A Carnival of Taxation.

• Author: HIGGS, ROBERT

Taxes are what we pay for civilized society.

--Oliver Wendell Holmes, Jr.

Au contraire.

--Robert Higgs

To determine whether a certain entity is a government, one might first ask: Does it have the power to tax? By this test, for example, the United States of America under the Articles of Confederation (1781-89) was not a government, because the confederation lacked the power to tax, whereas the United States of America under the Constitution (1789-) was a government, because it did possess that power. Critical minds might conjecture that getting the power to tax was, indeed, the principal point of the Framers' suffering through the hot summer of 1787 with the windows closed.

That certain people have the power to tax means, of course, that they will hurt you if you refuse to pay. The rebellious farmers of western Pennsylvania learned that lesson the hard way when they wilted under the weight of the armed forces mobilized by President George Washington in 1794. And a multitude of others accepted a similar "offer they couldn't refuse" during the ensuing two centuries. American governments may be lax in many ways, but tax collection is not one of them. In 1993 the Internal Revenue Service alone had 3,621 employees authorized to carry firearms and make arrests (Statistical Abstract of the United States: 1997, p. 214). In 1995 the federal courts alone convicted 866 persons of violating tax laws and sentenced 304 of them to prison terms (p. 217). State and local governments also work energetically to instruct their subjects in the causal relationship between paying taxes and remaining at liberty. Unfortunately, the Statistical Abstract does not report the number of Americans living in fear of the tax authorities because of offenses real, imagined, or trumped up.

Without doubt, the classic relation of subject and government is the payment of tribute in exchange for protection. All too often, however, the protection received by the taxpayer is exclusively against the violence of the tax taker. A question naturally arises, therefore, as to what distinguishes the government from, say, the Mafia, but that question raises issues much too delicate to be resolved here.

In the past century, Americans have endured nearly continuous political rhetoric about tax cuts, and occasionally taxes have been cut. But taking the long view, one sees that the cuts were relatively trifling and transitory (see figure 1). In an era marked by the rapid growth of national...