The Absurdity of Taxation

Taxation breaks The Non-aggression Principle and misallocates resources — but grant central planners their own terms for a moment. What is it meant to buy? Justice, protection, “essential services” — goods any government could just as easily sell on a market, voluntarily, like everything else. So why extortion instead of a price tag? Two of the most common justifications collapse the moment you run the numbers.

The “Paying It Forward” Myth

The claim: “Rich people used public infrastructure — roads, schools — to get wealthy, so they owe society more than everyone else already paid in.”

Consider two people, A and B. Both use the same roads and schools, both get taxed for them, both reach gainful employment. A then goes on to earn double B’s income. Progressive taxation says A should now pay exponentially more. But why? Both already paid for the services they used. What justifies the extra bill on A specifically?

No contract was ever signed. Nobody ever agreed “if I get rich using roads and schools, I’ll subsidize others indefinitely.” If you use a McDonald’s bathroom on a road trip and later become a millionaire, McDonald’s doesn’t get a claim on your future earnings — yet that’s precisely the logic applied to public services. And even granting the premise that usage creates some obligation, usage of a service “for everyone” implies a flat fee-for-service, not an unlimited, income-scaled debt: if the road costs $X to maintain and serves 1,000 people, each owes $X/1,000, full stop.

The causation is also just asserted, never shown. “Your wealth is due to public services” assumes what it needs to prove. Two people use the same road to work; one builds a company, the other stays a clerk for life. Did the road cause the first one’s success? If so, why didn’t it work on the second? Steve Jobs went through public school same as millions of others who didn’t found Apple.

The incentive math is straightforwardly perverse. A creates $1,000,000 in value and is taxed 50%, keeping $500,000. B creates $50,000 and is taxed 20%, keeping $40,000. A created 20x the value but keeps only 12.5x the money. Push this further and you get a “bootstrap paradox”: if successful people must keep subsidizing the next generation of successful people, later generations need less effort to get the same reward, while earlier generations paid full price — a system that’s supposed to reward value creation quietly rewards being born later in the queue instead.

And empirically, it doesn’t even do what it claims. The US has spent over $15 trillion on anti-poverty programs since the 1960s. If subsidizing people made them successful, the wealth gap should have shrunk and social mobility should have risen. Instead the wealth gap widened, mobility fell, and the same families stayed wealthy across generations. Part of why: the Fiat Currency used to fund the subsidies is itself corrosive — inflation devalues the subsidized person’s savings and prices real assets further out of reach faster than the subsidy check arrives, which is the general mechanism covered at length elsewhere. The subsidy doesn’t make people wealthy; it makes wealth more expensive to attain.

“Paying it forward” isn’t a moral framework — it’s the claim that your success obligates you to subsidize other people’s choices, dressed up as gratitude.

The “Cheaper For Everyone” Myth

The claim: “Everyone’s chipping in, so it’s cheaper and more accessible for everyone.”

The math doesn’t work. If you’re taxed $100 but receive more than $100 in value back, where’s the extra coming from — who’s paying for it?

Someone else pays more than they get. Bob pays $100 in tax, gets $150 in services. Larry pays $200, gets $150. Larry just paid $200 for $150 of value — no rational person makes that trade voluntarily, which is the entire point of it being a tax and not a purchase.

Or the government prints the difference — and everyone gets poorer. Say the economy’s total money supply is $1,000. The state extorts $200, needs $400, and prints the remaining $200 to cover it. Supply goes from $1,000 to $1,200. Anyone holding cash just had 6% of their purchasing power erased, whether or not they ever see a cent of the “free” service. Jim, with $100 saved, is quietly out $6. Larry, with $250 saved, is out $25 — four times Jim’s loss, because inflation taxes savers in proportion to what they saved.

Either way, taxation doesn’t make anyone richer — it just moves the bill somewhere less visible. The only way “everyone benefits” is if a shrinking few (the “rich”) eat the cost so the majority can spend more than they put in. Ask the obvious follow-up: what happens when there’s no one left to eat it?

The Parasitism Both Myths Produce

Both justifications end at the same place: forcing one group to subsidize another gives the paying group every reason to leave, and gives the group just below them every reason not to bother chasing success, since they won’t keep the fruits of it either. The receiving group gets more dependent and more entitled to other people’s output. Left to run, the parasitic class grows and the productive class shrinks — brain drain isn’t mysterious, it’s an incentive working exactly as designed. Inverse incentive structure covers the general mechanism in full; both myths above are just the specific rhetorical doors people walk through to arrive at it.