Claiming that taxation is theft is an effective way to signal that you think of yourself as a libertarian of the more radical, uncompromising, and possibly more Rothbard-inspired sort. But are there substantive reasons to endorse the slogan? It is easy to point at differences between taxation and theft, after all: Taxation is widely regarded as legitimate, taxation is expected, institutionalized and to some extent automated, (at least some) taxation is put to good public use, etc. More sophisticated defenders of the “taxation is theft”-slogan will not deny these differences, though; they will concede that theft and taxation aren’t the same in every respect. Instead, they will explain that the fact that taxation is legal is morally irrelevant, and that taxation and theft are thus on equal footing in one important respect: they are both coercive takings of property and as such pro tanto morally wrong (see for example Michael Huemer’s defense of the claim that taxation is theft here and here).
Obviously, legal conventions determine people’s legal property entitlements. But it is less obvious what role legal conventions play for people’s moral property entitlements. In the following, I will try to sketch a trilemma for libertarians who endorse the “taxation is theft”-slogan, arguing that none of the three basic positions one can take on the role of legal conventions supports their cause.
A (pure) conventionalist position is that people’s moral property entitlements are simply determined by whatever legal property entitlements are conveyed by the law. That position is quite implausible in its own right (surely there are at least moral criteria that legal property conventions should meet to be morally justifiable), and of course it doesn’t help to make sense of the “taxation is theft”-slogan. If moral property entitlements were simply determined by legal conventions, then the fact that taxation is legal would imply that what we morally own is what we own post-tax. Obviously, conventionalism is also not a position many libertarians will be drawn into.
An anti-conventionalist position is that people’s moral property entitlements are determined by natural, non-conventional criteria (i.e., principles of just acquisition and just transfer, as in Nozick’s entitlement theory of justice). Legal conventions may at best have a minor role to play in specifying what is left vague and indeterminate in people’s natural property rights. This position lends some support to the “taxation is theft”-slogan: If the only morally relevant role of legal conventions is to carve out the more precise specification of antecedent natural property rights, and if that may be done without taxation, then the fact that taxation is legal is morally irrelevant and all infringements of natural property rights are morally on a par, no matter if it is state agents or non-state agents that engage in them.
The problem, though, is that the anti-conventionalist view arguably implies that almost all of today’s legal property entitlements are morally void (compare Twin Nozick in Loren Lomasky’s article and Matt Zwolinski’s related discussion at Bleeding Heart Libertarians). After all, hardly anyone can claim to own property with a clean record of title transfers going back to a just acquisition from the state of nature. I don’t even know how to look for such a record for all the materials that are built into my laptop, for example. If that means that I don’t really own it, from a moral (natural property rights-) perspective, then taxing my purchase of it can also not count as an infringement of my moral property entitlements. In other words, while the anti-conventionalist position in principle makes sense of equating taxation and theft, it can depict neither taxation nor theft in today’s societies as a violation of moral property entitlements, simply because all (or most) claims to property would be morally suspicious. This is an implication most “taxation is theft”-libertarians will not be willing to endorse.
The most plausible view is a mixed view about the role of legal conventions. On this view, there are moral standards for legal property conventions (they must be something useful for us, after all), but at least when a basic moral threshold is met, then legal conventions do determine pro tanto moral property entitlements. This quite plausibly explains why it is morally wrong to steal even in the non-perfect societies we are living in, where most property titles can’t be proven to have a clean track record going back to an initial acquisition from the state of nature, but where property conventions may well be taken to meet the basic moral threshold, while having considerable room to improve in many respects.
Of course, there is a wide range of views one could take about what exactly the moral standards for legal property conventions are and where the basic moral threshold is to be set. But, just to have some criteria on the table, arguably property rights should be conveyed by well-defined and transparent rules, they should give owners sufficient control over what they own, they should be properly enforced, violations should be properly rectified, and they should be in line with broader moral principles, like, for example, equality before the law. It is also plausible that principles of just acquisition and just transfer should be incorporated into legal conventions, such that, for example, somebody who creates something valuable from something she legally owns should also own the creation (because creating or adding value to something should be taken to ground property entitlements).
But whatever the moral standards for property conventions may be in detail, on the mixed view taxation cannot be equated to theft. The fact that the former is legal, while the latter is not, is of moral relevance. What moral property entitlements people have will depend on legal conventions, at least as long as these meet the basic threshold, and in our societies taxation is part of these legal conventions. What people morally own will thus be what they own post-tax – but not post-theft. Obviously, this should not be confused with an “anything goes” position about taxation; one can evaluate and criticize different tax policies in light of the moral standards property conventions should meet, of course, even after the basic moral threshold is met (see also Andrew J. Cohen’s related discussion at Bleeding Heart Libertarians).
Some libertarians may say that no system of property that includes taxation meets the basic moral threshold (according to their interpretation of it). But if this were so, we would get back to the problems of the anti-conventionalist position. If current legal conventions don’t meet the basic threshold, then neither taxation nor theft will violate moral property entitlements in today’s societies, since current legal conventions would fail to give rise to moral property entitlements. One cannot cherry-pick and accept the moral relevance of current legal conventions when it comes to the property titles they assign, but reject their moral relevance when it comes to taxation.
(Thanks to Andrew J. Cohen for feedback on a draft version).