The Problem With Vilifying Taxes
This article was inspired by Bruce Schneier’s 2012 book “Liars & Outliers: Enabling the Trust That Society Needs to Thrive”.
Hating taxes is as American as apple pie, right? No taxation without representation, the Boston Tea Party, the revolution! Since its inception, the United States has stood in stark opposition to its empires of origin, the autocratic European monarchies who abused their powers and taxed their citizens dry. With the onset of the industrial revolution, the United States became a capitalist haven where business has run relatively free and taxes remained relatively low (at least pre-World War I).
In modern times, opposition to taxes is closely tied to traditional American patriotism, and therefore closely tied to the conservative right. For many who believe the government should be as small as possible, an abundance of taxes leads to overspending, inefficiency, and wastefulness. This stance is not unfounded by any means; all levels of government in the United States continually prove to be horribly irresponsible stewards of our hard earned dollars. Of course, there are also situations where specific taxes are totally unjust and implemented for reasons other than fairness.
However, the vilification of taxes in general can reach an extreme. During the 2016 presidential election, then-candidate Donald Trump was applauded by many on the right for openly bragging about avoiding taxes because “he’s smart.” Though many Republicans stoke the public’s fears of the poor taking handouts while not paying taxes, in reality the biggest tax abusers are often the top earners. Large corporations evade taxes through intentional loopholes and wealthy individuals often have a more diversified income that is more easily hidden from the IRS. Cheering on these entities for dodging their duty to pay their fair share erodes fundamental societal values that we all rely on.
In any natural ecosystem, most organisms give back to the system in some way or another. The antelope eats the grass, the lion eats the antelope, and the lion becomes the grass; we’ve all seen the Lion King. Human society is no different. Those who benefit from the roads and security of society must give back in some way, and most often this is through taxation.
Even in natural ecosystems, though, there exist parasites; organisms that benefit from the system but don't give back. Again, human society is no different. Call them what you will - parasites or free-riders, these are the individuals who benefit from the trust and cooperation of society without giving back. They value their personal interests over those of the group. In prehistoric times, these were liars, thieves, and murderers. In Bruce Schneier’s book “Liars and Outliers,” he refers to them as defectors. Any ecosystem will collapse when defectors grow too numerous.
Defectors undermine the basic trust that allows humans to cooperate. Without cooperation, there is no commerce, no government, and no society. In response, we’ve evolved instincts to spot these types of individuals, and culturally we’ve built societal pressures to discourage defection. Morals, empathy, and reputations are simply social tools to push people away from self-interested defection. With governments, there exists the power to enforce laws and provide security: we raise the cost of defecting and make it as difficult as possible. It’s basic game theory, and we have to hope the societal pressures are enough to push most people towards cooperation.
Things get tricky when governments abuse their power to make people pay their fair share and that share becomes unfair. Things get even trickier when the society, in response, begins to vilify taxes. What happens when a society begins to oppose contributing to the system? Theoretically, it loosens the pressures on defection, which could lead to an overall reduction in trust and societal cooperation. To a degree, this is already happening in America, as evident in excessive greed and individualism.
Before I get ahead of myself here, I’m not suggesting that disliking taxes will lead to anarchy. I’m a college student on a tight budget, I probably hate taxes more than most. Nobody likes giving away their hard earned money and I’d be a fool to expect any different. But at the same time, we’d all be fools to think that voluntary charity would cover the costs of society, as some extreme libertarians have suggested. Given the choice to pay taxes, most people will act selfishly in the absence of extreme societal pressures. It’s human nature.
And that’s the point: as Schneier puts it, we need a balance between security and defection. Too much security and you have a police state. Too much defection and you have anarchy. To borrow a concept from Schneier, the problem with vilifying taxes is that it has the potential to slightly alter the metaphorical societal pressure dials in a way that encourages more defection. It provides a moral argument for why taxation is wrong, and why opposing taxation is acceptable. It makes us view tax dodging parasites in a positive light. It makes us view corporations who lobby for tax loopholes as smart businessmen.
Furthermore, taxes often act as an important tool to enforce cooperation in and of themselves. An income tax is just a simple tax for living in society, but a tax on pollution, for example, discourages behavior that directly harms society. A company can achieve lower production costs if it dumps its waste into a river instead of paying additional costs for safe disposal. However, that cost is pushed onto everyone else who uses that river. Externalities like these are another form of defection, and taxes can be used to make such behavior more expensive than simply disposing of the waste properly. It’s a market-based alternative to legislating and regulating business. In our effort to reign in wasteful government spending of tax dollars, we must be careful to not destroy the government’s ability to use taxes to protect society from destructive behavior.
It would be great if we had a government that was trustworthy enough so that people viewed taxes more favorably. But it will take time before we get there - and I’m not sure that’s a totally realistic goal anyway, assuming people will always lean towards self-interest. Instead, we must resist the urge to support defection. The vilification of taxes isn't pro-America and it’s not patriotic.
Though it sounds extreme, tax dodgers in modern society are equivalent to common thieves and parasites in a cooperative ecosystem. Unfortunately, our societal evolution has outpaced our biological evolution in that regard. In the meantime, we must hold our political leaders accountable for maintaining a respect for our duty to contribute. The public should absolutely maintain a skepticism of taxation in order to hold the government accountable as well, but no one should celebrate tax evasion. The Republican leaders who demonize taxes are only providing criminals the moral justification to take advantage of honest people paying their fair share.
Schneier, Bruce (2012). "Liars and Outliers: Enabling the Society Needs to Thrive"