Wednesday, 1 June 2016

Right to Property, Right to Tax

Hayek maintains that the state should not interfere in personal affairs of a citizen with progressive taxation for example. How would that not interfere with the concept that all should be equal before the law.

One potential answer is that the owner of property who makes an income from profit is not on an equal standing with the person who has no property in the first place. That the libertarian state itself forms at least two tiers of the society. Establishing progressive taxes would only change the two tiers somewhat. However it would still act as a parasite that would die with the host if the owner class was ever removed completely. Such alleviation of the conditions of the working class that a progressive tax establishes may never be sufficient to entirely remove the divide in society, but it would act to stabilise it as long as it is effective.

If the aim is to treat everyone equally for tax then on what basis would some be allowed to levy profits from both the work hour price and the market price forming a silent and extralegal taxation of all others- the workers as well as the consumers.

Another consideration of the inequality of the owners is that they have always a better recourse to advanced legal defence and tax optimisation expertise since they are the ones with more money.