In “Anatomy of the State” Rothbard attempts to
challenge the conventional thinking that surrounds the way we see the State aka the government. Unfortunately,
his argument is riddled with holes, and what one hopes are lies on the part of
the author and not expressions of his ignorance of real world events.
Take for example his assertion that “[the State] is the only organization in society that obtains its revenue not
by voluntary contribution or payment for services rendered but by coercion”. Taking for
a second as true his premise that the
State relies on coercion, we can still prove his statement wrong. In Naples
all businesses are obliged to pay - under the threat of violence - protection
money to the Cosa Nostra (an organized crime gang). In Sicily the racket money
is paid to the Mafia. In parts of Los Angeles, protection money is paid to the
various gang organizations, which have thousands of members and trans-national
links. Every country has such an organization.
We should now analyze the idea that the State always uses intimidation and bullying
to collect taxes. While this is undoubtedly true in certain countries, it is not universally so. Oftentimes democratic countries with strong institutions and robust
legal systems have low levels of corruptions and are able to deliver services
in what is perceived by their population as being efficient. Examples of these
services are universal health care, free public schooling, unemployment
benefits and so on. Countries such Germany, Finland, Denmark, Sweden and Canada
meet this criteria. In these countries, culture plays a bigger role in the
payment of taxes than the threat of judicial penalties as paying taxes is considered
one’s duty. This point is further proven at voting time when changes to the
system are rejected. In my experience, locals speak proudly of their system,
and perceive it as making society more egalitarian.
Finally, we should mention that taxes make
sense from an economic point of view. A society full of inequity and inequality
comes at a cost to all. For example, numerous reports and papers have shown that the previous absence of universal health care in the United States cost the country billions in medical bills. These estimates did not take into account lost revenue, lost production and other economic costs. In general, assuming strong institutions with low rates of
corruption, taxes are a proven method of wealth redistribution.
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