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Gus Van Horn blog

Reblogged:Warmer, Warmer, ... Colder

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Writing at Forbes, self-described free marketeer Brian Domitrovic takes an interesting lesson from Donald Trump's election to the presidency:

[O]ur domestic tax system inhibits labor and capital. It takes from those who earn (or might earn) and prevents investment. The deplorables ask in all but words: why does the free-market movement equivocate on free earning but not on free trade?

Free-market advocates have reacted to the Trump tariffs by making exceptionally well-reasoned, good, and valid arguments about how bad tariffs are. In some cases, this has tipped into vanity and narcissism, where the free-marketeer marvels at how excellent the free-trade arguments are, and how mindless the tariff constituency is and how craven those who indulge it.
Domitrovic is right: it is inconsistent to advocate one form of taxation while ruling out another. (I can think of at least one free marketeer who is not guilty of such a sin. Read on.)

But worse, it is unprincipled. What do you mean by that, Van Horn? I can almost hear you ask.

First, recall what a principle is:
A principle is "a fundamental, primary, or general truth, on which other truths depend." Thus a principle is an abstraction which subsumes a great number of concretes. It is only by means of principles that one can set one's long-range goals and evaluate the concrete alternatives of any given moment. It is only principles that enable a man to plan his future and to achieve it.
Domotrovic seems headed in the right direction, when he notes that, "It is no answer to say that the government must fund itself through taxation." And I started feeling hopeful when he stated, "[W]e should endorse an unending series of tax-rate cuts, indeed until rates hit zero." But the proverbial "other shoe" lands with the following thud:
[A] major nation shorn of all forms of taxation can get all the revenue, in effect, it needs by issuing currency.
banknote.jpg
Image via Wikipedia.
I will leave it to others (such as the economist Richard Salsman) to argue against the particular form of central planning and taxation that is central banking, but I will note that the fundamental issue here isn't a squabble about how much money the government should take by force (be it by taxation or inflation), but whether the government should take money by force at all.

A more productive place to start would be way further back than how the government funds itself to why -- at what the purpose of government is. Only then can one begin to see the outlines that Ayn Rand, the ideal capitalist, has laid out (and Craig Biddle has explored) for financing a proper government.

While Domitrovic takes a step in the correct direction by noting the contradiction of free marketeers who advocate any taxation, that step will lead nowhere if it is made without an eye on the goal of a government limited to its proper function of protecting indiviual rights.

-- CAV

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