By: Chad Kent
Chad Kent Speaks

In a previous post, I argued that Obama’s proposed Millionaire’s Tax was a violation of the rights of millionaires and of course I was mocked by those who focus only on how government policies make them feel instead of the logic behind them.

So let’s look at this idea of taxing everyone’s property at different rates again because without a strong respect for property rights, freedom is impossible. This time we will look to John Adams for some help.

After supposing a hypothetical nation in which there were 10 million people but only 1 or 2 million people who held significant wealth, Adams posed the question, shouldn’t we expect that:

“if all were decided by a vote of the majority, the eight or nine millions who have no property, would not think of usurping the rights of the one or two millions who have? Property is surely a right of mankind as really as liberty. Perhaps, at first, prejudice, habit, shame or fear, principle or religion, would restrain the poor from attacking the rich, and the idle from usurping on the industrious; but the time would not be long before courage and enterprise would come, and pretexts be invented by degrees, to countenance the majority in dividing all the property among them, or at least, in sharing it equally with its present possessors. Debts would be abolished first; taxes laid heavy on the rich, and not at all on the others; and at last a downright equal division of every thing be demanded, and voted. What would be the consequence of this? The idle, the vicious, the intemperate, would rush into the utmost extravagance of debauchery, sell and spend all their share, and then demand a new division of those who purchased from them. The moment the idea is admitted into society, that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. If “Thou shalt not covet,” and “Thou shalt not steal,” were not commandments of Heaven, they must be made inviolable precepts of every society, before it can be made civilized or made free.

John Adams

Defence of the Constitutions of Government of the United States

Basically what he is getting at here is, when you allow different groups of people to be taxed at different rates, those with lower incomes will become bolder and bolder over time in how they use the government to take property away from the wealthy. First it starts simple, with demands that loans be forgiven (cough, Occupy Wall Street, cough) and heavy tax rates placed on the rich. But, inevitably it leads to calls for all property to be shared equally.

Obviously the last few decades – and the current Occupy Wall Street movement – have proven him to be prophetic on this point.

A lot of people today would dismiss Adams’s logic here and fall back on a cliche like, “The rich can afford to pay a little more” or “We just want the rich to pay their fair share.” But even though it might make some of us feel really good to do what we perceive is fair, there are reasons why a progressive income tax like we have in this country doesn’t work… and isn’t fair.

Let’s use Obama’s Millionaires Tax as an example. He is proposing to raise taxes only on millionaires who make up less than 1% of the population. If he makes that a major campaign issue in 2012, then you will have 99% of the people going to the polls to decide if the other 1% should have more of their property taken away in taxes.

For the moment, let’s even set aside the fact that allowing people to vote for taxes that don’t apply to themselves almost guarantees that government will become overgrown and wasteful. After all, when politicians can justify tax increases by only imposing them on a small minority of the population, people are going to be much more willing to allow the government to get bigger and bigger – because they don’t have to pay for it.

Far more importantly, under our current tax system any amount of your property can be taken from you any time that someone can form a large enough group of people who will vote for politicians who don’t think you deserve to keep it. Considering that, can it honestly be said that the government is protecting our property rights?

Of course not. You are not truly secure in the property you own. You have your property only at the mercy of your fellow citizens. As soon as enough of them decide that you have too much wealth – or that they don’t like the way you earned it – your wealth can be gone in one flash of populist rage.

You might be thinking, “OK Chad, that all might work out in a theoretical world… but it doesn’t apply to real life.” Really? What happened in 2009 when American opinion turned strongly against the bonuses that AIG paid to its executives? The House of Representatives almost immediately passed a bill that would tax those earnings at 90%. In that case, nobody was even arguing that the bonuses were illegal – just that they were in bad taste and probably a bad business decision.

Having your property confiscated by the government in that way is arguably a worse problem than the one our government was created to cure. The Declaration of Independence explains that our government was created to secure our rights. Basically, the purpose of our government is to protect our rights so that we can enjoy them to the fullest extent possible.

Look at it this way: if there were no government you would still have your God-given property rights. The problem is, you would be responsible for protecting them on your own. That makes it difficult for you to leave to go to work, go shopping, or do pretty much anything productive out of fear that someone will take all of your possessions while you’re gone. So if you really want to protect your property, you would basically have to spend most of your time sitting on your porch with a shotgun.

By contrast, when there is a government helping you protect your rights, you can leave your home knowing that – if someone does take your property – there is a police force to help you find the person who did it and a court system to help you hold that person accountable.

But under our current system of unequal taxation, your property can be taken from you at any time as long as enough of your fellow citizens are willing to support it politically. So not only are our fellow citizens allowed to take our property from us using the ballot box, the government will actually carry out the theft on their behalf.

At least when there’s no government, you have the option of hunting down the thief and retrieving your property. With theft by taxation, you are expected to smile and accept it.

As with so many of the problems we face, the solution here is simple: we have to tax all types of people and all types of property at the same percentage rate (for example through a flat tax or a consumption tax). This severely cripples the ability for one group of citizens to use the government to confiscate the wealth of others – if they want to vote for higher taxes they have to put their money where their vote is.

When we apply different tax rates to different types of people or property, that treats some people as if they have less of a right to their property than others – and as if they have less of a right to keep some types of property than others. Not only is that a violation of our rights, it simply doesn’t work. Again, let’s go back to that quote from John Adams:

“The moment the idea is admitted into society, that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”

Sadly, the out-of-control protests at Occupy Wall Street and the attempts of our politicians to raise taxes only on the wealthy are now proving the truth of that statement. As a nation, we have to regain our respect for the simple fact that all human beings have a natural right to keep what we create. If we continue to allow our government to ignore our property rights, it’s only only a matter of time until we completely lose our freedom.