“Thou shalt not steal” is the 8th Commandment. To steal is to take the property of another against his will. If theft by an individual is wrong can theft by government be condoned? Yes, but only under certain specific circumstances:
The government must be established by the consent of the governed.
The tax must be for a purpose authorized by the governed.
Our national and state governments have been established and maintained by the consent of the governed, but we must establish the purposes authorized by the Constitutional rule of law and only those purposes warrant taxation.
For the national government of the United States, the standard is the U.S. Constitution as amended and those laws that are allowed by the Constitution. In Georgia the standard is the Georgia State Constitution and those state laws that are allowed by the State Constitution. When there is a conflict between the national law and the state law, state law is superior except in those enumerated powers specified in Article 1, Section 8 of the U.S. Constitution with the sole exception being the delegation in the U.S. Constitution (principally in the Bill of Rights) of some rights directly to the citizens which preclude government at any level from infringing on those rights. Local governments only exist at the will of the state and as such may do nothing that is not delegated to them by the state.
The funding of government actions which meet all of the above criteria are legitimate and are not theft as they are authorized by the governed. Any government actions not consistent with any part of the above criteria are theft, wrong, immoral and legally unenforceable. Every citizen and every state has the moral right to refuse to pay any tax that is not properly authorized.
How much should we be taxed?
Taxation should only be in the amount necessary to accomplish the properly authorized actions. Those actions can be accomplished by:
3.3% local
3.3% state
3.3% national
9.9% total tax
The 9.9% being slightly less than the tithe is no mistake. We must individually and as a nation have proper priorities. Government at every level must be restrained so that only legitimate functions of government are performed. When that is done 9.9% will be plenty. If we limit taxation to this amount our individual and family budgets and our economy as a whole will benefit greatly.
How should we be taxed?
There are only two things that can be taxed: production (income) and consumption (spending). To tax something is to put a penalty on it. When a behavior is penalized there is a reduction in that behavior. Wealth for a nation, a state or an individual is what is produced minus what is consumed:
Production
-Consumption
Wealth
A decrease in production causes a decrease in wealth. Therefore, production should not be taxed. A decrease in consumption causes an increase in wealth. Therefore, consumption is the better source of tax revenue.
But the Biblical tithe was based on production and not consumption. Doesn’t God know best?
The Biblical tithe was based on the blessings of God. By tithing on production/income/blessings the individual is reminded of the grace of God that is the root of all love, truth and individual salvation. God does know best. His choice of asking for a portion of our increase is not a model for the collection of taxes by civil government. It is a reminder that all we have comes by God’s grace. Balance is provided by the tithe on production and the tax on consumption; grace balanced by force.
Any payments to any government (other than gifts) are taxes. Taxes may be specific or general. Specific taxes are in direct proportion to benefit received. An example is the stamp purchased from the post office. The post office should be eliminated (by Constitutional Amendment) but until then it is a properly authorized government function. General taxes are those collected from a broad base of taxpayers for a variety of uses.
General taxation, being the bulk of taxation, is what is at issue here. Having established that taxes should be on consumption all that remains is to determine which forms of consumption should be taxed. The ideal characteristics of taxed consumption are:
Broad base so everyone pays
If one person pays another’s share this redistribution of wealth becomes government-sponsored theft.
On the minimum basket of goods and services for efficiency sake
Waste is a form of theft.
On end users only as intermediate users are actually producers
No VAT (value added tax) and no tax on businesses.
Taxing corporations is especially destructive of individual and national wealth. Corporations do not really pay taxes; they simply pass the corporate taxation on to the consumer of their products or services. This transfer is inefficient and counterproductive. If the goods and/or services are consumed in this country/state the citizenry pays the tax as surely as if they were taxed more directly and efficiently. If foreigners consume the good and/or services it is even more important that we do not reduce that consumption by raising the price. When our local production is sold abroad we profit as individuals (through job creation), as corporations (through profits for owners/stockholders) and as a nation through a favorable balance of trade with other nations. The danger of a deficit trade balance is beyond the scope of this article.
Therefore we are left with taxing individuals on their purchases of goods and/or services. To tax both goods and services would be good in that it is more broad based but bad in that it is an inefficient taxing of a larger number of transactions. Since all citizens purchase both goods and services we need only tax one. Since purchases of tangible goods are more easily monitored and accounted for they are the preferred source of tax.
Therefore, a sales tax on tangible goods is the best tax. For simplicity, efficiency and protection from governmental limitations on our liberties the tax should be at the same rate and on all purchases of non-investment tangible finished goods. There is a temptation to set varying tax rates to encourage or discourage some expenditures. Social engineering is not the proper or Constitutional role of government and no class of expenditure should be preferred or penalized to accomplish such an end.
What about poor people? Surely we shouldn’t tax the poor!
Poor people are already getting an unavoidable and huge advantage in that they are taxed much less because they purchase much less. A good argument could be made that each person should pay the same number of dollars in taxes. It is imperative that we avoid the situation in which the poorest 51% of the electorate votes for whoever will steal from the most productive 49% to provide booty to those who are less productive. Aid to the poor is a moral responsibility of individuals, families and churches. It is not the role of government and government is not in a position to help the poor the way individuals, families and churches can. Government too often only enables the continuation of bad habits and choices without the accountability provided my local involvement.
What about real estate property taxes?
Real Estate should not be taxed. Property taxes make homeowners tenants of the government, subject to eviction for non-payment and thus not full owners.
What better way to recover from the Real Estate Depression than to eliminate real estate property taxes? Values would go up immediately as people would have all the advantages of ownership without the biggest disadvantage of ownership.
It would also create a greater incentive to own outright. Now you really can’t own outright because even if you pay off the mortgage you’ll still have an annual payment for taxes. As we become less leveraged in real estate ownership we are all less vulnerable to a market crash like we’ve had recently as a result of too much debt. That makes all of our society more secure, owners and renters alike, as our economy is more stable and jobs are less at risk due to drastic adjustments in the housing market.
To afford the elimination of property taxes we will obviously have to reduce the size and scope of government or find other sources of income for the government. The first choice is best but even if we have to increase the consumption tax what could be worse than taxing our homes and land?
Is this politically achievable?
In politics the best policy is often the enemy of good policy. We are in a situation today that is very destructive. If the best policy is not politically viable today we should attempt to move to something better than what we have now. The best politically expedient alternative on the horizon is the FairTax.
