Taxation is Theft?

This tweet:

brought back memories of writing my book. I’m never quite sure what to make of this claim.

It is something of a mantra for conservatives, including conservative politicians:

“There is no such thing as public money. There is only taxpayers’ money.”
  • Margaret Thatcher, speech to Conservative Party Conference, October, 1983.
“We know that there is no such thing as public money — there is only taxpayers’ money”
  • David Cameron, on the campaign trail, 6 April, 2015.

It is tempting to say that the mantra is simply false, because all money is ultimately created by the government: money is a creature of the state. If the mantra means what it literally says — that there is no money the state spends that it hasn’t first taxed from us — then it is not only false but impossible. We can’t create (non-counterfeit) money, so if the state couldn’t spend money without taxing it first from us, then there would be no money at all — neither “public money” nor “taxpayer’s money”.

But let’s suppose that when these conservatives say “money” they really mean “labour and real resources” — the things money ‘signifies’, as John Locke would put it. Well it is true, of course, that the state has no labour of its own; only human beings can labour. The state might, however, have resources that it didn’t take from ‘us’ — it might have claimed them before anyone else did. Still, the state clearly gets most of its resources from us as well.

Is this theft? No, because we get many things in return: public and common goods like clean air, safety standards, a healthy and educated population, etc.

The transaction is, however, coerced. We have to pay for the public goods the state provides, and it decides how much each of us pays. Is that all that the conservative mantra is pointing out? Then it’s true, but trivial. Public goods are only adequately provided when payment for them is coerced. That’s pretty much what a public good is.

The state can certainly misuse its power to coerce payments, for instance to provide private goods to those it favours. Once an institution has the power to coerce payments, that is always a possibility. But a society without coerced payments would be a society without common and public goods (I count things like the force of tradition as species of coercion). Life in that society would be solitary, poor, nasty, brutish, and short. Some people think they would prefer it, but I don’t think most really would.

So what point is the conservative mantra really making? Taken literally, it’s simply false. On a more charitable reading, it is true in a ‘so what’ way: yes, adequate provision of public goods means coerced payment. It’s what Daniel Dennett calls a “deepity”: a statement that is interesting but false on one reading and true but trivial on another. If you squint, you can blur the interest of the false reading into the truth of the trivial reading. Then you think you’ve attained some deep insight, but it’s a mere logical illusion.

I learned from Joan Robinson’s Economic Philosophy that economic ‘deepities’, though they convey no interesting truth, can serve a useful expressive function. Maybe all the conservative mantra adds to the uninteresting assertion is a whinge. Its complete content is:

(1) We need public and common goods, but that means we have to be coerced to pay for them.

(2) Waaaaaaaaaaaaaah.