Roving Bandit, Stationary Bandit, and Income Tax

by | Feb 18, 2018

Roving Bandit, Stationary Bandit, and Income Tax

by | Feb 18, 2018

Many libertarians have embraced the slogan “taxation is theft.” I myself think it is more precise to say that taxation is extortion. But even saying that fails to capture how egregious taxation really is, especially income taxation.

When a mugger or a home invader accosts you, he points a gun at you or waves a knife in your face and demands your wallet or some other property. In most cases, if you surrender your property to him as he demands, he takes it and flees, and you will most likely never see him again. He is, in the classic phrase, the roving bandit.

In contrast, the state is, in Mancur Olson’s classic term, the stationary bandit. It extorts your money constantly, ceaselessly, and no amount of plunder sates its appetite for what rightfully belongs to you. You are milked endlessly by people who have no rightful claim to loot you, but do have the power to take even more of your wealth in the form of interest or penalties or to place you in a steel cage if you make too much of a fuss about being looted.

With income taxation, however, the matter is even more exasperating and outrageous. In this case, the state’s legal henchmen construct an immense body of rules for determining how much tax is “owed” by persons in a nearly infinite variety of circumstances, depending on the form and source of the income, the amount, the timing of its receipt, the permissible deductions from the taxable amount, and so on. The rules run to thousands of pages, and tax experts themselves, including those employed by the tax collection agencies, cannot agree on the amount of tax liability associated with even a moderately complicated tax return.

Read the rest at the Independent Institute.

About Robert Higgs

Robert Higgs is Senior Fellow in Political Economy at the Independent Institute, author or editor of over fourteen Independent books, and Editor at Large of Independent’s quarterly journal The Independent Review.

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