The “nature of things,” I submit, is quite different. Government does not have an unlimited claim on the earnings of individuals. One of the foremost precepts of the natural law is man’s right to the possession and the use of his property. And a man’s earnings are his property as much as his land and the house in which he lives. Indeed, in the industrial age, earnings are probably the most prevalent form of property. It has been the fashion in recent years to disparage “property rights”—to associate them with greed and materialism. This attack on property rights is actually an attack on freedom. It is another instance of the modern failure to take into account the whole man. How can a man be truly free if he is denied the means to exercise freedom? How can he be free if the fruits of his labor are not his to dispose of, but are treated, instead, as part of a common pool of public wealth? Property and freedom are inseparable: to the extent government takes the one in the form of taxes, it intrudes on the other.
Here is an indication of how taxation currently infringes on our freedom. A family man earning $4,500 a year works, on the average, twenty-two days a month. Taxes, visible and invisible, take approximately 32% of his earnings. This means that one-third, or seven whole days, of his monthly labor goes for taxes. The average American is therefore working one-third of the time for government: a third of what he produces is not available for his own use but is confiscated and used by others who have not earned it. Let us note that by this measure the United States is already one-third “socialized.” The late Senator Taft made the point often. “You can socialize,” he said, “just as well by a steady increase in the burden of taxation beyond the 30% we have already reached as you can by government seizure. The very imposition of heavy taxes is a limit on a man’s freedom.”
But having said that each man has an inalienable right to his property, it also must be said that every citizen has an obligation to contribute his fair share to the legitimate functions of government. Government, in other words, has some claim on our wealth, and the problem is to define that claim in a way that gives due consideration to the property rights of the individual.
The size of the government’s rightful claim—that is, the total amount it may take in taxes—will be determined by how we define the “legitimate functions of government.” With regard to the federal government, the Constitution is the proper standard of legitimacy: its “legitimate” powers, as we have seen are those the Constitution has delegated to it. Therefore, if we adhere to the Constitution, the federal government’s total tax bill will be the cost of exercising such of its delegated powers as our representatives deem necessary in the national interest. But conversely, when the federal government enacts programs that are not authorized by its delegated powers, the taxes needed to pay for such programs exceed the government’s rightful claim on our wealth.
The distribution of the government’s claim is the next part of the definition. What is a “fair share?” I believe that the requirements of justice here are perfectly clear: government has a right to claim an equal percentage of each man’s wealth, and no more. Property taxes are typically levied on this basis. Excise and sales taxes are based on the same principle—though the tax is levied on a transaction rather than on property. The principle is equally valid with regard to incomes, inheritances and gifts. The idea that a man who makes $100,000 a year should be forced to contribute ninety percent of his income to the cost of government, while the man who makes $10,000 is made to pay twenty percent is repugnant to my notions of justice. I do not believe in punishing success. To put it more broadly, I believe it is contrary to the natural right to property to which we have just alluded—and is therefore immoral—to deny to the man whose labor has produced more abundant fruit than that of his neighbor the opportunity of enjoying the abundance he has created. As for the claim that the government needs the graduated tax for revenue purposes, the facts are to the contrary. The total revenue collected from income taxes beyond the twenty percent level amounts to less than $5 billion—less than the federal government now spends on the one item of agriculture.
The graduated tax is a confiscatory tax. Its effect, and to a large extent its aim, is to bring down all men to a common level. Many of the leading proponents of the graduated tax frankly admit that their purpose is to redistribute the nation’s wealth. Their aim is an egalitarian society—an objective that does violence both to the charter of the Republic and the laws of Nature. We are all equal in the eyes of God but we are equal in no other respect. Artificial devices for enforcing equality among unequal men must be rejected if we would restore that charter and honor those laws.
One problem with regard to taxes, then, is to enforce justice—to abolish the graduated features of our tax laws; and the sooner we get at the job, the better.
The other, and the one that has the greatest impact on our daily lives, is to reduce the volume of taxes. And this takes us to the question of government spending. While there is something to be said for the proposition that spending will never be reduced so long as there is money in the federal treasury,
