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Hornberger's Blog is a daily libertarian blog written by Jacob G. Hornberger, founder and president of FFF.
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Conservatives versus Libertarians on Income Taxation


The current debate over income-tax rates in the GOP presidential race highlights another major difference between conservatives and libertarians. It is a debate that involves moral, philosophical, economic, and practical issues. Most important, it is a debate over the meaning of freedom.

In the recent South Carolina debate, the candidates were asked what they would like to see as the top rate for the income tax. Four of the candidates responded as follows:

Rick Santorum: two rates, 10 and 28 percent.

Mitt Romney: 25 percent.

Newt Gingrich: 15 percent.

Ron Paul: 0 percent.

At first blush, it might appear that the differences simply relate to percentages. Not so. The difference between Ron Paul’s answer and the other answers is the difference between day and night. By responding with a “zero percent,” Paul is giving the standard libertarian position, one that differs fundamentally from that of conservatives: that there should be no income tax at all.

In other words, libertarians don’t simply advocate a zero income tax rate. We call for the abolition of the income tax and the IRS.

Conservatives, on the other hand, advocate the continuation of the income tax and the IRS. The fight among themselves and among liberals is over the precise rate of income taxation and over how progressive the income tax should be.

Why do libertarians oppose income taxation? For the same reason our American ancestors opposed income taxation: It is inconsistent with the principles of a free society. As long as government has the power to seize people’s income, there is no way that people in that society can legitimately be considered free.

It’s not a coincidence that Americans lived without income taxation and the IRS for more than a century. Our American ancestors knew that by surrendering to government the power to take their income from them, they would be surrendering their freedom at the same time.

Freedom is what matters to libertarians. That’s our highest value. That’s why we often mention freedom in our speeches and articles.

Obviously, freedom is not the highest value for conservatives or, for that matter, liberals. What matters to them is the preservation of the welfare-warfare state, which both conservatives and liberals embrace. That’s their highest value. For them, nothing must be permitted to interfere with that goal.

How would the welfare-warfare state be funded in a libertarian society? It wouldn’t be because there would be no welfare programs and no warfare programs to fund. Like our American ancestors, libertarians oppose Social Security, Medicare, Medicaid, education grants, foreign aid, corporate bailouts, SBA loans, FDIC, and all other socialist programs. We would abolish them, along with the army of departments, agencies, and bureaucracies that administer them.

We’d also dismantle the regulatory state, including such destructive schemes as the drug war, insider-trading laws, monetary central planning, along with the DEA, the SEC, the Federal Reserve, and the army of bureaucracies that administer the hundreds of thousands of federal regulations that would disappear in a libertarian society.

We’d also dismantle the warfare state and limit the federal government to the genuine defense of the United States. That would mean no more U.S. government as world policeman, no more imperialist overseas bases, no more foreign interventions and foreign wars, no more coups, kidnapping, assassinations, rendition, and torture, no more entangling alliances, no more CIA, and no more military industrial complex.

Why do libertarians oppose such programs? Again, because such programs, like the income tax that funds them, violate the principles of individual liberty, free markets, and limited government.

For those who say that that simply is impractical, let’s not forget that our American ancestors lived without all those programs for more than 100 years — and without the income tax that funds them.

Without an income tax, everyone keeps whatever he earns , receives in gifts, or inherits. He decides what to do with his own money — spend it, save it, invest it, donate it, or whatever. For libertarians, that’s an essential part of what freedom is all about. The freedom to keep one’s own money and to decide how to dispose of it is as important to us as freedom of religion, freedom of speech, freedom of the press, and the right to keep and bear arms.

What the income tax essentially did was to nationalize everyone’s income. Once the statists succeeded in foisting income taxation onto America, the government was made the owners of people’s income. By having the power to set the percentage—10 percent, 20 percent, 30 percent, 50 percent, 90 percent, or even 100 percent — the government now wielded the power to decide how much income people would be permitted to keep, much like a parent setting the amount of allowance a child would be permitted to have.

Sometimes the government is nice to the people and sets the percentage low. Sometimes it’s not so nice and sets the percentage high. But make no mistake about it: By wielding the power to set the income-tax rate, the government ultimately decides how much people will be permitted to keep from their earnings.

America has lived under two separate economic systems: one with no welfare-warfare state and no income tax and the other with a welfare-warfare state and an income tax. In a time when federal spending and debt are hurtling our nation toward privation, it would be wise and prudent for Americans to be discussing and debating such fundamental questions as: What does it mean to be free? What is the role of government in a free society? Are a welfare state, a warfare state, and an income tax consistent with the principles of freedom? How much does freedom mean to you? Has the time arrived in our nation’s history to reject the statism foisted upon our land by conservatives and liberals and to embrace libertarianism?

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.