions; but had those institutions been better, you would have been much better off. And it may well be that those institutions would, indeed, have been much better if the government had done a lot less, and perhaps even if it had pissed off entirely. In that case, the government owes you for spoiling the institutions that would otherwise have made you (and everyone else) much better off.

    • Marcelo Teson

      The problem with that argument is that there is a mechanism already in place to improve those spoiled institutions: voting and/or running for office. Your argument also assumes that taxes are things you pay to make your life better. Technically taxes are things you pay because the institutions you and your society have voted into existence require money to run. So even if an institution makes your life worse, you still owe the taxes because that institution cost money. The proper way to change the institution is at the ballot box, not by arguing that because the post office sucks they should pay you money for using their stamps.

      • MARK_D_FRIEDMAN

        Sorry, your position here is quite wrongheaded. The fact that you live in a democracy says nothing, repeat nothing, about the justice of that particular society. Ever hear the phrase “tyranny of the majority”? Are you aware of what has happened in Venezuela? Aware of U.S. history, and specifially the Jim Crow south? Your need to read-up about the whole issue of what philosophers call “political obligation.” You can start here: http://plato.stanford.edu/entries/political-obligation/

      • http://independent.academia.edu/DannyFrederick Danny Frederick

        The problem with your objection is that what you call ‘the mechanism to improve the spoiled institutions,’ namely voting and other political activity, is not a mechanism that can improve the spoiled institutions. A single vote is worthless, except in highly unusual circumstances. and if you engage in political activity you become a pawn of the existing pressure-group power play. Even politicians who enter office in possession of a great reforming zeal usually end up achieving very little of what they set out to achieve, and sometimes achieve results the opposite of what they wanted. They always end up having to do deals and make compromises which defeat the objects they are ostensibly pursuing. So the ‘the mechanism to improve the spoiled institutions’ is part of the force for evil.

        No, I was not assuming that taxes are things paid to make our lives better. I would find that a very queer assumption to make. But it, or something like it, is the assumption of the argument I am criticising, according to which taxes are our way of repaying our debt to society.

        Further, the only institutions that require taxpayer’s money to run are government sponsored institutions. Do we need them? That is debatable.

        It seems to me that the only peaceful way to change these institutions is to change the climate of opinion. That will influence people’s voting behaviour and also change the mind-set of politicians, so that they become resistant to doing the sorts of things that they currently think it is a good thing to do. Incidentally, I am in favour only of peaceful ways of bringing about change.

  • Hume22

    Jason,
    How would you answer the argument set forth by Charles Taylor in his “Atomism”? [Note that I am not endorsing Taylor, just interested in learning from your response to him, preparing for the IHS Seminar "Advanced Studies: The Challenges and Future ofLiberty"]. According to Taylor, if we assert the value of freedom, we are committed to affirming the conditions necessary for its realization. Freedom can only be obtained (indeed, can only be sought) if the individual subject has a certain self-understanding. This self-understanding must be one such that “aspirations to autonomy and self-direction become conceivable.” [209]. But such a self-understanding is not sustainable on our own. It requires a whole “social matrix” (culture, institutions, etc.) that foster a rich and wide array of options, life plans, etc–”a living and varied culture . . . a complex and integrated society, which is willing and able to support all these institutions.” [206]. According to Taylor, “the free individual of the West is only what he is by virtue of the whole society and civilization which brought him to be and which nourishes him . . . [A]ll this creates a significant obligation to belong for whoever would affirm the value of this freedom; this includes all those who want to assert rights either to this freedom or for its sake.” [206].
    Thanks.
    -Kurt

    • Hume22

      NOTE that I passed over many critical steps in Taylor’s argument, such as his analysis of the grounds of individual rights (fundamental human capacities) and how these grounds may themselves give rise to moral obligations.

    • http://independent.academia.edu/DannyFrederick Danny Frederick

      Taylor seems to be saying what Hayek says, namely, we are creatures of our social environment; except that Hayek says that our social milieu is largely a spontaneous order upon which a whole range of government activities have encroached. This is the point I made above, i.e., crudely: there are two forces that have made us, one which was helpful (the market), and one which was pernicious (interventionist government). We owe a lot to market institutions (mostly good); we owe a lot to government intervention (mostly bad). The ‘debt to society’ argument does not distinguish between good and bad influences. In consequence, the inference that we should be thankful to government is a howler.

    • TracyW

      In a wealthy market society, what you contribute to society is probably more than the money you are paid for doing so. To take an obvious example – my life was once saved by $50 worth of antibiotics. The doctor who prescribed that, the pharmacist who supplied that, the people who made the antibiotics, the scientists who isolated it in the first place, the guy who delivered it to the pharmacy, got paid a trivial amount compared to the value they created for me, my consumer surplus from the deal was fantastic.
      Or take a less critical situation – you pay $40 to go to a concert. You’d happily have paid $200. Consumer surplus – $160, captured by you, not by the musician, or the facilities’ owner or the roadies or whomever.
      Therefore, people employed in a market society as a first approximation are contributing back to that social matrix above and beyond what they get from it just by doing their paid job.

  • http://www.facebook.com/people/Kevin-Currie-Knight/100000158541035 Kevin Currie-Knight

    Very good points. I’d also add, though, that a “you benefitted from x, so you should pay government” assumes that when I pay government, most or all of that money goes to x. And as Obama’s speech seemed to highlight mostly public-good-type things – roads, bridges, schools – what about the fact that the majority of government spending DOES NOT go to infrastructury or public-goods type things? If I benefit from roads, does that mean I should pay back to fund wars and regulations?

    Also – and I suppose this is normatively loaded – but it can be argued that several things government does adversely affects me. If I am a small business owner, I am adversely affected by costly regulations in my industry. If I am building a home, I am adversely affected by regulations making home construction (and hiring construction crews) more expensive. If I am a buyer of health insurance, I am harmed by many government regulations that effectively make healthcare more expensive than it would be in a more free market.

    So, if I benefit from some government activities – and surely I do, I think – but am harmed by others, then do I owe, or can’t we just call it a wash?

  • Derek Bowman

    Jay,

    You’re right that this would be a pretty weak basis on which to establish all of the following: a duty to pay taxes at all, permissible enforcement of that duty, and the nation-state as the unique owner of that duty. But surely for any non-hypothetical politician would only make such an argument in a context in which all these things were assumed as shared premises, with the only remaining question being how those tax burdens are to be distributed. In such a context, I think the argument present a defeasible prima facie case for saying that it would be fair to arrange the national tax system so that the rich pay more.

    • TracyW

      Only if the rich benefit more from the things provided by government than everyone else does.

  • RickDiMare

    Assume that there are so many expert counterfeiters in the world that the U.S. government had no other way to deal with them except to regulate those who use these currencies through income taxation, and maybe even to set a tax cap that would extinguish near 100% of income over a certain amount (to prevent unwanted monopolies in certain industries).

    These counterfeit currencies, whether issued under color of law by the Federal Reserve Corp., or illegally by others, affect commerce and externalities in the same way as Congress’ Treasury-Direct coins and currencies. So, again, assuming that it’s impossible to stop all the counterfeiters, the government would be foolish not to recognize their effect on the economy by at least regulating/taxing the use of them.

    My point is that, given the various modern ways in which money comes into being (especially after the advent of electronic currencies), it may no longer have anything to do with paying back a “debt to society.” It’s simply about regulating the use of substitute currencies in a reasonably fair way (so that a reasonably fair distribution of wealth results).

    Finally, regarding the ADDENDUM, it’s incorrect to view your kids as owing you a debt. Rather, parents are indebted to children (sometimes beyond the age of majority) for bringing them into the world and putting them in a dangerous environment.

    • http://www.facebook.com/les.nearhood Les Kyle Nearhood

      A surfeit of money does not equal an increase in wealth, and what exactly is a “fair” distribution of wealth.

      • RickDiMare

        I think I agree. I wouldn’t define an increase in today’s money as an increase in wealth either. As to what is a “fair” distribution of this dubious “wealth,” since nearly everyone keeps acting as though the money we’re using is real (i.e., real seinorage of the Treasury Department), I think the tax code does what it can to assure minimal or fair living standards.

        Henry George’s définition of “wealth” and “relative wealth” may shed some light on the discussion. In Progress and Poverty, Book 1, Chapter 2, he writes:

        As commonly used the word “wealth” is applied to anything having an exchange value. But when used as a term of political economy it must be limited to a much more definite meaning, because many things are commonly spoken of as wealth which in taking account of collective or general wealth cannot be considered as wealth at all. Such things have an exchange value, and are commonly spoken of as wealth, insomuch as they represent as between individuals, or between sets of individuals, the power of obtaining wealth; but they are not truly wealth, inasmuch as their increase or decrease does not affect the sum of wealth. Such are bonds, mortgages, promissory notes, bank bills, or other stipulations for the transfer of wealth. Such are slaves, whose value represents merely the power of one class to appropriate the earnings of another class. Such are lands, or other natural opportunities, the value of which is but the result of the acknowledgment in favor of certain persons of an exclusive right to their use, and which represents merely the power thus given to the owners to demand a share of the wealth produced by those who use them. Increase in the amount of bonds, mortgages, notes, or bank bills cannot increase the wealth of the community that includes as well those who promise to pay as those who are entitled to receive. The enslavement of a part of their number could not increase the wealth of a people, for what the enslavers gained the enslaved would lose. Increase in land values does not represent increase in the common wealth, for what land owners gain by higher prices, the tenants or purchasers who must pay them will lose. And all this relative wealth, which, in common thought and speech, in legislation and law, is undistinguished from actual wealth, could, without the destruction or consumption of anything more than a few drops of ink and a piece of paper, be utterly annihilated. By enactment of the sovereign political power debts might be canceled, slaves emancipated, and land resumed as the common property of the whole people, without the aggregate wealth being diminished by the value of a pinch of snuff, for what some would lose others would gain. There would be no more destruction of wealth than there was creation of wealth when Elizabeth Tudor enriched her favorite courtiers by the grant of monopolies, or when Boris Godoonof made Russian peasants merchantable property.
        I.II.25
        All things which have an exchange value are, therefore, not wealth, in the only sense in which the term can be used in political economy. Only such things can be wealth the production of which increases and the destruction of which decreases the aggregate of wealth. If we consider what these things are, and what their nature is, we shall have no difficulty in defining wealth.

  • http://www.facebook.com/les.nearhood Les Kyle Nearhood

    The problem with the way the President presented the argument is that it was a seemingly open ended obligation. The farmer who grows my food makes my very life possible, but my obligation to him ends with my price of purchase.

    • Marcus_V

      Exactly: There is something more than a little wrong in making the argument that in order to get something, I need to pay taxes up front, *and* that once I’ve gotten something, I am obligated to keep paying more taxes forever. (This leaves aside the question of maintenance fees– I’m not talking about a road network that I continue to use and contribute to wear and tear on a daily basis.)

  • Marcelo Teson

    “So, another problem with the debts to society argument for increased taxation is that it doesn’t establish that society may force us to pay our debts.”

    By that rationale if I sign a contract to borrow money from someone, I don’t have to pay them back, because the debt to that person doesn’t establish that he may force me to pay it. Holy tautology, Batman! You signed that contract to pay your taxes when you became a citizen or chose to live here. (see below for elaboration on this point)

    Look, no tax system in the world, and no government system at large, is going to be able to completely and specifically calculate what each individual owes to each institution for every service they’ve used. But just because taxes are often broadly imposed doesn’t make them unjust. Government doesn’t run on fairy dust and happy thoughts, even if it’s a libertarian utopia (and the government our Constitution spells out requires more than Libertopia). You have to pay for the Supreme Court to enforce the Constitution. You have to pay for the Legislatures to make law (and for the right to vote those people out if you don’t like what they’re doing). You have to pay for highway systems, the infrastructure that makes the Internet possible, the state schools that some of the writers featured on this website teach at. Taxes are the way we as a society have decided to make that happen. I don’t like a lot of what my taxes pay for either. But that’s the price of living in this generous and rights-based society, especially if that society has given me a method to petition the government for redress and to vote people in who represent my interests. If I want to change what my taxes pay for, I change them within the system with the generic understanding that I ought to pay taxes to fund the things that make this country possible.

    This whole argument just feels like a technical dodge, a way to not pay what you know you owe by arguing technicalities and itemization. It’s like a deadbeat dad who argues that without proper itemization and receipts he doesn’t owe child support. You DO have a debt, even if you don’t like it and even if the tax code isn’t completely fairly implemented.

    On a broader level, it’s important to remember that no one is forcing you to pay these taxes. The only reason you feel you have to pay them is because you have chosen to live in this society. The state isn’t coercing you to live here. But by virtue of choosing to live here you are assuming a collective responsibility to pay for that choice. There are plenty of places in the world where people don’t have that tax burden. Some folks have recently decided to move to those places due to their perception of unfair taxation. Feel free to join them. But don’t live in this country, use the roads, use the post office, use the Internet, use the state schools, use the FDA and OSHA safety regulations to keep you and your family safe, and then assert that by some magic fairy dust the state can’t prove that you owe them. That’s just dodging your personal responsibility.

    • Kyle S.

      This comment is dumb. He’s saying that the debts to society argument looks more like the kids-owe-their-parents-a-debt argument than the contract argument. In a contract, you consent to incur an enforceable debt. You don’t do that with society. Rather, Obama says that we owe society a debt because we benefit from it.

      You’re rather snotty for someone so dumb.

      • http://twitter.com/MTeson Marcelo Teson

        Wow, you throw out ad hominems galore, patronize the crap out of me, and then you call ME snotty? At least the guy who wrote “authoritarian drivel” had an inkling of substance to it.

        To address your clarification, I know what he said. I argued otherwise. I guess you were too busy calling me snotty and dumb to read what I actually wrote.

        It’s not like I called the OP “anti-government selfish drivel” or call them dumb or stupid or snotty or any sort of name-calling. I wrote a post that expressed my opinion about the topic and I stuck to the topic. I thought this website with its academic rigor and interesting emphasis would be a place where cool-headed folks could discuss things without getting called names or resorting to boilerplate accusations of authoritarianism. I thought wrong, I guess.

        • I_am_a_lead_pencil

          Marcelo,
          You are presupposing state legitimacy in order to suggest that someone ought to leave. If someone contends that moral legitimacy, you cannot coherently appeal to it in order to sway them. You are assuming your conclusion.

    • http://twitter.com/dL_1337 dL

      authoritarian drivel…

      There is no moral obligation to obey the regime in liberalism: or “dissing the shared moral foundations of G. Gordon Liddy and Chuck Schumer”

      http://rulingclass.wordpress.com/2012/05/27/there-is-no-moral-obligation-to-obey-the-regime-in-liberalism/

      • http://twitter.com/MTeson Marcelo Teson

        What about my post was authoritarian? Seriously. I took great care in not coming across as such. I specifically said that no one is forcing you to pay these taxes. I even endorsed the idea of leaving the US to avoid taxation as some have done. In no part of my post did I endorse more law or say that taxes ought to be higher. The rate of taxation is totally malleable to me. Taxes might not even be the best way to deal with all this (I think they’re as good as anything else we’ve come up with, but that’s just my opinion).

        All I did was suggest that there is a moral obligation to pay for taxes when you use so much of what those taxes fund. The interstate highway system, the existence of state universities and the Internet upon which this website exists alone justify at least some of your obligation. You can argue that your taxes ought to be lower or that there’s a better way to fund this stuff, but that’s different than saying you don’t owe society anything as a general principle.

        • http://twitter.com/dL_1337 dL

          I provided a link in my comment to a post that i had previously authored on this topic. Example: G. Gordon Liddy and the Nixon Admin used this same moral obligation to justify the attempt to deport John Lennon in the early 70s

    • TracyW

      Teson: You miss that Brennan’s argument is about, to quote: “why we should pay more taxes”. Just because some taxes are the price of living in a society doesn’t mean that more taxes are therefore automatically justified.

      And it’s one thing to pay taxes for the things that make this country possible (eg Supreme Court, highway systems, etc) and it’s another thing to be obliged to pay for things like mortgage interest deductions, farm subsidies, corporate giveaways, etc.

      And yes, there are ways of changing what the legislature is doing. And that’s what this debate is about. Some people are arguing that people should pay more taxes, others are arguing that the government should cut spending instead. One of the arguments that some people are using for higher taxes is this one about the debt that people owe to society. Brennan, by responding to that argument, is participating in the process of debate. After all, it’s not much good havaing the right to vote, or to petition, if we don’t explore the arguments as to why we should be voting, or what we should be petitioning about.

      It’s one thing to pay a share for using the roads, the post office, the internet, state schools, etc. It’s another thing to start arguing that becuase the state provides some useful things, it therefore has a right to take as much money from you as it likes (“pay us more taxes.”)

  • simple

    tax is payment for money

  • adrianratnapala

    I benefit from the positive externalities created by an extended
    system of trade. Why think this indebts me to America (or the federal
    government) rather than almost the entire world?

    Whatever country we come from, we owe fair fraction of the gains of international trade to the US navy and whoever pays for it.

  • http://profiles.google.com/jtlevy Jacob Levy
  • Pingback: What Follows from “You Didn’t Build That”?

  • famadeo

    So… is this post a stance against *high* taxes, or taxes *at all*? Just so I understand BHL a little better. I notice that there isn’t much of a consensus on the subject of taxes among them.

    • j_m_h

      I don’t think Jason’s post requires it hold a specific position about “*high* taxes, or taxes *at all*”. He seems to be critiquing certain arguments used to rationalize the demand that certain groups bear an increased tax burden to the Federal Government due to some debt they (may or may not) owe to society. I think it’s getting and the confusion between society and, specifically, Federal Government (but often simply government) in the rhetoric related to tax policies.

      • famadeo

        Does that mean that the possibility for *other* justifications for taxation remains open? Not to be inquisitive, just curious.

        • j_m_h

          Well, that’s a bit like asking “What does P implies Q mean regarding Y?” I don’t think you can really extrapolate an answer to your question from Jason’s argument — or even infer what his position might be regarding your question.

          Speaking for myself, I’d first ask what core meaning do we want to put on the term “taxes”. From seeing a lot of these types of discussion online I’m convinced that the differing side typically have a completely different image in their mind about what taxes are. For some taxes are simply funding the social institution of government. That’s required as there’s no free lunch in the general setting and we should think about government and other formal social institutions as economic goods when thinking about funding. The other side of the view is taxes as forced payments that are imposed and extracted in a largely unilateral manner by those with political power and in control of government–that the funds are largely used to fund the social institutions is not the core aspect defining “tax”.

          Depending on where you want to put the term “taxes” on that spectrum will greatly influence my response.

          • famadeo

            I’m familiar with the frame of the debate regarding taxes and I know that nothing in paricular can be inferred on the subject from this article alone. My question arises from sheer curiosity. But, nevermind. At this point it seems to have become rather pointless.

    • http://www.facebook.com/people/Russ-Tavares/506875834 Russ Tavares

      “high” is so relative, my argument always ends up being a moral one anyways: When is it right to demand someone’s money, backed by threats of violence or kidnapping? Would it be right if you were going to give it to starving orphans? I still say no. Taxation matches that criteria, and thus it’s wrong.

      • Hume22

        Russ, although I am sympathetic, I think you might be susceptible to the charge that you are begging an important question when you say “someone’s money”. One important point of contention is just who has a rightful claim to such money in the first place.

        • TracyW

          One of the key services that a government should provide is a system of determining who has a right to assets, when they are in dispute, such as when A accuses B of theft, or when a contract between A and B is unclear, or when the boundary of property rights is unclear (eg does a plane flying far above my land infringe my property rights, what is “fair use” of copyright?) or if an asset doesn’t have a clear owner (e.g. after a war no one can figure out who owns an some land as the records were destroyed.)
          If the government is doing such an incompetent job at providing this service that we don’t know whether Russ’s money is Russ’s money, it does rather undermine the argument that the government is providing the good things of life.

  • SimpleMachine88

    I think I owe society a debt, which is why I’ve decided to refrain from taxing it to death.

  • Sean II

    I’ve been hearing this argument since college. It makes me crazy. We have this wonderful means of parsing out the individual contributions in a productive enterprise, and it’s called the market. It tells us who did how much and what they got paid for it.

    Then some statists come along and remove from the market several important types of social activity, like education, road building, etc.

    Next they say: “Who can possibly calculate how much Steve Jobs benefited from having free schools and safe roads? Surely he owes a huge portion of his success to the state that provided such things.”

    Well…we would have known exactly what those services were worth, IF THEY HAD BLOODY WELL BEEN ALLOWED TO HAVE A MARKET PRICE!

    The same people whose idea it was to stop the price system from working for certain goods and services, cannot turn around now and argue those goods are services are effectively priceless.

    • Gordon Barnes

      On the contrary, the market is not “a wonderful means of parsing out individual contributions in a productive enterprise.” The supply of unskilled labor often outruns the demand for unskilled labor, and when that happens, then the market drives wages down to the ground. If there are thousands of miners in line for a job, then the mine owner can tell the miners “you will work for a bare subsistence wage, because if you won’t, then step out of line, and the men behind you will, in order to avoid starvation.” There is nothing “wonderful” about this way of determining wages. If you had ever been through this situation personally, then you would probably realize that.

      • MARK_D_FRIEDMAN

        The market is a “wonderful” way of parsing out individual contributions because it reflects what people are willing to pay for others’ services on a voluntary basis. Assuming that the mine owner did not steal it from its rightful owner, your example merely illustrates that you are unhappy with the pattern of holdings that emerges from voluntary transactions. Since you seem to be familiar with Nozick, I presume you are familiar with his powerful arguments against patterned principles of justice.

        • Gordon Barnes

          Nozick’s so-called “powerful arguments” were systematically exposed as fallacious in G.A. Cohen’s book, *Self Ownership, Freedom, and Equality* (1995), and then again in Serena Olsaretti’s more recent book, *Liberty, Desert and the Market* (2004). You should read both of those books. Olsaretti, in particular, has shown that free markets do not maximize voluntary choices. When an unskilled laborer accepts a demeaning, exhausting, underpaid job because he has no acceptable alternative to it, he is not acting voluntarily in any reasonable sense of the term. He is taking this job because he has no acceptable alternative to it, and that makes his choice involuntary. Think of it this way: rather than pay taxes, you could choose to go to prison. Does this alternative make your paying taxes “voluntary”? I wouldn’t expect you to think so. No, paying taxes is involuntary for you precisely because you have no acceptable alternative to it. Well, by the very same token, the unskilled laborer who takes an underpaid job because he has no acceptable alternative to it is also acting involuntarily. So free markets do not protect voluntary action, at least not for those who are forced to sell their labor because they own no means of production

          • http://www.facebook.com/sam.grove Sam Grove

            “He is taking this job because he has no acceptable alternative to it, and that makes his choice involuntary.”

            Irrelevant. Being born and living is involuntary. Just because someone needs sustenance is no justification for enslaving others.

            Olsaretti is wrong.

          • MARK_D_FRIEDMAN

            I am quite familar with Cohen’s arguments and those of his intellectual heirs, and in fact discuss them in my book Nozick’s Libertarian Project: An Elaboration and Defense (Continuum, 2011). Suffice it to say that Cohen not only does not demolish Nozick’s arguments, he fails to even get them right. He erroneously concludes that Nozick’s ethical foundation for libertarian rights is based on self-ownership, instead of the special moral status due person’s as rational agents. I don’t, however, propose to engage in a long and fruitless debate with you here, but will simply note with respect to your specific point that you are conflating two entirely different senses of “voluntary.”

      • Sean II

        If you’re talking about the scarcity of jobs from the point of view of unskilled job seekers, now that is something for which the state can claim all the credit it wants.

        Take the least skilled worker you can imagine, and think about what he might do for work. Think about what you might hire him to do, and how much you might pay him for it.

        Got a number in mind? Okay, great: now tell me if it would be legal to hire that man where you live.

        • Gordon Barnes

          I have no idea how this argument is supposed to go, or how it responds to my point. The problem is that an overabundance of unskilled labor puts employers in a position to pay people far less than what they deserve for their contribution to the finished product, at least by any reasonable standard. Now, what is your reply to this point?

          • Sean II

            My reply hinges on how you answer the question I put to you.

            In the course of answering, you might also explain how you propose to determine “what [workers] deserve for their contribution to the finished product, …by any reasonable standard.”

            Because if you’ve got a reliable and objective way to do that, it’s easily worth a nobel prize in economics.

          • Dan Moore

            Gordon Barnes, you have it wrong, just as Marx had it wrong > 150 years ago. You look only to the immediate and seen consequences of a temporary disruption to employment in a single location. I don’t dispute that there may be unfortunate consequences for those immediately impacted by such disruptions. But over time and place, capital holders are not free to pay any low wage they want. They must pay the market price for whatever skills they seek to employ, lest these skills be hired away by other capital holders. If you don’t believe me, then answer this: why do the vast majority of people in the U.S. make much more than the mandated minimum wage?

          • MARK_D_FRIEDMAN

            “Less than what they deserve…” Really, are you serious? Are you God? How the heck do you purport to know what people deserve? Do you look into their souls? Maybe we should solve all our problems and appoint you king so that you can dole everything out based on people’s merits.

          • http://independent.academia.edu/DannyFrederick Danny Frederick

            There is only an overabundance of unskilled labour if the market is being prevented from working, for instance, by minimum wage laws which hold the price of such labour above its market value.

      • http://www.facebook.com/sam.grove Sam Grove

        I’m sorry to be the bearer of this news, Gordon, but your comprehension of markets and economics is lacking.

        The contribution that people make in the market is only worth what other people are willing to pay for it. You do not get to be the dictator of what any individual’s labor is worth to other people. If I dig a hole in your front yard, what is it worth to you? It depends entirely on whether you WANTED the hole in your yard and we had agreed to the exchange.

      • Old OddJobs

        So, there are some men who want a job. They go to a man and ask him for a job. He says no.

        Is he more of a bastard when he tells them to go away, or when he offers them a job that will keep them alive?

        Can he afford to hire every last one of them?

  • TracyW

    Another problem: Whose life would be the most nasty, brutish and short in a state of nature? A healthy charismatic 30 year old in both mind and body, or that of someone severely disabled? This principle implies we should be taxing the disabled more than the able. Which is problematic as the more disabled you are, the harder it is to earn large sums of money.

  • huh

    Cntrl + F ‘Crito’ gives me 0 results.

    What gives, BHL?

  • Pingback: On Quoting Out of Context and the Right-Wing Smear Machine | Bleeding Heart Libertarians

  • Gordon Barnes

    This is one of those cases in which a watered-down, compromise version of a particular argument is much weaker than the original, more radical argument. The original argument here is that everything that “you produce” was actually jointly produced by society as a whole, and there is absolutely no way to disentangle the effect of your individual effort from the role of society as a whole in producing the finished product. Therefore all talk about “what you did” or “what you produced” is pure nonsense. The usual response to this argument, going back to Nozick, is to appeal to one’s marginal product as defining one’s own, individual contribution. But the obvious problem is that even one’s marginal product — the difference that one makes to the finished product — depends on the exact nature of society’s contribution. If society’s contribution had been different, then one’s marginal product would also have been different. The significance of this is that the very idea of “what’s mine because I produced it” is either unintelligible, or at least normatively irrelevant. So how is this relevant to Obama’s argument? Well, if Obama had stuck with the original argument, instead of the watered-down version, then he would have said “Stop bitching about people taking your money through taxes, because there is no meaningful sense in which it was all ‘yours’ in the first place.”

    As for your other complaints, if one gives most of what one earns to charitable organizations for relief of global poverty, then one will wind up paying little or no taxes at all. So it seems to me that the current system allows one to pay one’s debt to society through aid to other parts of the globe.

    I have some other thoughts here, but I’ll leave it at that for now.

    • http://independent.academia.edu/DannyFrederick Danny Frederick

      ‘all talk about “what you did” or “what you produced” is pure nonsense.’

      I think ‘pure nonsense’ is a bit strong, but I think your point is largely correct. However, we can distinguish what belongs to a person by right; and this avoids all dubious attempts to identify the distinct physical/causal contributions of a multitude of factors each of which is more or less a sine qua non of the finished product. The question then becomes what initial allocation of rights, and mechanisms for waiving, forfeiting, abandoning and transferring rights, is the most propitious. For the sorts of reasons put forward by people like Hayek, Popper, Nozick, Friedmans (M and D), Olson and others, I think the answer is: as close as we can get to total privatisation and free market anarchy.

      • Sean II

        Gordon confuses a problem of measurement with a problem of metaphysics. Just because it’s difficult to list every individual contributor to a product, and precisely specify the extent of their contribution, does not change the fact that every product was produced by a number of individuals, each of whom contributed a precise amount.

        The market solves this measurement problem by saying: 1) only products with subjective value to voluntary actors count as products, 2) only producers who voluntarily took part in the production process count as producers, and 3) the extent of each producer’s contribution can be measured by the price he required for his participation.

        So imagine a pizza maker who earns $10.00 per hour and makes 5 pizzas per hours that sell for $10.00 a piece. He can say “I produced that”, and what he means in fact is “I produced $2.00 of that pizza, which was worth more than $10.00 to the person who voluntarily bought and ate it.” Given that we are talking about social interactions, that is quite amazingly precise when you think about it.

        The fact that it becomes more complicated in larger scales enterprises doesn’t change anything except the complexity of that calculations.

        • http://independent.academia.edu/DannyFrederick Danny Frederick

          Hi Sean,

          It makes a nice change to disagree with you.

          It seems to me of doubtful sense to say that a particular person contributed a precise amount to a particular product. One problem is: how do we measure the product? In money terms? In physical terms? In consumer-satisfaction terms? Another question is where the product ends. There may be people watching the pizza maker who enjoy seeing his performance and derive satisfaction from the look and smell of the pizza, even though they are not buying it. Does their enjoyment count as part of the product? They might be willing to pay for it. Does their enjoyment count as part of the product only if they do pay for it? Another problem is what counts as a contribution (Gordon’s problem). It might be, for example, that it was the pizza maker’s best friend who suggested that our pizza maker go into that line of business. Without that friend’s suggestion, no pizza; so the friend seems to be a contributor. What is the precise amount that his contribution added to the product?

          What markets do is enable us to bypass all these questions. All that matters is who owns what, how much is he prepared to accept to give it up, how much are others prepared to pay for it, and how easy is it for buyers and sellers to contract? What each person gets for his contribution then depends upon what he can negotiate for it. That is what he has a right to. In a properly functioning market, each gets what he has a right to. He might also get more, if others give it to him voluntarily. Whether, in some eschatalogical sense, anyone gets what they deserve, is a question for scholastic or mystical navel-gazers.

          • Sean II

            After reading your comment, I’m not sure we really do disagree.

            Questions like: “What about that mysterious man at the library who recommended that book on basic science to Jonas Salk when he was ten years old? We might not have had a polio vaccine without him. Doesn’t he get some of the credit?
            The answer is: metaphysically, yes (or probably yes). In terms measurable by the market or any other method we have, no.

            But if you were, say, an omniscient god capable of knowing all the causes that go into a given effect, then you would know the precise extent of that man’s contribution. The problem is simply that we don’t have such knowledge.

            And here’s why I think we agree: just because we can’t measure the precise amount of anyone’s contribution to the production of goods and services, it does not follow that everyone alive owns an imprecise share of everything there is. And it REALLY does not follow that people like Gordon or Barack Obama should have the right to guess or decide what that share is.

          • http://independent.academia.edu/DannyFrederick Danny Frederick

            No, we still disagree (though nothing much hangs on it, I think).

            I don’t think an omniscient God would know the precise extent of each person’s contribution, because there is no such thing to be known. Go back to the man, call him ‘Fred,’ who suggested that our pizza maker take up that particular career. Now look at the latest pizza produced by that pizza maker. What is the precise amount of Fred’s contribution to that particular pizza? How much, exactly, of the content or value of that pizza is due to him? Perhaps I am wrong, but those questions strike me as daft.

            I do agree with you that the answers to these questions, or the fact (if it is a fact) that they can have no answers, has no bearing on who owns the pizza, or how much of the pizza is owned by whom. The question of ownership is about rights, not about historical causes, not about deserts and certainly not about needs. This, I think, is an important point. No one should give a damn about anyone’s opinion as to whose labour is really ‘contained’ in products. Such opinions are not only daft in themselves; they are quite irrelevant to who owns what, or to who should own what.

          • Sean II

            An inconsequential disagreement it is, then. Although I do still think there’s an interesting thought experiment to be had here:
            Let’s say there was an omniscient god who could track all the units of value generated by all the actions of all the people who ever lived. Certainly he would know things we don’t know about value (a’la Bruno Ganz in “Wings of Desire”). He might even know that a man experienced more happiness watching a pizza maker skillfully flip dough than the man who paid for and ate the pizza.
            But would he for that reason find the market to be flawed? Would he say: “Curse your system of voluntary exchange! That pizza maker deserves to be paid more, and the spectator who enjoyed watching him work must be the one to pay him”? Would he further say: “And not just the pizza maker deserves to be paid, because the grace and skill of his movements is owed in turn to the chef who trained him”, and so on through an infinite regress?
            Or would he say: “Amazing is the market, for it pays those who choose to make their effort conditional on payment, and it allows those who are paid to buy such values as can be sold, but beyond even that, it creates so many accidental benefits and and so much unintentional cooperation that only an omniscient god can sort them all out”?

          • http://independent.academia.edu/DannyFrederick Danny Frederick

            I don’t want to be mean-spirited, but I don’t think the thought experiment makes sense. It would make sense if value were like energy, which is transferred from one body to another and can, in principle, be measured (at least at the macro level). But if I make something that is valuable to someone else, it is not the case that value passes from me into what I make. The thing I make has one value for one person, a different value for another, and so on. It can even have both at the same time, where some aspects of the good are ‘public’ (like the look and smell of a pizza). So how much value it has depends upon accidental circumstances, like who happened to be around when it was produced.

            Of course, God knows all this (if he exists and really is omniscient). So He would say: privatise everything! let markets rip! get rid of the state and its infernal taxation and regulations! kick all the Marxists out of academe and let them do the ‘real jobs’ that they like to talk so much about!

          • Sean II

            But that’s just the point. Of course value is subjective and of course it is impossible to make interpersonal comparisons of utility. That’s what makes it so blindingly incredible that anything ever managed to measure value as well as the market has. True, it can only operate above the threshold of voluntary exchange negotiable in prices, but once above that threshold what it does is truly amazing.

            Compare that with, say, the extreme difficulty of trying to guarantee an evening of decent table talk between six guests at dinner. In principle it should work out so that everyone gets some measure of enjoyment from the thing, but even among long established friends, that is rarely the case. Someone always ends up bored, jealous, perturbed, or left out in the conversational cold.

            The intuitive thing would be to expect that those six friends will coordinate their efforts better than a bunch of strangers using prices in the market, because the friends come much closer to knowing each other’s subjective wishes. But that is not what happens.

          • http://independent.academia.edu/DannyFrederick Danny Frederick

            I think we might be stumbling over words, particularly ‘measure value.’ I am saying that market prices do not measure value: a good with one market price may have different value for different consumers and some of these different values of the good may even be realised at the same time if the good has some aspects which are ‘public goods.’ You agree with this. But you still want to say that market price measures value. That must, then, be in a different sense of ‘value.’ What sense is that? Price, I think.

  • Pingback: Some Links

  • Gordon Barnes

    Jason’s post certainly poses a good challenge: why should we think that one’s debt to society is a debt to the nation-state? The beginning of a good answer would be that, at least ideally, the nation-state is the agent of society as a whole. So by paying the nation-state, you indirectly pay the society to which you belong. Now, there are lots of problems to be addressed here. For one thing, I believe that in class-divided societies, the state is often little more than the coordinating committee of the ruling class. In that respect, there are points on which I actually agree with some of the people on this blog. However, I believe that the solution is for the lower classes to take back the state, not to abolish it. Moreover, I believe that the state in our society does some good things for society as a whole, even if its real raison d’etre is to coordinate the activities of the ruling class.

    • http://independent.academia.edu/DannyFrederick Danny Frederick

      “The beginning of a good answer would be that, at least ideally, the
      nation-state is the agent of society as a whole. So by paying the
      nation-state, you indirectly pay the society to which you belong.”

      Is this a joke? By paying money to the nation state we transfer resources to organised interests and fund regulations that make the bulk of the population, nationally and internationally, worse off. Even if the state WERE ideally the agent of society, actual states are far from ideal.

      Compare: ‘At least ideally, parents nurture their children and help them to develop into adults capable of leading fulfilling and worthwhile lives. Therefore, you owe a debt to your parents and you should be willing to pay it.’ Tell that to a person who cannot function properly because her parents subjected her to long-term sexual and other abuse.

  • Pingback: The Implicit Errors in Debts to Society Arguments | Bleeding Heart Libertarians » Bydio

  • Pingback: The Implicit Errors in Debts to Society Arguments | Liberty Report

  • Pingback: Target The Rich People Who Didn’t Earn Their Wealth, Instead Of Their Tax Rates – Smash Gadget

  • J

    The problem is that advanced technological capitalism has always been heavily dependent on the state (despite the attempts of the entrpreneurial class to think themselves self-made). The goods necessary for advanced capitalism are provided by the state and must be paid for. I see no trouble in saying that a person who has benefited in a given state should pay taxes to pay for the goods that state provides and the person enjoys. Sure, someone might feel they owe greater moral debts to another community (say an immigrant entrepreneur who was educated in Ghana), but insofar as he is an American citizen and his corporation is American, he is enjoying the benefits of all those state goods–goods which, as a citizen, he signed on to enjoy. He thus has a debt to the state. (Not to ‘society’, whatever that is.)
    How much of these goods the state should provide is the real question, and that is determined politically (as is the precise quantity of one’s debt to the state, ie. the level of taxation).
    But please people, let us stop pretending that there is such a thing as a ‘free market’ without a state; such an idea belongs to the realm of ‘ideal theory’; it is more fanciful than Plato’s Kallipolis.

  • Pingback: Debts to SocietiesTightWind | TightWind

  • http://www.facebook.com/miles.stirewalt Miles Stirewalt

    Let me see if, for the sake of debate, I can at least provide an honest representation of the “Debt to Society” argument by answering these objections. This essay takes factual responses to a debate over general policy ideas. More directly, the justification for “debt to society” is a general answer to the objection that taxes in general are immoral. Arguments over amounts, and which entities ought to charge taxes and from where are all separate questions. Moreover, I believe that the general obligation principle is better established in Thomas Paine’s “Agrarian Justice” where he mentions that
    The goal of a just society should be that the least of its members lives better than one would living outside of it. (Thomas Paine, Agrarian Justice). While this is a tougher standard to determine in the 21st century, It satisfies that if we are going to have a society, there ought to be some basic standard below which no one will fall and in other words, there is , in general, a just obligation to the nation state.

    To answer these questions posed in the essay, Let me take the position that stems from the philosophical position of taxation as repayment of a debt. To answer the first question, that of why the federal government. While this is satisfactorily put, the problem speaking, however, is that we pay taxes to local authorities as well. The just obligation to the feds is that the federal government does provide services. The same reason that a just obligation to the local authority is that the local authority provides other services. We can argue all we want about whether these services are good/bad, necessary or otherwise. None of it counters the general idea that there ought to be a standard below which no one should fall.

    On to the objection of why taxes, why not other contributions. I would like to see a workable standard by which contributions to the public good are measured against obligations, Something similar to the way the current tax code weighs volunteer time and monetary donations against tax obligations.

    And on to the failure of the general justification argument to lay out rates, and I think more importantly, why a progressive tax structure. Certainly a simple (if flat) tax code could meet these philosophical obligations. (i.e. Gary Johnson’s plan of consumption tax rather than income). However, saying that the “debt to society” argument does not identify amounts, is just a simple straw man fallacy. If asked directly, an interlocutor positing the “debt to society” argument, may well have separate justifications for a complex (and/or progressive) tax structure.

    Finally, on the idea of coercion and other forceful means for paying an obligation. But think what the idea “paying societal debt” actually means. Making that argument means that all members of a society have a just claim of inheritance by right of birth. I was born in the U.S. and therefore have a birthright claim to U.S. society. But since one could not fathomably design a perfect system by which I receive the exact value of my inheritance claim, we designed a government which could hopefully pay that claim by providing an acceptable sense of security and standard of living.

    • http://blog.monstuff.com Julien Couvreur

      “… if we are going to have a society …”

      There is an underlying premise in this entire line of reasoning, that there is “_a_ society”.

      In fact, there are many societies, which overlap in complex ways. The idea of imposing a monopoly structure or social identity carries with it the seed of coercion.
      I feel that framing children’s identity in statist concepts (country) is one of the main achievements of public education. But you don’t have to accept it. I feel I am a member of many societies and a civilian of the world.

Set your Twitter account name in your settings to use the TwitterBar Section.