Tuesday, May 30, 2017

Income tax, rent, and coercion

by George J. Dance:

May 30, 2017 - Recently I have been reading the online works of progressive Matt Bruenig, a Washington, D.C., lawyer and sometime internet troll, who has written a great deal about libertarians. Last week I wrote on his "Grab World" scenario, but that leaves many of his articles to be looked at. Today's installment deals with a 2013 article, "Libertarians are Huge Fans of Economic Coercion."

Bruenig's article defines "coercion" by quoting economist and lawyer Robert Lee Hale: "coercion occurs when there are 'background constraints on the universe of socially available choices from which an individual might "freely" choose.'"

Based on that definition, Bruenig argues that income taxes are coercive: "Imagine I am thinking of getting a job. I have the following options in the status quo: 1. Get a job and pay income taxes on the income from that job. 2. Do not get a job." Theoretically people have a third option – get a job and do not pay income taxes – but "the state – through violent, physical coercion – has prevented them from having this option." As Bruenig points out, Libertarians would agree with him on this.

However, Bruenig also argues that rent is equally coercive: "Imagine I am looking to find housing to live in. I am presented, in the status quo, with the following choices: 1. Pay a landlord rent to live in some building; 2. Be homeless." Once again, there is a theoretical option 3 – "to move into a building and sleep in it without paying anyone anything" – however, "landlords may call [the state] on the phone and have it violently remove me from the building if I chose option three. That is, the state has – through violent, physical coercion – restricted the options that are available to me."

Since libertarians do not oppose the collection of rent, Bruenig concludes, they do not oppose, but support, "economic coercion." QED

However, in the rent example, option 3 actually consists of two different options: 3a) move into a building, and unilaterally decide to not pay rent; and 3b) move into a building, and do not pay rent, with the owner's agreement. Bruenig shows that the state forecloses option 3a; but he does not show that it has foreclosed option 3b.

In fact, the state has not foreclosed 3b. Many people live in other people's homes and pay nothing, with the owner's agreement. Some live in their parents', children's, other family members', or friends' homes. Others live in Salvation Army or other hostels. Landlords let their superintendents live rent-free. I have even heard of superintendents allowing the homeless to sleep for free in apartment boiler rooms. In all these cases, the state does not intervene at all, much less "violently" – it intervenes only in the case of 3a, when one of the parties affected does not agree, and complains to it. Which is why libertarians would "describe my choice to pay rent as non-coerced and voluntary": whether or not rent must be paid for accommodation depends solely on the voluntary agreement of the parties involved.

In Bruenig's first example, the state also forecloses option 3a. If I unilaterally decide my employer cannot deduct income tax from my paycheque, and try to take the money he deducted from the till, he could fire me, and call "the state" to remove me if I then refuse to leave. But what about option 3b, where both I and my employer agree that I can work and not pay income tax?

Employers and employees choose 3b every day. Many people work 'under the table', with their employers' agreement, and never even report that income to the state, much less pay income tax on it. In this case, though, the state does not simply let those voluntary arrangements happen; on the contrary, if its agents discovered such an arrangement, it would declare both the employee and employer to be criminals, and use "violent, physical coercion" on both of them.

Which is why libertarians would call taxes coercive, and rents non-coercive. In both cases, I have three options: 1. pay rent or taxes; 2. go without a job or a home; and 3. get a job or a home, and pay no rent or taxes, by voluntary agreement of everyone affected. In the case of rent, the state does not interfere with my choosing that third option. However, in the case of taxes, it would interfere with "violent, physical coercion" if I chose the third option. Both I and my employer are threatened with coercion if we agree to choose it.

Bruenig deals with that difference solely by ignoring it. But his ignoring it does not make it disappear. The choice to pay rent is voluntary in a way that the choice to pay taxes is not; and the choice to pay taxes is coerced in a way that the choice to pay rent is not. Therefore his argument by analogy fails.


  1. "In both cases, I have three options: 1. pay rent or taxes; 2. go without a job or a home; and 3. get a job or a home, and pay no rent or taxes, by voluntary agreement of everyone affected."

    One of the parties affected is the state. The state usually does not voluntarily agree to let you have an income on its territory without paying income taxes.

    However, there is an option for you to get a job and not pay income taxes: In the job example option 3b) would be "get a job and do not pay income taxes on the income from that job with the state's agreement."

    The state has not foreclosed option 3b). All you need to do: Get the state to voluntarily agree to give you a tax exemption.

    1. Thanks for your reply. This is not like MB's site, with 300-page debates; you may be the first non-libertarian to ever reply here.

      "The state has not foreclosed option 3b). All you need to do: Get the state to voluntarily agree to give you a tax exemption."

      That's it? How does one do that?

    2. The rent scenario shows the outer limits of the propertarian philosophy. For freedom to exist, people need to have freedom in a particular place. A person is no more free if he must pay rent for the right to stand on the earth as he would be if he had to pay rent for the right to breathe the air.

      The reason that most people (with the possible exception of principled communists) feel that an apartment building should be legitimate property is that someone went to the trouble to build it, and people ought to have a right to keep that to which they went to the trouble to build.

      On the other hand, the argument for the social contract justification for taxation sounds similar to the argument for the propertarian justification for enforcing trespass laws against those who do not pay the required taxes to the pure landlord (he who owns land and claims exclusivity without taking the trouble to build anything on or with it).

  2. Victor, I understand what you're saying, but I'm not sure what implictions that leads to. That a landlord may charge for rent of the building or a part thereof, but not of the land it's on, means what: That he has to charge less? But if the rent is solely a matter of supply and demand, who decides whether he's charging 'less' or not? Who can tell what he's charging for?

    Of does it mean that, of the amount he charges, he has to give a portion (the land portion) to someone else? To whom?

    Same thing with, say, a farmer, who takes some land to grow things on it. He too would have to part with some of his food, or some of the money he gets from it, as the portion of his food or income contributed by the land itself. But to whom does he owe the food or money? Can he just give some to a local food bank? If he doesn't, can the food bank assemble a team of armed volunteers to come over and take it at gunpoint? Or must he sell the food, and give some of the money to the state? And if he doesn't do that, can the state send its armed agents to come over and take it? Can he avoid paying any taxes to the state by giving food to the food bank? Or is he required to pay both?

    I'm not philosophically opposed to the Georgist idea that a landowner is renting, not owning, and has to pay someone for use of the land; I'm just questioning how that would work.