Libertarian perspectives on the ethics of taxation

Abstract

We provide a survey of significant libertarian contributions to the discussion surrounding ethics and taxation. By significant contributions, we mean those which have exerted a strong influence both on libertarianism, popular and academic, and on political and ethical discourse more broadly. Our discussion centers on the work of three prominent libertarians: Robert Nozick, Ayn Rand, and Murray Rothbard. For each, we present his or her position concerning some ethical aspect of taxation and evaluate objections to it. Section 4.2 discusses Nozick's analogy between taxation of labor from earnings and forced labor and applies his argument against the fairness principle to fairness-based justifications of such taxation. Section 4.3 focuses on Rand's view that compulsory taxation as such is unjust and considers her proposed scheme of voluntarily-funded minimal government. We argue that she failed to convincingly argue for either the feasibility or desirability of the latter. Section 4.4 addresses Rothbard's similar position concerning the injustice of taxation per se and defends his view against possible justifications of that institution.