Here’s a Rorschach Test

by Don Boudreaux on October 31, 2009

in Current Affairs,Debt and Deficits,Other People's Money,Politics,Taxes

I sent the letter below to the Los Angeles Times:

Although California’s government hasn’t formally raised tax rates, starting tomorrow it will withhold “10% more than it already does in state income taxes” (“California to withhold a bigger chunk of paychecks,” Oct. 31).  You call this move by Sacramento “a forced, interest-free loan” from taxpayers to government.  Forced it is – a fact that makes taxpayers not lenders but, rather, victims of theft.

Suppose your neighbor seizes some of your weekly income while promising to return the funds to you later.  Even if he eventually repays you with interest, he’s a thief.  Nothing – not his profligacy, not his “need” for more money, not the manner in which he spends the money he filches – excuses his thievery.

It’s fashionable today to accuse private businesses of being greedy, duplicitous, and larcenous.  But no business could get away with such audacious seizures of other people’s property – seizures that governments, such as California’s, are escalating to a dreadful new level.

Sincerely,
Donald J. Boudreaux

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{ 75 comments }

1 OnlyShawn November 1, 2009 at 1:47 am

…he can't just raise the rent above the market. moot point.

2 OnlyShawn November 1, 2009 at 1:47 am

…he can't just raise the rent above the market. moot point.

3 OnlyShawn November 1, 2009 at 1:47 am

…he can't just raise the rent above the market. moot point.

4 OnlyShawn November 1, 2009 at 1:47 am

…he can't just raise the rent above the market. moot point.

5 OnlyShawn November 1, 2009 at 1:47 am

…he can't just raise the rent above the market. moot point.

6 OnlyShawn November 1, 2009 at 1:47 am

…he can't just raise the rent above the market. moot point.

7 OnlyShawn November 1, 2009 at 1:47 am

…he can't just raise the rent above the market. moot point.

8 OnlyShawn November 1, 2009 at 1:47 am

…he can't just raise the rent above the market. moot point.

9 OnlyShawn November 1, 2009 at 1:47 am

…he can't just raise the rent above the market. moot point.

10 OnlyShawn November 1, 2009 at 1:47 am

…he can't just raise the rent above the market. moot point.

11 OnlyShawn November 1, 2009 at 1:47 am

…he can't just raise the rent above the market. moot point.

12 OnlyShawn November 1, 2009 at 1:47 am

…he can't just raise the rent above the market. moot point.

13 Randy November 1, 2009 at 5:45 am

Joe,

I was just thinking about that the other day while out on a walk. Specifically, that the idea of a social “contract” is invalidated by the fact that one party has the right to change the terms at will and without the consent of the other interested parties. Thanks for reminding me.

14 Gil November 1, 2009 at 7:06 am

So? It could be said that a renter can't force a rental fee onto the landlord rather the landlord increases or decreases the rent depending on market conditions.

15 MichaelSmith November 1, 2009 at 7:23 am

The distinction between the government and a landlord is the fact that the government has a monopoly on the legal use of physical force to seize one's earnings, while no private landlord has any such power.

Thus, while a landlord may arbitrarily change the terms of a rental (outside of a legally binding contract, under which a renter could challenge any such change in court), the landlord has no power to compel the renter to accept these new terms — the renter can walk away without the landlord extracting another dime of his money.

Government, however, has the power to compel acceptance of any new “terms” it chooses to impose on the citizens, with jail sentences for any who try to “walk away” from its edicts.

16 LowcountryJoe November 1, 2009 at 7:35 am

Let's now discuss the government's role as thief rather than the supposed thievery that takes place between a landloard and his/her renter.

17 danisraeliuncensorednews November 1, 2009 at 8:23 am

Wow, they invented a new kind of taxation. And since it is not technically a tax, sky is the limit.

18 The Albatross November 1, 2009 at 9:31 am

If I remember my history forced loans was one of the reasons we cut off Charles I head in 1649, but I guess it is ok this time since it is “the will of the people” or some better nonsense than Charles and his silly Star Chamber.

19 Gil November 1, 2009 at 10:42 am

Yes a landlord can seize the renter for outstanding and yes the landlord can raise the rent if there's an ongoing apartment shortages. Libertarians can't show a historical magical Libertarian Eden of simple anarcho-Libertarians who were wonderfully wealthy and free only to have an outsider gang overpowering them and becoming a government. Governments have instead evolved from established families to aristocracies to monarchies to revolution to parliamentary democracy.

20 Gil November 1, 2009 at 10:42 am

. . . for outstanding payments . . .

21 fredfoldvary November 1, 2009 at 11:24 am

Californians can escape this increase in withholding by increasing the number of personal withholding allowances they claim on their employer tax forms.

22 MichaelSmith November 1, 2009 at 1:00 pm

If you fail to pay your rent, yes, the landlord has legal recourse. The nature of that recourse is dictated by the terms of the lease agreement you signed voluntarily and by state (or other) real estate laws.

Here in Georgia, for instance, the recourse consists of evicting you (after giving appropriate notice), retaining your deposit and imposing whatever penalty is defined in the lease, commonly the rent for the remaining months of the lease.

And yes, if you refuse to pay, the landlord can go to small claims court (or state court if the amount is large enough) and sue to collect the debt.

Likewise, if the landlord breaks the terms of the lease, you, the renter, have legal recourse under the law as well.

But neither of you has the legal power to initiate the use of physical force against the other. All you can do is seek to get the government to use force in retaliation for the breach-of-contract by the other party.

Government, by contrast, can initiate the use of physical force against a citizen that has done no harm to anyone else, broken no contract, etc. That's the distinction.

As to the rest of your statement, which begins with “Libertarians can't show a historical magical Libertarian Eden of simple anarcho-Libertarians . . . ” — you seem to be employing a form of the standard muirgeo conflation fallacy.

This fallacy consists of treating any criticism of government actions, or any advocacy of freedom, capitalism or limited government, as if it is an advocacy of anarchy — so that you can then respond with the claim that since no functional anarchist “Eden” can be shown to exist, our arguments are refuted!

But this line of “argument” is so completely fallacious it‘s silly. Advocating capitalism, freedom and limited government is not all the same thing as advocating anarchy.

Capitalism is a social system based on the recognition of individual rights, wherein all property is privately owned and the role of government is limited to the (crucial!) function of protecting individual rights against those who initiate the use of physical force or fraud in any of its forms (which includes unilateral breach of contract). Now that's not anarchy.

23 thomasacoss November 1, 2009 at 7:54 pm

Dr. Boudreaux, succinct as always. Could you have imagined this in your wildless dreams? The trouble is, so many people are so focused on looking for work, this story doesn't register. When they get one, it will.

24 Ecommunist November 2, 2009 at 12:19 pm

Taxation is theft.

25 Ecommunist November 2, 2009 at 5:19 pm

Taxation is theft.

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