The libertarian perspective on taxation posits that taxation is a form of forced labor wherein an employee, having been paid by the employer, is forced to labor for another entity through deduction of revenue (Feser 220). The argument given by pro- libertarians is that taxation translates to a theft of resources. While this argument presents and probable and acceptable explanation where the objective of the state drivers of taxation is self-interest, it poses a challenging question in terms of the need to preserve and to run the state through provision of essential services. As such, several cons have been associated with the libertarian perspective on taxation, particularly on its presumption regarding the negative intentions of taxation.
The first disadvantage of this perspective is that it does not consider the needs of the state. For instance, Fester (234) asserts that basing decisions regarding taxation on the libertarian perspective would imply ignorance of the needs of the state and thus negate the essence of the state. Feser opines that legitimacy of taxation by the state is hinged on the assumption that the state performs the role of the injustice rectifier through the use of revenue gained through taxation (233). However, this means that taxation can be deemed illegitimate if the rectification actions intended by the state are themselves illegitimate. Similarly, Finkelstein (par. 3) indicates that libertarianism is also very axiomatic as it emphasizes the moral inclination of the action of taxation without giving a thought on the positive outcomes of taxation. This means that the perspective fails to recognize that citizens need essential services, which cannot be availed to them without funds. The funds needed in this are the same ones obtained through taxation. As such, they fail to recognize the legitimacy of the political taxation processes due to their misconceptions.
The libertarian perspective differs significantly from the cosmopolitan perspective on taxation. In particular, the cosmopolitan perspective is based on a liberal mindset, which encourages mutual cooperation in the building of a society (Kleingeld and Brown par. 1-3). The Rawlsian perspective driven from the general cosmopolitan outlook bases its beliefs on the premise that real justice comes through equitable distribution of societal burdens and benefits through cooperation (Lacewing 2). John Rawls is of the opinion that societal cooperation is to be aimed at individual benefit of all the society members wherein each person feels satisfied in terms of resource distribution. This is derived to mean that rational members of the society would be satisfied by the state’s actions as long as the actions result in the common good of all members. This perspective considers the self interest of the society members without ignoring the implications of taxation on their lives and the objective of taxation by the state.
The perspective represented by Rawlsian theory is clearly contradictory to that of the libertarian perspective. As opposed to the latter, the Rawlsian theory recognizes taxation as a way through which individual members of the society contribute towards their own self interests within the societal realm. For instance, the taxes enable the state to develop infrastructures in areas such as healthcare, education and finances, which rely on the masses for sustainability. This goes hand in hand with the proposition of the free- market philosophy on taxation. Taxation, from the free- market perspective is linked to product pricing, not as a measure of controlling income but as a measure of the income distribution in the society. Acs (177) describes the free market perspective as neoclassical, due to its consideration of factors such as economics as being the consequence of the income distribution in the society instead of being measures of resource distribution.
While the Rawlsian perspective emphasizes the role of taxation on resource distribution for individual gains, the free- market perspective considers it to be a measure of financial control in the society. This is based on the argument that taxation, as other monetary policies in any given society helps to check inflation rather than to distribute resources (Nell 128). To some extent, this counter the proposition of taxation as an indicator of income distribution due to its variation across the state population. At the same time, it opposes the argument developed by the libertarians that considers taxation to be a form of semi- legitimate robbery.
The contradictions between the different theories and perspectives that describe taxation in the contemporary as well as in the traditional societies indicate the difficulty involved in its interpretation. While the libertarian perspective describes taxation as outright robbery, the Rawlsian as well as the free-market perspectives describe it more liberally. However, the two liberal approaches to taxation view diverge in terms of their perceptions as one theory views taxation as resource distribution while the other views it as a form of income distribution determination. All in all, it can be concluded that both theories provide a picture of contemporary taxation in an ideal environment as it should be, devoid of evidence of self-interest seeking among the political class.
Acs, Zoltan. Review: Free market conservatism: A critique of theory and practice by Edward Nell. Eastern Economic Journal, vol. 11, no. 2 (1985): 177- 199.
Feser, Edward. Taxation, forced labor and theft. The Independent Review, vol. 2, no. 2 (2000): 219-235.
Frankenstein, Seth. What is libertarianism? A critic’s view. The Ethical Spectacle, 1997.
Kleingeld, Pauline and Brown, Eric. Cosmopolitanism. Stanford Encyclopedia of Philosophy, 2013. Accessed from www.plato.stanford.edu/entries/cosmopolitanism/
Lacewing, Michael. Rawls and Nozick on Justice. Routledge, Taylor and Francis Group, undated. Accessed from www.documents.routledge-interactive.s3.amazonaws.com/9781138793934/A2/Political/JusticeRawlsNozick.pdf
Nell, Edward. Free- market conservatism: A critique of theory and practice 1st edition. Routledge, 2009.