The customer pays the sales tax for every transaction with a business, and since no one is required to enter into commerce, isn't the sales tax technically voluntary?
asked Apr 12 '15 at 16:59
To my knowledge, a sales tax normally is a tax on the seller, not on the buyer. It is the seller who is most directly required by the government to make sales tax payments to the government, and there is nothing voluntary about the requirement for the seller to make such payments. There is no governmental requirement, however, for a seller to collect sales tax fees from buyers, and, indeed, sellers will sometimes waive the sales tax fees temporarily for the buyers as a means of conducting a de facto sale to induce more buyer purchases, even though the seller still must make sales tax payments to the government. The government normally leaves it entirely up to the seller to decide whether or not to impose sales tax collections on buyers, and the sales tax fees become a condition of the transaction (if the seller so chooses), leaving buyers free to accept or reject the transaction.
Some states may also try to impose sales tax mandates directly on buyers residing in the same state but making purchases from other states. California refers to this as a "use tax."
For reference, a brief Objectivist discussion of taxation and government financing can be found in The Ayn Rand Lexicon under the topic of "Taxation."
answered Apr 14 '15 at 22:12
Ideas for Life ♦
No, sales tax is not an example of “voluntary taxation”, and it is certainly not Just.
Ideas is correct to point out that it is actually the seller that is charged the tax, not the consumer. However, this fact does not necessarily dispose of the question. The rationale put forward in the question for why the sales tax is supposedly voluntary is that it is a tax on a commercial transaction, and it is a voluntary decision to enter into commerce. An unspoken assumption of this rationale is that if a tax is tied to a voluntary action, then the tax is an example of “voluntary taxation.” This same rationale, if it were correct, would apply just as much to the case in which the seller has to pay the tax as to the case in which the consumer has to pay the tax (since both are entering the transaction voluntarily), and therefore the rationale itself still needs to be addressed squarely.
The rationale put forward by the question is flawed. In particular, the rationale wrongly assumes that “voluntary taxation” refers to any tax that is tied to the performance of some voluntary activity. This is incorrect. Moreover, by focusing only on whether the activity that triggers the taxation is engaged in voluntarily, the questioner ignores important facts, such as whether the government has any right to impose the tax in the first place. These points will be elaborated on below.
(1) What is Meant by “Voluntary Taxation”
As noted, the questioner appears to misunderstand what objectivists mean when they discuss “voluntary taxation”. A system of “voluntary taxation” is a system of raising government revenue that does not initiate force against innocent citizens in order to get them to agree to pay money to the government, but instead offers services for purchase to the citizens that the citizens are free to purchase or not purchase. Thus, when objectivists refer to “voluntary taxation”, the “voluntary” portion of the term refers to whether the citizen’s choice to purchase a service from the government is voluntary, not whether other extraneous actions of the citizen are voluntary—the focus here is on the interaction between the citizen and the government, not the interaction between the citizen and some other citizen.
A hypothetical example of voluntarily taxation discussed by Ayn Rand is the government offering to legally enforce a contract (a service) in exchange for a payment. In this case, what makes this “voluntary taxation” is that the citizen can voluntarily choose whether or not to purchase this government service; the government cannot force anyone to purchase this service. Whether or not the contract itself (which does not involve the government) reflects a voluntary transaction is irrelevant.
(2) What Makes a “Tax” Just or Unjust?
A tax is unjust when it demands a payment from someone that the government has no right to demand. The government has no right to demand payment from anyone unless that person has incurred a valid obligation to pay the government (for example, by purchasing a service from the government). The mere fact that a person has engaged in some voluntary action does not give rise to any obligation to the government, and thus any tax that imposes an obligation to pay merely because some activity was engaged in is unjust.
Just because you engage in some activity voluntarily does not automatically mean that you owe some person a payment, much less justify the person in demanding such payment under threat of force. Some actions you engage in might result in you owning someone payment (e.g., you contract to purchase a good/service, in which case you owe the seller payment for the purchased good/service), but most actions you engage in give rise to no such obligation (e.g., peaceably using your own property). However, it is the substance of the action that determines whether an obligation arises and to whom it is owed, not the mere fact that the action is voluntary.
This is true with regard to the government and “taxation” as much as it is true with regard to other people. You have no obligation to pay the government anything unless you create such an obligation (such as by purchasing a service from the government, in which case you are obliged to pay the agreed price for that service), and a proper government has no right to demand any payment from you unless you actually owe that payment. The mere fact that you engaged in some activity voluntarily does not create an obligation for you to pay the government.
For example, imagine you are walking down the sidewalk and you voluntarily decide to start eating an apple (that you own). I then come up to you and say “you now owe me $20 because you started eating that apple.” The correct response to this would be “no I do not”. So what that you voluntarily chose to eat the apple—that action has no morally relevant relationship to my demand for $20. The fact that you voluntarily chose to eat the apple clearly does not give rise to any obligation on you part to me (or to anyone else for that matter).
If I called my demand for $20 a “tax”, that would not make it any better. Adding a different label to the action does not change the nature of the action. Further, if we assume that I am a government employee and that the $20 would be going into the government coffers, that does not make it any better either. A proper government is not free to do whatever it wants, but rather is restricted to respecting and protecting its citizens’ rights; moreover, there is nothing special about the government or its employees that would give rise to any obligation on you part that is any different than if I were not a government employee. Further, even if a governing body had previously passed a law saying that anyone who eats an apple owes the government $20 and I knew about this law, that would still not make it any better. Merely because a law is passed does not make the law morally right (just) or give rise to any rightful obligations. The government had no right in the first place to create such a law, and thus its existence does not justify my demand for $20 in the least.
On the other hand, if I own the apple and am offering it for sale, and you agree to purchase it from me, this does give rise to an obligation for you to make payment. However, the reason that you now owe me payment is not the mere fact that you took some voluntary action, but rather because of the specific action you took—you entered into a sales contract with me to purchase something I owned. The voluntariness of the action is relevant only insofar as it pertains to the validity of the contract, but, setting validity aside for a moment, it is the fact of entering into the contract that gives rise to the obligation of payment, not the fact of voluntariness.
Another way to consider this issue is to consider scope of consent. We often consent to things, both explicitly and also implicitly by taking certain actions. However, just because you have consented to one thing, does not mean that you have consented to everything. Your consent has a certain scope, which limits what you are consenting to, who you are consenting to, and when the consent may be valid. For example, if you consent for a doctor to perform an operation to remove your appendix, that does not give the doctor a right to perform any old procedure that the doctor choses (e.g., amputate your leg). It also does not give someone other than the particular doctor a right to cut on you (e.g., your neighbor cannot come over and start cutting you up). It also does not give anyone (whether the doctor or someone else) the right to cut on you at any time that they chose (e.g., the doctor cannot show up at your house in the middle of the night and start cutting into you).
Similarly, when you voluntarily enter into a commercial transaction, you are consenting to certain things, including being bound to make the agreed payment. However, such consent has a scope: you have consented to pay this particular seller and to pay them this particular amount, but not to pay anyone and everyone any amount they ask of you. It would be ludicrous to assume that the act of purchasing something somehow gave rise to an obligation to pay completely unrelated parties any amount they desire merely because you made the purchase voluntarily. Your consent in entering the commercial transaction does not include consent to pay the government anything—the government is extraneous to the transaction, and no express or implied consent exists with regard to the government.
answered May 01 '15 at 11:31