The Economic Alamo

“And it came to pass in those days, that there went out a decree from Caesar Augustus, that all the world should be taxed.” – Luke 2:1, New Testament

“Since the beginning of recorded history, the business of government has been wealth confiscation.” – Ron Holland

It’s a common assumption that governments exist in order to serve the people of a country and that in order to do so, they must be accorded the necessary evils of power and taxation. I believe that the opposite is true, that in the perception of those who rule, power and the ability to exact tax are the very purpose of government, and service to the people is merely a justification for that pursuit.

This condition is perennial. Throughout history, rulers have maximised their power over their minions and, likewise, have exacted as much taxation as they have been able to get away with. Consequently (and quite understandably), it’s always been the norm for people to try to protect their wealth, however large or small, from confiscatory taxation.

Taxation is, of course, legalised theft. It is never collected voluntarily, as it might be with a charity or place of worship; it is taken by force. (If you don’t agree, try refusing to pay.)

Centuries ago, those who had acquired a measure of wealth might have hidden it under the floorboards or buried it in a field. However, over the last century, as long distance travel became increasingly possible, those who have possessed wealth have developed a more reliable method: store it in another country, one where the laws of confiscation are either not so rapacious, or—better still—don’t exist at all.

The Era of the Tax Haven Blossoms

Tax havens are not a new idea, but they didn’t come into their own until the 20th century—a time when they flourished. Deservedly, they’ve become increasingly sophisticated and serve their clients extremely well. So well, in fact, that they’ve become a threat to those countries (mostly much larger countries) that are oppressive in their tax regimes. Eventually, these countries joined together to form the Organisation for Economic Co-operation and Development (OECD), which, despite its euphemistic name, is charged with the dual goals of ending tax havens and creating forced equalisation of taxation in most of the world’s countries, whilst they allow the primary OECD countries to do as they please (to operate independently of the forced taxation equality).

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Richard S Stone 5 years ago Member's comment

It seems to me that this piece is just trite drivel. Governments are necessary, and one of the more necessary evils. Particularly when compared to some imagined and blissful state of grace, which generally refers to some Ayn Rand type of anarchy, mainly for the benefit of a few self-imagined Lords. Or oligarchs. Only a delusional Marxist would continue to believe in these modern times that Governments are going to wither away if they are somehow denied taxes. Of course, Somalia, among other places, is a good example of a "State" without an effective government, or one which has withered. Yes, taxes may not be organized there, and it does look a lot more like theft.

Is the idea of a "world" government a good idea, held in high regard by all mankind? Generally no. Different governments come with the idea of different experiments in terms of governance. As I recall, about two hundred years ago a certain group put forth the idea of no taxation without representation, which seems about as good as humanity can do.

Of course, the self-promotional kind of nonsense in the article is a good way to get clients for wealth preservation schemes, but otherwise it is a waste of bandwidth. Taxes as theft? Inefficient and ineffective governments? Politicians as thieves? Are these novel ideas?