Taxation cannot be theft.

Most libertarians believe government taxation is theft, because according to them, government is taxing production.

The reality is different. Let’s look at an example.

Let’s say you are an apple grower. You have a large farm where you grow apples. Your production of apples is plentiful each year and you usually have more apples that you and your immediate family can consume. So you look to sell those excess production and earned $1000 selling them. Now the government comes in and taxes you $200, leaving you with $800. Is that theft?

Note that government is only taxing you the dollars you earned. It’s not taxing the apples you produced. You could produce all the apples you want and government wouldn’t care. It’s only when you make a trade and earn US dollars, that the government comes in to tax.

The reason you were willing to sell your apples for dollars is because you valued the dollars more than the excess apples you produced. You preferred to hold on to US dollars rather than the apples.

Lets look at it from the buyers standpoint now. Lets say I bought $10 worth of apples from you. When I purchased the those apples, I valued those apples more than the $10 dollars I had with me.

Note that the government is not taxing me for the apples I “earned” when I traded my $10 dollars. But the government did tax you for the dollars you earned by your trade.

So again the government doesn’t tax all earnings, it only taxes dollars that were earned.

So why does the government tax the dollars and not all production and earnings? Because the dollars are what the government produceses. By taxing dollars, the government is making sure those dollars have value and have purchasing power that you and I value.