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Indirect Taxation


Dan Sullivan: Are you a Real Libertarian, or a ROYAL Libertarian?

Two different kinds of indirect taxation
One of the most perverted twisting of concepts is reflected in what Hamilton called "indirect taxation." To him, and to many royal libertarians, indirect taxation is "hidden" taxation, as a value-added tax or sales tax that is buried in the price of purchased goods. This kind of indirectness is hardly admirable, and is similar to the kind of indirectness involved in chicanery and duplicity. Small wonder Jefferson called Hamilton a monarchist.

The Articles of Confederation embodied an entirely different concept of indirect taxation. The United States was to levy a tax, not on individual property holders, but on each state, based on its aggregate land value. The assumption was that each state would levy a similar tax on each county, and so on down to the individual. In this way, the individual would never have to face a federal tax agent directly, and if the federal government did not have the full support of the states, it could not bully them as easily as it could bully individuals.

Unfortunately, states did not support the federal government to its satisfaction from the beginning (being strapped from the war). Rather than working things out patiently, Hamilton introduced power-centralizing measures into the new Constitution. One was the other kind of indirect taxation, the mosquito-bite kind that you don't see happening. Royal libertarians trumpet this covert taxation as a virtue over direct real estate taxation, even when it means that "free trade" is being taxed.... Read the whole piece

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