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Published online by Cambridge University Press: 20 July 2015
Without question, the libertarian vision that envisions the use of state power to control force and fraud as a proper governmental function is one piece of any comprehensive political theory. But the hard-line libertarian goes astray in finding this the sole function of government or in thinking that the maintenance of order is possible without the imposition of taxes. Rather, the case for taxation rests on the familiar view that state coercion is sometimes necessary to overcome coordination problems. The justification for a minimal system of taxation therefore is that it provides more in benefits for the individuals taxed than they lose in revenue. Stressing the benefit shows the mistake in Nozick’s famous observation that taxation is “on a par” with forced labor. And the proper understanding of the logic of taxation shows the defects in the series of steps in demoktesis-or “ownership of the people, by the people, and for the people”-that Nozick offers to show how difficult it is to draw any clear line between taxation and slavery.
I should like to thank Eric Murphy of the University of Chicago Law School, Class of 2005, for his usual efficient and informative research assistance.
1. For one such discussion, see United States v. Drescher, 179 F.2d 863 (2d Cir. 1950). Note that much of the Internal Revenue Code introduces conscious deviations from the proposition that income is taxed at whatever time wealth is received. The current system that defers the taxation on pension income has a statutory base that carves out an exception to the basic rule at 26 U.S.C. § 61(a) that taxes all income. For the deferred pension sections, see 26 U.S.C. § 401-09.
2. See Nozick, Robert, Anarchy, State, and Utopia (New York: Basic Books, 1974) at 169 Google Scholar [ASU]. Nozick notes that he is unsure as to how far this argument reaches. It could be that “on a par with” means “is” a form of forced labor, or is only “one kind of” forced labor. Ibid at n.*.
3. Epstein, Richard A., Barnett, Randy, Friedman, David & Pinkerton, James P., “Coercion vs. Consent” Reason 35 (March 2004) 40 Google Scholar (debate with Randy Barnett, David Friedman & James Pinkerton).
4. Comment in debate with Epstein, Richard, March 9, 2004, The Independent Institute http://www.independent.org/events/detail.asp?eventID=90 Google Scholar. Jeffrey Rogers Hummel is the author of The Promised Land of the Free.
5. See ASU, supra note 2 at 151, which notes:
1. A person who acquires a holding in accordance with the principle of justice in acquisition is entitled to that holding.
2. A person who acquires a holding in accordance with the principle of justice in transfer, from someone else is entitled to the holding, is entitled to the holding.
3. No one is entitled to a holding except by (repeated) applications of 1 and 2.
4. See G. Inst. 2.66. Note that the phrase is “res nullius,” a thing owned by no one, which is not the same as a “res commune,” which is a thing owned in common by all and, under the classical views, included air and water. See J. Inst. 2.1. A complex system needs both for various efficiency reasons. The efforts to collapse res commune into res nullius makes the world look more libertarian than it could possibly be. Likewise, a world that reduces all private property into common property makes it more collective than it could possibly be. The traditional lines avoid both extremes. For discussion, see Epstein, Richard A., “On the Optimal Mix of Private and Common Property” (1994) 11:2 Soc. Phil. & Pol. 17.Google Scholar
5. See, e.g., Ploofv. Putnam, 71 A. 188 (Vt. 1908) (privilege to enter property of another in order to escape imminent peril); Vincentv. Lake Erie Transportation Co., 124 N.W. 221 (Minn. 1910) (compensation required for destruction of property used by defendant out of necessity).
8. See 17 U.S.C. § 107 (2000) [author: should (2000) be there?] (noting the four squishy factors used to make the determination of when one person can copy property of another: purpose and character of the use, nature of the copyrighted work, the amount of the work taken, and the effect of the use on the market for the principal work). For limits on the doctrine, see Harper, & Row, , Publishers, Inc., v. Nation Enterprises , 471 U.S. 539 (1985)Google Scholar (denying fair use to reproduction of extensive manuscript portions).
9. U.S. Const. amend. V: “nor shall private property be taken for public use, without just compensation.”
10. ASU, supra note 2 at 218-24.
11. 236 U.S. 1 (1915). “No doubt, wherever the right of private property exists, there must and will be inequalities of fortune; and thus it naturally happens that parties negotiating about a contract are not equally un-hampered by circumstances. This applies to all contracts, and not merely to that between employer and employee. Indeed a little reflection will show that wherever the right of private property and the right of free contract co-exist, each party when contracting is inevitably more or less influenced by the question whether he has much property, or little, or none; for the contract is made to the very end that each may gain something that he needs or desires more urgently than that which he proposes to give in exchange. And, since it is self-evident that unless all things are held in common, some persons must have more property than others, it is from the nature of things impossible to uphold freedom of contract and the right of private property without at the same time recgnizing as legitimate those inequalities of fortune that are the necessary result of the exercise of those rights.” Ibid. at 17.
12. ASU, supra note 2 at 170.
13. See ibid. at 21, for one cryptic reference. Nozick does not discuss Olson, Mancur, The Logic of Collective Action (Cambridge, MA: Harvard University Press, 1965)Google Scholar, which was a centerpiece of the political debate just before he wrote.
14. Rawls, John, A Theory of Justice (Cambridge, MA: Harvard University Press, 1971) at 80–83 Google Scholar.
15. See U.S. Const. art. I, § 2, cl. 3 (“[D]irect Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers.”). This provision was held to require apportionment of an income tax on property (which was directly proportionate to the value of the property) in Pollock v. Farmer ‘s Loan & Trust Co., 158 U.S. 601 (1895), which in turn was overturned by the Sixteenth Amendment, which provides: “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” Note on its face the sixteenth amendment does not block any individual claim that a progressive tax is unconstitutional because it violates either the takings or due process clause, but in practice it has been read that way in part because the direct tax in Pollock was progressive.
16. For discussion of this view, see Epstein, Richard A., “Can Anyone Beat the Flat Tax?” (2002) 19:1 Google Scholar Soc. Phil & Pol. 140, noting the views of Aristotle, Locke, Smith, and Hayek, that point in this direction.
17. ASU, supra note 2 at 290. The illusion is Nozick’s for his definition ends with “one that must not be allowed to perish from the earth.”
18. Ibid.
19. Ibid. at 291.
20. Ibid
21. Ibid
22. Ibid
23. For a brief account see Nicholas, Barry, An Introduction to Roman Law (Oxford: Clarendon Press, 1962) at 70–71.Google Scholar
24. Ibid.
25. U.S. Const. art. I, § 3, cl. 4.
26. For development of the theme on autonomy, see Epstein, Richard A., Simple Rules for a Complex World (Cambridge, MA: Harvard University Press, 1995) at 54–59 Google Scholar.
27. ASU, supra note 2 at 282-90
28. For discussion of the pro rata division of the cooperative surplus, see Epstein, Richard A., Takings: Private Property and the Power of Eminent Domain (Cambridge, Ma: Harvard University Press, 1985) at 162–75.Google Scholar For a variation on the same theme, see Merrill, Thomas W., “The Economics of Public Use” (1986) 72 Cornell L. Rev. 61 at 67,Google Scholar taking the position that the subjective value of landowners in their own property is a reason to deny that they are taken for public use (unless put to traditional public uses like highways and forts) and that the difficulty of the assembly problem is a good reason to allow their taking.
29. Cf. Head v. Amoskeog Mfg. Co., 113 U.S. 9 (1885) (where there was in fact a common carrier obligation on the mill), with Olmsteadv. Camp, 33 Conn. 532 (1866) (de facto universal service but no rate restriction or common carrier duties). The public use requirement was held satisfied in both cases.