Tuesday, 26 October 2010

Tax as theft

It appears that many people are glad that some people with bank accounts in Switzerland have now successfully been taxed. These 'money grabbing millionaires' might even be taxed retrospectively; these bank accounts do not break any laws in either the UK or Switzerland (or Lichtenstein, which has already given in to the UK's demands). I just wonder, how much good will that money do in the hands of a government which aims (like with all tax) to take the money with force compared to what the people saving with Swiss banks would. The government has already invested large sums of money to work out how much money they might be able to grab, they have also had to spend money talking the Swiss and Lichtenstein governments into giving up a large source of revenue in their economies. How much good does this do anyone? It gives the British government a bit more money (a drop in the ocean of total tax revenues) to waste on ideas on how politicians can 'design', it seems apt to quote Hayek here:

“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design”.

Why is the arrogant ideal that you can design how a nation should be so prevalent among the political elite? Do they imagine that they can all understand the immense intricacies of an economy of over $2 trillion and the individual whims of over 62 million people? Surely not? Virtually every penny a government spends will be, in some way, to design the system to their liking. How can someone know what will be the best system for all of these people? The only way to deliver it is to see what people would actually spend their money on. This means no taking and spending money from and for people, let the people themselves decide what they want, let them spend money how they wish. The only reason anyone would use a bank in a 'tax haven' is because the taxes in their own nation are obscene in scope (unless of course they lived in a tax haven). Remember, the interest earned in these accounts comes from investment across the globe, creating new jobs where they are actually needed.

So what is tax anyway? Theft. Pure and simple. If you don't pay tax, you go to jail, either that or you have money taken from you illegally and retrospectively. There is no option, no choice. If a business attempted to implement a sort of tax in a region of the UK they would be shut down and anyone directly involved would be convicted for extortion. There can be no denying this. Tax is extortion and theft. The term tax is just a euphemism for theft done by the strongest party, the group with the biggest guns or the most thugs (or with God on their side; see Romans 13). It is only because governmental groups have been able to extract tax from the populace for so long that the idea of a duty to pay tax has arisen. Naturally an individual will spend their earned money in a way to benefit them best or how their morals dictate, this spent money then goes to other people in other sectors and countries who will do the same, benefiting everybody. Taxation withdraws money from this cycle. The money can be spent to go back into the system but this gives no advantage to having individuals do it themselves as the government effectively acts as a collection of individuals. But not all of the money gets that far. Somehow the guns and prisons (or other methods of extracting money through force) need to be paid for. This expense and the expense on their implements means that money is taken out of the system for no useful purposes. How does the individual gain from this force? Where else does the money go? On the attempts to design some perfect system - futile attempts that almost exclusively go to waste and lead to inflation.

So yes, tax is theft and hurts more that it helps. Whilst you can engage in jealous ramblings if you wish, do so without stealing money from the people who worked to get it.