It Is Dangerous to Be Right When the Government Is Wrong - Andrew P. Napolitano [129]
This reveals taxation for what it really is; simply another form of majority rule cleverly disguised as government initiative, by which one group can live off of another. That this system of taxation simply functions as another instrument of factionalism and wealth transfer, should be clear.
A similar tendency can be seen in long-term changes in American tax rates. Income tax burdens on both median-income families and the highest earning 1 percent (who possess the greatest amount of political power relative to their numbers) have declined since 1960, whereas tax rates on relatively high-earning individuals have risen. How could this be anything less than one tax bracket (i.e., socioeconomic class) waging war on the other vis-à-vis the political system? Whatever happened to the principle that government is not supposed to recognize castes? Is it any more sensible to have a rule that you can recognize castes, so long as the better-off castes are treated more harshly? The Declaration of Independence (codified as federal law, no less) says that “all Men are created equal,” not “all Men are created equal in civil, but not economic, matters.” This was no mistake. It is no more fair or equitable that a majority could live off of a wealthy minority, than a minority of feudal lords could live off of the labors of a majority of vassals. And today, 47 percent of American households do not pay any income tax.
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Breach of the Social Contract
The justification for taxation is typically that, as part of the social contract, we agree to pay money in exchange for governmental services. If, however, some sort of contract exists between the government and the individual to pay taxes, then it is fitting to analyze it in light of other contract principles, particularly the common law requirement that contracts entail a bargained-for exchange, be made by willing parties, and must have good faith at their essence. Certainly, the government shouldn’t be exempt from these rules, which centuries of legal history have taught us are necessary for an agreement to be fair and just. If the government were exempt, then that would itself be an open admission that the social contract is neither fair nor just, certainly a conclusion which critics of libertarianism would be loath to admit. Any contract, as to which a contracting party lacks good faith and voluntary choices, is no contract at all.
In essence, the social contract argument says that we agree to pay taxes in exchange for government services, such as defense, roads, and insurance against times of hardship (in the form of welfare); a sort of quid pro quo between the government and the individual. In support of the fairness of this exchange, critics say that if one were to reject it by refusing to consume any government services, life would be unpalatable indeed. One could not use roads, enjoy the protection of the police; not even use money to pay for goods and services. And surely we also benefit indirectly from other forms of spending, such as grants to universities to research and develop socially beneficial technologies. Let us pick apart this argument piece by piece.
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One of the central features of contract law is that there needs to be a bargained-for exchange, or in other words, that we are getting something in return for what we give. What is the purpose behind this requirement? It is simply not fair to compel someone to give something up when he is getting nothing in return. It is a hopeless myth that we receive governmental services proportionate to what we pay in taxes. Consider parents who choose to send their child to private school, or the majority of Americans who are not parents