What is the proper relationship between the citizen and the state? A government is a creation of the people who need it only as far as it protects their God-given rights. The state has no goals of its own; its sole reason for existence is to secure its citizens' freedom to pursue their individual, family, and corporate goals. This leaves very little for the government to do. In his book Capitalism and Freedom, Milton Friedman describes how the sovereign people act as a group of responsible adults who want to play a ball game---they select a few among them to discover the best rules. Other servants are chosen to act as impartial referees and non-arbitrary enforcers of these rules when conflicts arise among some of the players.
Such understanding of the relationship between us and our public servants makes it easy to see why it is proper and just to "give Caesar what is Caesar's." It is in the best interest of the citizens to determine the most efficient way to pay for such services. Since we create the state to protect us as consumers and property owners against theft and fraud, it is not unreasonable to pay for the benefits of having police and courts through sales and property taxes. Knowing that prosperity results from innovation and work, if such economic outcome ranks high among our individual, family, or corporate goals, taxation of income and profits makes much less sense. And, as political philosopher Robert Nozick argues in his book Anarchy, State, and Utopia, taxation of earnings from labor for the purpose of redistribution is "on a par with forced labor."
Comparing income taxes with slavery may shock some readers. It may even enrage you. Before you pass judgment, take the following test: Would it be illegitimate for the government to seize some of your leisure---forcing you to work an extra hour each Monday night for the benefit of your poor neighbor? Do you have a property right in yourself? If so, do you have a property right in your labor? If so, do you have a property right in the fruit of your labor? Do you have the right to determine your income by choosing what and how much to work? Let's say you choose to labor overtime in construction while your neighbor takes a part-time job answering a phone. Would forcing you to surrender some of your hard earned money to provide food stamps for him sound uncomfortably similar to giving him a property right in you?
Happy Tax Day