"Of course, statists love to remind libertarians that it would be impossible to have a society in which people are free to keep everything they earn and in which there are no welfare-state programs. The statists conveniently forget that that was once a society in which there was no income tax and welfare state. It lasted for more than 100 years and was the most prosperous and most charitable nation in history. And the freest."

Income Taxation and the Welfare State Are Not Freedom
by Jacob G. Hornberger

When one lives under a regime of a welfare state, it is oftentimes tempting to mire one’s self within the muck of “reform” proposals, as liberals and conservatives do. This is especially true in a country like the United States, where statists honestly believe that the welfare state constitutes “freedom.” Since American statists honestly believe they are free, they spend their lives battling over which reform plan is going to fix the never-ending crises that the welfare state produces.

Therefore, it’s important that, from time to time, we libertarians remind ourselves and others what a genuinely free society entails. In that way, we can keep our eyes on the goal rather than get down into the muck by spending our lives advocating “reforms” to welfare-state programs.

In a genuinely free society, people are free to keep everything they earn and to decide what to do with it. That is, there is no taxation on income. You make it, you keep it. And then you decide whether to spend it, save it, invest it, or donate it.

When people are free to keep everything they earn, they have the responsibility over their own lives. For example, they manage their own retirement. They can choose to set aside a portion of their income for retirement or they can choose not to. That’s their choice and they bear the consequences of their choices.

If a person chooses not to save for his later years, then he must continue working. If he is unable to work, then he must rely on charity from others. But he cannot force anyone to take care of him.

The same holds true for healthcare. When people are free to keep what they earn, they are responsible for managing their own healthcare. Some might purchase insurance, while others might choose to self-insure. Again, each person takes responsibility for his own choices.

In fact, in such a society there are no mandatory “charity” programs at all. No Social Security. No Medicare, No Medicaid, No education grants. No food stamps. No foreign aid to dictators. No government welfare at all.

Instead, all charity is voluntary. People decide for themselves what to do with their own money.

Compare that idea — no taxation on income and no welfare-state programs — with the statist system under which we live. In today’s America, everyone’s income is, in actuality, owned by the government. Income as effectively been nationalized.

By having the power to set the percentage of income tax, the government has been made the owner of everyone’s income. Sometimes the government has kept the percentage relatively low — say, 10 percent — and other times it raises it to, say, 30 percent. But everyone knows that if the government wants to, it can raise income taxes to, say, 95 percent.

What’s really happening is that the government is letting people keep a certain percentage of their income, much as a parent let’s a child have an allowance.

What does the government do with the money? It doles it out to people that it feels need the money more than the people who earn it. It gives it to seniors in the form of healthcare or retirement (Medicare and Social Security). It gives it to students who need money to go to college. It gives it to the poor in the form of food stamps or free healthcare (Medicaid). It gives it to agriculture corporations in the form of farm subsidies. It gives it to foreign dictators in the form of foreign aid. It creates entire classes of people who become dependent on the largess of the state.

All of this “giving” is considered both a reflection of how good and benevolent U.S. taxpayers are and also is seen as a way to force Americans to be good and benevolent. The notion is that since everyone knows that Americans would never help out others if they were free to make the choice, they must be forced to be good and caring through the coercive apparatus of the income tax and IRS and the welfare state.

Moreover, since everyone knows that Americans cannot be trusted to be responsible, they must be forced to be responsible through such welfare-state schemes as Social Security and Medicare.

It’s one thing to embrace the welfare-state way of life, as both conservatives and liberals have done. But what I find fascinating is how the statists who support this way of life have convinced themselves that all this coercion is “freedom.” They simply block out of their minds that when the state forces people to be good and caring by forcibly taking their money and giving it to others, that is as far from genuine freedom as a system could ever get.

Of course, statists love to remind libertarians that it would be impossible to have a society in which people are free to keep everything they earn and in which there are no welfare-state programs. The statists conveniently forget that that was once a society in which there was no income tax and welfare state. It lasted for more than 100 years and was the most prosperous and most charitable nation in history. And the freest.

Link:
http://www.fff.org/blog/index.asp