As any right-thinking anarcho-libertarian will tell you; taxation is theft, or to be more accurate, robbery. This kind of straight talk tends to make the minarchists and classical liberals wince. They may concede the point on the blandly rational grounds that it is correct, but they find it a little tactless to point it out too stridently, especially as their aim is not to abolish the state entirely, but rather to cut it down to a manageable size.
Nevertheless, there is no reason for the various strands of libertarianism to fall out. I would say the time for that would be when the ‘night-watchman’, minimal state has been achieved, and until that time, the disputes amongst us are largely academic. We are lumbered with the status quo, and that includes a big state and heavy taxation. But, by accepting the fundamental injustice of taxation, it does at least free us from seeking after the will o’ the wisp of a ‘fair’ system, a ‘neutral’ system, and instead lets us focus the mind on reducing taxation in general and the very heart of the matter; government spending.
Whatever the theoretical destination may be, the only way to get there is by little steps, just as long as they’re steps in the right direction. Bringing in new taxes, even with the intention that they will replace other ones would seem to be a mistake, with the risk that we’ll wind up with the old ones and the new ones. Better to freeze the system as is, and then start chipping away at it, piece by piece.
Some taxes seem more pernicious than others. An example, in my view is Inheritance Tax – or Death Tax, as it should be known. Not only does it visit injustice upon the heads of the bereaved, it causes sub-optimal decisions to be taken by the individual while still alive, in order to minimise the bill. Nevertheless, an attempt to abolish it will provoke political opposition with the accusations that it is helping the rich – the implication being that anything which does so, harms the poor. This brings us to the issue of political expediency.
If the possibility arises to cut taxes, it would seem sensible to ‘spread the joy’ as widely as possible. I would target VAT on fuel, alcohol and cigarettes. The justification for this would be that each of these is already subject to a separate duty. A reduction of the cost of fuel would benefit everyone, either directly or indirectly. Not only this, it would be visible. Other targets could be the aforementioned Death Tax and Employer NI. This latter seems a singularly foolish levy on employment, and its abolition could only improve the jobs market. No doubt the left would demand the saving be passed on to workers (a quick way to nullify the point of the change), but it should not be difficult to make a convincing political case for ending Employer NI.
Reducing the size (not to say sheer weight) of the tax code must also be a priority. I suggest setting a target that it should be no bigger than ‘War and Peace’ would be a good place to start.
In summary, a libertarian programme of tax-cutting, whether premised on the inherent criminality of tax or a more moderate position, should avoid attempts to find ‘fairer’ means to provide loot to the government (such as ‘shifting the burden’ onto the rich), but should rather seek to freeze the system as it is, and then proceed to dismantle it little by little, through across-the-board reductions or when possible the abolition of particular taxes. There should be no new taxes (with one possible exception: cannabis!), and an overtly populist tone should be struck, with the stress on giving the people back their money.
Libertarian Home 
War and Peace seems a little long, how about Catcher in the Rye..?
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Let’s aim for ‘War and Peace’ first, which would reduce it to about one sixth of its current girth.
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Technically taxation is extortion (like a Mafia “protection” racket) rather than theft.
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So we’re playing being pragmatic & not being allowed to introduce any new taxes? OK. I would suggest the best thing to do on a pragmatic basis is to get the zero rate of income tax to run to about £25000p.a.
This would be a tax cut for every working person & would serve to undermine the client state.
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How is that more pragmatic than spreading the tax cuts across the board?
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Well lots of voters work & pay income tax, all of whom would benefit from seeing more on their wage slip each month. I think it would reduce benefit dependency by making work pay. I think it would make a low-paid job more rewarding than it is currently which I think allows people on the margin to buy into the legal economy more easily. I think it would make it easier for people to save, which breeds a culture of self-reliance. I reckon people who live hand-to-mouth are less weary of the state than people who have savings. I also think it would allow a lot of the benefits that are paid to households that have someone in full-time employment to be cut, reducing welfare expenditure.
I think there is more to be said for reducing taxes on the poor than the rich, to be honest. It would make us appear to have an agenda that potentially benefits the many rather than the few. Electorally I believe that if you have two people on low but equal incomes, A pays taxes but gets it back in benefits, & B just gets to keep his wage, then I believe that B is less likely to vote statist than A, because he perceives himself as self-reliant, whereas A notices that he gets the benefit money, but doesn’t really notice the tax money that PAYE takes from him as it is never in his hand. Concentrated benefits/dispersed costs I believe this is sometimes called.
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Firstly, you’re missing the central point I was making. You may disagree, that’s fine, but by saying; “I think there is more to be said for reducing taxes on the poor than the rich”, you doing the very thing I think is a mistake, which is trying to make the tax system ‘fairer’. It ain’t fair and it will never be fair, because there is no objective measure of ‘fairness’. That is why I think it better to start by freezing everything and then seek to spread tax cuts across all the many taxes. Such a process will emphasise all the many ways the government finds to tax us.
Secondly, if you change the tax in the way you suggest, I think it will serve to justify high taxes on fuel, tobacco, VAT and all the other things which are not income tax, the additional money in the pay packet will most likely end up in the exchequer via another route, and the vast, labyrinthine system will be largely untouched.
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My concern with lowering taxes across the board is that many people don’t pay certain taxes. Tobacco duty alone could be abolished tomorrow, but the majority of adults in this country don’t smoke so they probably wouldn’t pay any less tax. Cutting fuel duty & VAT are great ideas but my worry with VAT is that people ignore the VAT element when they buy stuff. They just see it as being part of the cost of living. I think that people would respond more to keeping their wage income.
I think cutting income tax shifts a big demographic of people into economic self-sufficiency & insulates them from the Client state. Pragmatically, what is important to me is not how many taxes are cut but how many people see the benefit of tax cuts in a way that shifts public opinion toward a small state. To my mind the best way to do this is to expand the zero rate of income tax.
We live in an electoral democracy & so we must convince as many people as possible, especially people who are likely to currently oppose us. A lot of those people are paying income tax on £8-£25K.
We can cut inheritance, CGT or the upper rate of income tax but the chances are that a higher proportion of the relatively smaller section of the population who pay the bulk of these taxes would already be sympathetic to tax cuts. I feel we should be appealing to the masses & not preaching to the choir.
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If you want people to see the benefit of tax cuts, the first place to start is fuel duty. Right now, every time someone goes to the petrol station, they have the sense of outrage and robbery. The same sense is felt every time someone buys cigarettes. Yes indeed, the majority don’t smoke cigarettes, but 20% of the adult population is a significant minority.
If you target the income tax, and make a play of cutting taxes to ‘the poor’, then you are playing a leftist game of ‘let the rich pay the taxes’, or anyway that someone else should pay, and I’m sure it will entrench the taxes in other areas. You say people don’t pay attention to VAT etc. I think that’s a sweeping statement. Maybe not on a retail purchase, because it’s not made clear, but on an invoice which states it, it is indeed noticeable. Reducing taxes across the board will benefit everyone.All you are suggesting is raising the threshold on one tax. This is hardly radical, and I don’t see why it will make the beneficiaries turn away from the state. Indeed, they may grow even more fond of it!
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I don’t see cutting income tax as left wing, we’ll have to disagree there. I certainly think that cutting VAT is a good idea, but as sweeping as you say my last statement was I would argue that most voters personal encounters with VAT are retail. I accept that cutting fuel duty is a very good idea, though I believe fuel duty was once much lower & we still had a high tax society. I don’t see prioritising cutting income tax, which almost every working person pays, as less radical than cutting tax on cigarettes, which you say 80% of adults don’t purchase. I would start by undermining the client state & I remain convinced that abolishing payroll taxes on the first £25000 is the best place to start.
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“I don’t see prioritising cutting income tax, which almost every working person pays, as less radical than cutting tax on cigarettes, which you say 80% of adults don’t purchase.”
All major political parties are talking about raising the income tax threshold. None are talking about cutting tax on cigarettes. Therefore the latter is definitely more radical.
I didn’t say cutting income tax was leftwing, I said that making a tax cut for the poor was playing a leftist game of ‘let the rich pay the taxes’. What it also does is attempt to shift the tax burden from one group to another, favouring one group over another and seeking the non-existent ‘fair’ system. I see no reason to think that the tax cut you favour will lead to people rejecting the ‘client state’. Did this happen last time the tax threshold was raised? Besides, if the chance came, I’d far rather remove Employer NI first, as this is more likely to stimulate employment.
To me, making a big deal about income tax, rather than tax in general, is a mistake, especially if it’s based on the theory that people will turn away from the government if the income tax threshold is raised significantly. It strikes me as a gimmick, rather than a strategy to reduce the predations of the state in the longer term.
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No major political party is suggesting raising the zero rate to anything like £25000, even UKIP would keep it at around £15000.
I’m not playing the game of shifting the burden of tax. I’m playing the game of trying to endorse ideas that will popularise small-state politics in our democracy. People who receive their income from the state & live hand-to-mouth aren’t going to vote for reductions to tax & public spending. The best answer to this in my view is to make people better off in work than on the dole & to ensure that low-paid workers who keep their wages don’t get to claim benefits. Increasing the number of people who are self-sufficient in my view increases the pool of potential voters for a more libertarian direction. You did mention political expediency & populism in the OP-rightly or wrongly I’m trying to apply these here.
I think I have made clear that I think that it is better to “spread the joy as widely as possible” among taxpayers rather than taxes, & I think that payroll tax cuts on low earnings are the first place to do this. I think that abolishing income tax on the first £25000 would be the type of small pragmatic step that would play well with the public. If you disagree fair enough but please note I proposed this as a pragmatic first step rather than as a grand vision.
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I have never earned 25 thousand Pounds in one year in my life.
If you are going to abolish income tax on “the first twenty five thousand” Pounds someone earns – you might as well abolish income tax entirely.
Actually that might not be a bad idea…..
However, if you leave income tax “on the rich” – you repeat the mistake that was made in 1867 and 1874.
In 1867 a lot of people who did not pay income tax payers were given the vote – not “the poor” (the people who got the work were skilled workers), but they did not tend earn enough to pay income tax.
This was not supposed to matter as income tax was going to be abolished anyway.
The low point of income tax came in 1874 (less than 2% I seem to remember) and both Gladstone (the Prime Minister) and Disraeli (the leader of the Opposition) pledged to get rid of the income tax.
But, thanks in part to the absurd Liberal government “licensing law” on pubs, it was Dizzy who took office – and he proved to be lying about getting rid of income tax.
Rather than get rid income tax, Dizzy invented a new (for national British poltics anyway – the over rated Pericles had done the same thing in Athens thousands of years before) form of politics – promising the voters stuff to be paid for by other people (“the rich” – yes this vile form of politics was brought to national politics in Britain by a “Conservative” Prime Minister).
Abolish income tax for ordinary people (people like me) but keep it on the rich – and you REPEAT THE MISTAKES OF THE PAST.
You repeat the errors that (step by step) got us into this mess in the first place.
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They key thing is to simplify the tax code and sack half the staff of HMRC, this in itself will bring a major stimulus to the economy.
I agree with Carey that cutting fuel duty is essential as the absurdly high fuel costs we are seeing at present is a massive deadweight on the economy, it raises prices of everything and is felt especially by the poor.
Raisng the threshhold too high is wrong in my view as it is important that as many people as possible pay some tax so everybody share the burden of what must obviously be the minimum indispensable levy.
It is morally wrong to target certain groups eg the rich, jews, blacks, gays, catholics for any reason and taxation is no different.
Being allowed to keep what you can earn or what somebody gives you is a fundamental human right; taxation should rightly be viewed as a necessary evil and not an end in itself.
And yes I agree completely that the death tax and NI are respectively inhumane and stupidly counter-productive.
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