Catholic Exchange posts an article discussing a battle in the EU over Switzerland’s low tax rates which are drawing many businesses to Switzerland away from higher tax nations such as Germany and France. Making brief mention of the economic implications of thise (Switzerland has a better business enviornemtn which will ultimately lead to a more prospoerous Switzerland), the author makes this salient point:
Missing, however, from this debate is any reflection about how to think about taxation in a morally coherent manner. This is not surprising. Even low-tax-inclined economists almost always consider taxation in terms of how governments can maintain their income while diminishing the effects on economic prosperity. In other words, their focus — rightly — tends to be on efficiency issues. Efficiency is not the same, however, as morality. In much of the world, discussion of the morality of taxes has been reduced to the mantra of equalizing incomes as far as possible. Factors such as merit and risk are given short shrift, especially in Europe.
Indeed, we need to return to sixteenth-century Spain to find anything like a rigorous discussion of the morality of tax rates. This was sparked by rising taxation, currency debasements, and official state bankruptcies initiated by King Philip II as he struggled to suppress rebellion in the Netherlands and ward off threats to Spain’s worldwide empire.
Reacting to Spain’s subsequent impoverishment, Spanish theologians such as Pedro de Navarra insisted that it was not enough for governments to legislate a tax for it to be considered just. Tax laws, they argued, must meet other criteria of justice. Was there a genuine need for a new tax? Were the proposed taxes proportionate and equitable? Were they moderate or excessive? The same scholars claimed that imposing taxes to support wasteful government expenditures was immoral, even tyrannical. In some cases, they added, people could rightly refuse to pay, especially when taxes were taking nations to the edge of financial ruin.
Instead of using morally charged language to declaim Swiss tax policies, perhaps some EU member-states might consider applying these criteria to their own tax regimes. It is hard to imagine that their high tax rates would survive such scrutiny.
The fact is, economic advantage is merely a supporting argument for low tax rates. It’s a “bonus,” so to speak. The most important reason to support low taxes is that taxation, by its very nature is theft. If theft is the act of taking something which does not belong to you, then what is taxation? Just because the government grants themselves the power to do soemthing doesn’t make it right. Neither legality nor might make right.
So, we have two counter balancing needs: the legitimate right of government to derive income from its citizens and the right of citizens to be secure in their property. We need to balance these two needs to make sure we find an appropriate balance. Before we propose any government spending, we need to keep in mind that it can only be financed by taking money from others. Legislators would do well to ask themselves this question before voting on each new spending proposal: “Is this worth stealing money of my, or my parents’ or my enighbors wallets?” Because that’s in effect what the government does whenever it spends.
As soon as we remember that all taxation is theft, we’ll achieve a more just tax system and governmental system.