January 27, 2003
WE HOLD THESE SUGGESTIONS TO BE UNEVIDENT AND NON-BINDING:
Tax travesties: Bush is wrong: It's not "our money" (Liam Murphy and Thomas Nagel, 1/26/2003, Boston Globe)The persistence of the idea that the distribution of tax burdens can be fair or unfair in itself stems from a very natural, but mistaken, picture of the relation between taxes and property rights: According to this picture, we own our pre-tax income, so in taxing us the government takes away some of our private property to pay for its activities. But in fact we don't own our pre-tax income, and what we do own is defined by a legal system of private property in which taxes play an indispensable role.This claim may seem outrageous, but a little reflection shows that it must be so. Notice that we couldn't, as a matter of logic, have unrestricted property rights in the whole of our pre-tax income, because without taxes there would be no government, and consequently no legal system, no banks, no corporations, no commercial contracts, no markets in stock, capital, labor, or commodities-in other words no economy of the kind that makes all modern forms of income and wealth possible.
Modern property rights are not part of nature. They are created and sustained by a legal, political, and economic system of which taxes are an essential part. This doesn't mean that everything really belongs to the government, except what it decides to give us. What it means is that property rights in a modern state, including the division between private and public property, depend for their existence on a legal system that does not and could not assign full property rights in pre-tax income. What we own depends on how we and others interact in the context of that system, and our private property is what we end up with after taxes, not before. Whether the result is fair depends on the legitimacy of the overall system, and we are collectively responsible, as a society, for the rules of that system.
Rights of private property are extremely important. In addition to playing a vital role in the working of the economy, they are as central to personal liberty as freedom of speech or religion. People need to be secure in the possession and use of what is theirs, protected both from theft and from arbitrary expropriation. But there remains the question of what forms modern property rights should take, and what legal rules and economic policies should determine their formation and transmission. John Locke, in the 17th century, argued that a man has natural rights to the fruits of his labor on unowned land, even in the absence of government. But even if such primitive natural property rights exist, they hardly correspond with anyone's right to shares of a mutual fund. Modern property has to be legally defined.
So, the right to be secure in one's own property is one of the central purposes for which men constitute governments but that right doesn't precede those governments? How does the fact that we voluntarily surrender some of that property in order to fund that subsequent government get transmuted into a requirement that we come, hat in hands, before that government for a determination of how much of our property we get to keep? Posted by Orrin Judd at January 27, 2003 9:27 AM
The government is the source of rights and can taketh what it giveth. This, I believe, was the creed of Adolf Hitler as well as Murphy and Nagel.
Posted by: pj at January 27, 2003 8:53 AMAt least they are admitting the importance of property rights. And who says there's no such thing as progress? I fully expect that within the next 300 years, the Globe will print something with a favorable reference to Milton Friedman.
Posted by: Jed Roberts at January 27, 2003 9:34 AMYes - I will give them that too. I think they are confusing the need for social agreement on who has what rights, which we develop through a political process in which government is the leading participant, with the source of those rights. That government can adjudicate hard cases and enforce agreement is different from saying that the government can rearrange rights however it wishes.
Posted by: pj at January 27, 2003 9:41 AMDo these guys believe their own nonsense ? This must be the ultimate marxist travesty : "yes, property rights are important, except that they don't really exist". I guess they have consumed to much opium for the elites.
Posted by: Peter at January 27, 2003 9:43 AMI'm sue if we nationalized the states, of most of the Hollywood gliteratti,
the Graham & Sulzberger clan, the
Turners, and a passel of others, we
could find some money for health
care, schools, homeland security;
Hey, what's good for the goose. . .
Wow! I am actually stunned by the stupidity and bad-faith of this article.
Posted by: H.D. Miller at January 27, 2003 10:46 AMH.D.:
It's the Globe and they're Ivy League professors--what's to be stunned about?
JFK didn't pay any taxes, or very little. He put all his inherited assets in tax-free municipals. I'm sure these two Boston jokers despise him for it, too.
Posted by: Harry at January 27, 2003 1:21 PMTheir argument doesn't really make sense and seems to put cart before
horse. There certainly seems to be a logical inconsistency in arguing
that because something (government,legal system,stock markets etc.)
depends on tax income (i.e. a portion of our income taken) then this
tax income is therefore not actually ours!
I wonder if they are LSE alumni?
Cheers,
Alastair
There's another flaw in their argument: If it is true that "[w]hether the result is fair depends on the legitimacy of the overall system, and we are collectively responsible, as a society, for the rules of that system," then it follows, ipso facto
, that there cannot be anything illegitimate about elected representatives (or in this case, the elected President) choosing to not take as much of that property to define what that property should be.
It also seems self-evident that the assertion "the legal system, including the tax system, determines what "our money" is" strikes too broadly. The government may establish and maintain a system of exchange and credit, to be sure; but to argue that money, i.e., the means of transaction, cannot exist without a government to create it, overlooks the vast majority of humanity's history.
And of course, they're making a heck of a logical error here: They're conflating the government's ability, and duty, to regulate and protect property (to varying degrees of each) with the creation of property, or at least the creation of possession. It stuns the mind to believe that should I, with a crudely manufactured club, take hold of a cave and call it "mine," killing all who would try to take it from me, and asserting to all the world that I possess it, a non-existent government is nonetheless the author of property rights.
Their initial point is a good one: But for a protective and fair legal system, a market economy, and a credit system based at least in part on the pledge of protected property by the government, simply cannot be. But from that first premise they follow to a broad series of logical errors, even within the faulty foundations of their own reasoning, of which two professors should be ashamed.
I've been reading this drivel for many, many years. Karl Marx, John Rawls, it all runs together. Look, the strong, the rich, can defend themselves and their property by private force. Property does not need the state to exist, it needs weapons, which it may buy. The state's protection of property redounds to the benefit of all, the weak as well as the strong, and furthers the general welfare by promoting prosperity. Go read Leviathan. Pinkoes are dumb, but we knew that.
Posted by: Lou Gots at January 27, 2003 5:45 PMMilton Friedman on line 2...he'd like to have a word with Murphy and Nagel...
Posted by: Matt at January 29, 2003 5:55 AMMilton Friedman on line 2...he'd like to have a word with Murphy and Nagel...
Posted by: Matt at January 29, 2003 5:55 AM