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Published in Liberty, November 1994, p. 26
An interesting question which has received comparatively little attention in the academic literature is whether somebody prosecuted for tax evasion can be said to be prosecuted in any meaningful sense of the word.[2] Indeed, the student of state persecution is faced with a difficult task because so little research has been done, and the literature on this topic is polemical rather than analytical, and must therefore be treated with caution.[3]
Professor John Kenneth Galbraith (Galbraith [1954], p. 295), in a carefully-reasoned argument, explicitly recognizes that "The more comprehensive the tax system -- the fewer the loopholes -- the better it serves both equality and stabilization."[4] Although it is not clear what Galbraith means by "loopholes"[5] (and although I am not a brain surgeon), it appears that broad historical trends support his argument.[6][7] But the reader must be careful (Myself [1960]) in interpreting this evidence.[8] Obviously, more research is needed before a definitive conclusion can be drawn.[9]
Pierre Lemieux[10]
1. I would like to thank my wife, Nancy, and my secretary, Pam, without the support of whom (including the latter's old IBM Selectric) this article could not have been written. I am also grateful to an anonymous referee from this Journal. Of course, any remaining error is entirely mine. NSF grant # 192-370-568-5666780.
2. I am not concerned here with the moral aspects of the question. On this, see Rawls [1971].
3. A good example is, of course, the little book by Frank Chodorov [1954], where the author argues in a somewhat anecdotical fashion that the income tax breeds state persecution.
5. "Giuliani Says Potholes Not Priority", New York Times, Sept. 5, 1994, Section 13, p. 36.
6. See also Zauberman ([1967], p. 291): "... the Soviet model was designed in the Central Economic Mathematical Institute of the Soviet Academy of Sciences (denoted thereafter as `Ts'). Neither its numerical solutions nor its fate have been revealed. Nonetheless, it deserves our attention as an important stage in the history of formalized planning techniques."
7. If I understand Galbraith's argument correctly, it implies that the tax evader is a criminal.
8. I chose to avoid here the argument raised by Lysander Spooner (Spooner [1870]) to the effect that resisting robbery is legitimate.
9. Perhaps a little anecdote will help understand the main thrust of the argument here. A friend of mine told me of somebody who was mugged but never prosecuted for tax evasion.
10. Not the author. Article quoted from the Old England Journal of Medicine .
Sources:
Chodorov, Frank [1954], The income tax, root of all evil (Old Greenwich: Devin-Aldair, 1954).
Galbraith, John Kenneth [1973], Economics and the Public Purpose (New York: New American Library, 1973).
Myself [1960], Textual Harassment in the Post-Modern World -- A Preliminary Assesment of the Sensitivity-Challenged Society, Research Report # 60-0000001, Trent University.
Rawls, John [1971], A Theory of Justice (Cambridge: Cambridge University Press, 1971).
Spooner, Lysander [1870], The Constitution of No Authority (Boston).
Zauberman, Alfred [1967], Aspects of Planometrics (London: Athlone Press, 1967).