Epstein on Taxes

quotes economics taxes

09 Feb 2014

On this week’s The Libertarian podcast, Richard Epstein argues:

If you are a classical liberal, you respect the libertarian intuition that taxes are coercive and [that] you have got to watch them very carefully. So what you do is you try to limit the way in which they can be done so as to avoid the prospect that some people are taxed largely for the benefit of others. The rhetoric of the President on the top 10% being subject to special obligations and special duties in effect is as offensive to a classical liberal as it is to a libertarian. And indeed if you go back to Aristotle, or to Hayek, or to Adam Smith or to my own work and you are trying to figure out what classical liberals think, basically they have very powerful prescriptions on how taxes are designed. They want them to be broad based, preferably on consumption, but perhaps on income. They want them in general to be flat. And they don’t want them to be subject to all sorts of ad-hoc exceptions of one kind or another.

The classical liberal therefore can tell you what is wrong with the current tax system without saying, look we have to throw the baby out with the bath water. But the problem is that the hardline libertarian is now in this position where [it is] as if all taxes are theft. I can’t distinguish amongst them [says the libertarian.] And it is distinctions amongst them that mark the difference between a sensible and a non-sensible tax system. And it is precisely the inability to come to grips with this which makes the hardcore libertarian vulnerable to all sorts of poltical ridicule. You can’t do that against the classical liberal, because he has very strong arguments as to why the progressivity that the President for example [champions,] creates all sorts of inefficiency in production and all sorts of conflict of interest among citizens that leads to a smaller pie which ultimately rebounds in a smaller share for everybody goverened by the system.

Listen to more here.