Liam Murphy, Thomas Nagel The Myth of Ownership, OUP, 2002

fragmente

Pagina 8
[…] Private property is a legal convention, defined in part by the tax system; therefore, the tax
system cannot be evaluated by looking at its impact on private property, conceived as something
that has independent existence and validity. Taxes must be evaluated as part of the overall
system of property rights that they help to create. Justice or injustice in taxation can only mean
justice or injustice in the system of property rights and entitlements that result from a particular
tax regime.
The conventional nature of property is both perfectly obvious and remarkably easy to forget. We
are all born into an elaborately structured legal system governing the acquisition, exchange, and
transmission of property rights, and ownership comes to seem the most natural thing in the
world. But the modern economy in which we earn our salaries, own our homes, bank accounts,
retirement savings, and personal possessions, and in which we can use our resources to consume
or invest, would be impossible without the framework provided by government supported by
taxes. This doesn't mean that taxes are beyond evaluation—only that the target of evaluation
must be the system of property rights that they make possible. We cannot start by taking as
given, and neither in need of justification nor subject to critical evaluation, some initial allocation
of possessions—what people originally own, what is theirs, prior to government interference.
Any convention that is sufficiently pervasive can come to seem like a law of nature—a baseline
for evaluation rather than something to be evaluated. Property rights have always had this
delusive effect. Slaveowners in the American South before the Civil War were indignant over the
violation of their property rights that was entailed by efforts to prohibit the importation of slaves
into the territories—not to mention stronger abolitionist efforts, like helping runaway slaves
escape to Canada. But property in slaves was a legal creation, protected by the U.S. Constitution,
and the justice of such forms of interference with it could not be assessed apart from the justice
of the institution itself.
end p.8
Most conventions, if they are sufficiently entrenched, acquire the appearance of natural norms;
their conventionality becomes invisible. That is part of what gives them their strength, a strength
they would lack if they were not internalized in that way. For another pervasive example,
consider the conventions governing the different roles of men and women in any society. There
may be good or bad reasons for the existence of such conventions, but it is essential, in
evaluating them, to avoid the mistake of offering as a justification precisely those ostensibly
"natural" rights or norms that are in fact just the psychological effects of internalizing the
convention itself. If women are always treated as subordinate to men, the perception inevitably
arises that submissiveness is a natural feminine trait and virtue, and this in turn is used to justify
male dominance. Aristotle mistook the consequences of an institution for its natural basis in this
way when he argued that certain people were natural slaves, and also in his claims about

women.1 To appeal to the consequences of a convention or social institution as a fact of nature

which provides the justification for that convention or institution is always to argue in a circle.

In the case of taxes and property, the situation is more complicated, and it can be even more
absurd. The feeling of natural entitlement produced by an unreflective sense of what are in fact
conventionally defined property rights can encourage complacency about the status quo, as
something more or less self-justifying. But it can also give rise to an even more confused
criticism of the existing system on the ground that it violates natural property rights, when, in
fact, these "natural" rights are merely misperceptions of the legal consequences of the system
itself. It is illegitimate to appeal to a baseline of property rights in, say, "pretax income," for the
purpose of evaluating tax policies, when all such figures are the product of a system of which
taxes are an inextricable part. One can neither justify nor criticize an economic regime by taking
as an independent norm something that is, in fact, one of its consequences.
This is, as we have said, completely obvious, but as we will try to show, it is easy to forget. […]

Pag. 14 : “Implicit in those theories is a vision of government as a provider of services whose

demands for payment intrude on a laissez-faire capitalist market economy that produces a
presumptively legitimate distribution of property rights. Justice in taxation is then seen as the fair
sharing out of tax burdens among individuals as assessed from that baseline.
The assumption that pretax market outcomes are presumptively just, and that tax justice is a
question of what justifies departures from that baseline, appears to flow from an unreflective or
"everyday" libertarianism about property rights. Though a consistent application of sophisticated
libertarian political theory leads to deeply implausible results that hardly anyone actually
accepts, in its naive, everyday version libertarianism is taken for granted in much tax policy
analysis.” […]

Page 33: “There is no market without government and no government without taxes; and what
type of market there is depends on laws and policy decisions that government must make. In the
absence of a legal system supported by taxes, there couldn't be money, banks, corporations, stock
exchanges, patents, or a modern market economy—none of the institutions that make possible
the existence of almost all contemporary forms of income and wealth.
It is therefore logically impossible that people should have any kind of entitlement to all their
pretax income. All they can be entitled to is what they would be left with after taxes under a
legitimate system, supported by legitimate taxation—and this shows that we cannot evaluate the
legitimacy of taxes by reference to pretax income. Instead, we have to evaluate the legitimacy of
after-tax income by reference to the legitimacy of the political and economic system that
generates it, including the taxes which are an essential part of that system. The logical order of
priority between taxes and property rights is the reverse of that assumed by libertarianism.
This problem could not be avoided by moving from a baseline of actual pretax incomes to a
hypothetical baseline of incomes in a government-free market world. There is no natural or ideal
market. There are many different kinds of market system, all equally free, and the choice among
them will turn on a range of independent policy judgments.
A flourishing capitalist economy requires not only the enforcement of criminal, contract,
corporate, property, and tort law. (Those laws themselves are not natural but include evolving
and contested accounts of limited liability, bankruptcy, enforceability of agreements, contract
and tort remedies, etc.) In addition, most economists assume, it requires at a minimum a regime
of anti-trust legislation to promote competition, and control over interest rates and the money
supply to alternately stimulate or retard economic growth and control inflation. Then there are
such matters as transport policy, regulation of the airwaves, and the way government alleviates
so-called negative externalities of the market, such as environmental degradation.
All these functions of government are taken for granted by even the most ardent market
enthusiasts. The problem for the sacrifice view here is that the choices government makes in
discharging these functions affect market returns. How much profit an iron-ore smelter can
generate will depend on the prevailing regime of environmental law. A person's fortunes on the
bond market depend on government-influenced interest rate fluctuations. The upshot is that even
if the destitute are left to fend for themselves, it still cannot be said that pretax outcomes are
simply market outcomes. They are, instead, the returns generated by a market regulated in
accordance with a certain set of government policies.
end p.33
Choices about these matters cannot be made without appeal to substantive social values that go
beyond whatever internal logic there is to the idea of a competitive market. Since that is so, the
idea of a politically neutral market world that can serve as the baseline required by the sacrifice
approach to taxation is a fantasy. Any pretax distribution—real or imaginary—is already shaped
in part by judgments of political morality, and it is impossible to address questions of tax fairness
without evaluating those judgments.
Altogether, the case against using pretax outcomes as the baseline against which fairness in the
distribution of tax burdens can be assessed is so strong as to make it puzzling how anyone could
have been attracted to this way of thinking about tax justice. The answer lies in the enormous
appeal of what we have called everyday libertarianism. Even though the two ideas of strict,
unqualified moral property rights and desert in market rewards may not survive cursory critical
reflection, they are hard to banish from our everyday thinking. In both cases, we believe, the
illusion is supported by the illegitimate extension of more restricted concepts beyond the
boundaries within which they actually apply.
Consider first the idea of moral property rights in pretax income. We all know that people have
full legal right to their net (post-tax) income; subject to contractual or family obligations, their
money is legally theirs to do with as they wish. A legal property right to net income is obviously
not an absolute moral property right to anything (let alone to pretax market returns), but in daily
life it is hard to prevent the strong sense of legal rights from sliding into a sense of a much more
fundamental right or entitlement.
From this point of view, it isn't just that it makes good pragmatic or economic sense for
government to protect our current legal entitlements; it isn't even that, having once created these
legal rights, government is morally required to protect the legitimate expectations that those
rights generate. At the everyday level of what it feels like to live and work in a capitalist
economy, the sense of entitlement to net income is firmer than that—we are inclined to feel that
what we have earned belongs to us without qualification, in the strong sense that what happens to
that money is morally speaking
end p.34
entirely a matter of our say-so. Though everyone knows that even our right to spend the money
in our pockets is circumscribed, for example, by the obligation to pay applicable sales taxes, the
instinctive sense of unqualified ownership has remarkable tenacity.
If people intuitively feel that they are in an absolute sense morally entitled to their net incomes, it
is not surprising that politicians can get away with describing tax increases (which diminish net
income) as taking from the people what belongs to them. It is then a short step to the thought that
tax cuts give us back "our money"* and indeed that all taxation takes what belongs to us; what
we are fundamentally entitled to is our pretax incomes.
Of course, virtually no one really believes that all taxation is illegitimate because it takes what
belongs to us without our consent. Everyday libertarianism is, as we have said, a muted or
confused version of the real thing. Nevertheless, the confused idea that net income is what we are
left with after the government has taken away some of what really belongs to us certainly helps
explain the conviction that the pretax distribution of material welfare is presumptively just (how
could a distribution that gives people precisely what they are morally entitled to be unjust?), and
that the question of justice in taxation is therefore properly a question of determining what is a
fair distribution of sacrifice as assessed from that baseline.
We can comment more briefly on the other powerful influence, the idea of desert. Market returns
are to a certain extent affected by a person's effort and willingness to take risks. Since that is so,
it can seem preposterous to those who are both better-off and very hard-working to suggest that
they do not deserve to be paid more than others who may be lazy and unadventurous. And,
perhaps because people care more about what unjustly harms them than about what unjustly
benefits them, they can easily ignore the fact that some of the other factors contributing to their
economic success are not in any sense their responsibility and therefore can be said to
end p.35
have produced advantages that are not deserved. The natural idea that people deserve to be
rewarded for thrift and industry slides into the much broader notion that all of pretax income can
be regarded as a reward for those virtues. Here too, a normative concept is being taken beyond
the context in which it legitimately applies.
So the unreflective ideas that we have unqualified moral entitlement to what we earn in the
market and that higher market returns are in some sense deserved as a reward arise naturally
within the everyday outlook of participants in a capitalist economy. It is true that almost nobody
follows through on the idea that a market-generated distribution of welfare is intrinsically just—
nearly everyone accepts the need for some kind of public assistance to the destitute, and not even
the most radically antiegalitarian politicians argue for a tax scheme without a significant personal
exemption. Nonetheless, everyday libertarianism has a distorting effect, for these exceptions to
the libertarian outlook tend to be regarded as charitable gestures that do not challenge the basic
approach to distributive justice. By placing the burden of proof on departures from market
outcomes, everyday libertarianism skews the public debate about tax policy and distributive
justice.
Tax policy analysis needs to be emancipated from everyday libertarianism; it is an unexamined
and generally non- explicit assumption that does not bear examination, and it should be replaced
by the conception of property rights as depending on the legal system that defines them. Since
that system includes taxes as an absolutely essential part, the idea of a prima facie property right
in one's pretax income—an income that could not exist without a tax-supported government—is
meaningless. There is no reality, except as a bookkeeping figure, to the pretax income that each
of us initially "has," which the government must be equitable in taking from us. It isn't that there
are no questions of equity here—justice is central to the design of property rights—only that this
is the wrong way to pose them.
The tax system is not like an assessment of members of a department to buy a wedding gift for a
colleague. It is not an incursion on a distribution of property holdings that is already
end p.36
presumptively legitimate. Rather, it is among the conditions that create a set of property
holdings, whose legitimacy can be assessed only by evaluating the justice of the whole system,
taxes included. Against such a background people certainly have a legitimate claim on the
income they realize through the usual methods of work, investment, and gift—but the tax system
is an essential part of the background which creates the legitimate expectations that arise from
employment contracts and other economic transactions, not something that cuts in afterward.
There is no default answer to the question of what property system is right—no presumptively
just method of distribution, deviations from which require special justification. The market has
many virtues, but it does not relieve us of the task of coming to terms with the real values at
stake in tax policy and the theory of distributive justice. There are no obvious answers to the
range of questions about distributive justice we will pose in the next chapter; but one thing that
should be obvious is that those questions must be faced by tax theory.” […]

Pagina 64: “Clearly, a minimal form of economic freedom is essential to a liberal system: the
freedom to hold personal property with discretion to do what one wants with it. The question,
though, is whether a much larger economic freedom than this—freedom to engage with minimal
hindrance or conditions in significant economic activity of the sort that drives a market economy
—belongs with the basic human rights as part of the authority that each of us ought to retain over
our own lives. If so, government incursion on that liberty through fiscal policy would be suspect
and might require exceptionally strong justification.
end p.64
In the extreme libertarian version of this view, the only justification for such interference would
be the protection of these and other comparably important individual rights themselves. Thus,
government interference with economic liberty through taxation would be justified to support
national defense, a judiciary, and a police force, in order to ensure that freedom and security are
preserved and contract and property rights enforced. No taxation merely to promote the general
welfare, or to secure distributive justice or equality of opportunity, would be permissible.
But even if one does not take the libertarian sanctification of economic liberty that far, it would
be possible to hold a position with libertarian elements, according to which restrictions of
economic freedom were prima facie objectionable, so that taxation for the general good could be
justified only in exceptional cases. It seems clear that some of the political opposition to taxes in
the United States reflects such an outlook. And as we argued in chapter 2, an unexamined
"everyday" libertarianism seems to be a tacit assumption of much of the traditional tax policy
literature.
The view is that government should make it easy for individuals to engage in cooperative
economic activity, by protecting property and seeing that contracts are enforced, but that it
should not constrain the forms of those activities or encumber them with collateral conditions
like taxes or zoning or environmental regulations unless absolutely necessary—because people
should have a right to do what they wish with their property provided they don't hurt others.
Sometimes these laissez-faire policies are also supported on consequentialist grounds—as best
for the general welfare—but they usually reflect a rights-based, deontological political morality.
The division of opinion here is fundamental. Egalitarian liberals simply see no moral similarity
between the right to speak one's mind, to practice one's religion, or to act on one's sexual
inclinations, and the right to enter into a labor contract or a sale of property unencumbered by a
tax bite. Denying the latter, they believe, is just not the kind of interference with autonomy that
centrally threatens people's control over their lives. Some forms of personal discretion—
including the basic
end p.65
Hegelian right to hold personal property—are at the core of the self, but unimpeded economic
freedom is not one of them.
Libertarians, however, are convinced that the govern- ment's sticking its hands into a transaction
between private individuals, raising its cost by requiring that some percentage of what is
exchanged be diverted to the public treasury, is a gross incursion on personal liberty, justifiable
only for grave reasons, like those that justify the use of police power to prevent crime.
The libertarian conception of property as a prepolitical moral notion is based not on the idea of
moral desert but rather on the idea of moral entitlement. Each person, on this view, is in certain
respects inviolable. It may not make sense to say that we deserve to be who we are and to have
the capacities and endowments we have, but they are ours, to use as we see fit. Our original
sovereignty over ourselves—a moral given, not created by the state—leaves us free to employ
our capacities and implies that others have no right to interfere with that freedom, unless in using
it we transgress the rights of others.
The state cannot change this. It is not a collective arrangement whereby we all own shares in
each other, which we can exploit for the common good. Rather, each of us has the right to decide
what to do with our own capacities, and how to dispose of the product of any enterprise,
individual or cooperative, that we have voluntarily undertaken. The state has no more right to
demand a cut of the profits for redistribution in exchange for its maintenance of the peaceful
conditions of cooperation than it would have to demand adherence to a particular religion for the
same reason. To champion other liberal rights while belittling economic freedom is morally
inconsistent. That is the libertarian position. Though we are out of sympathy with it, it evidently
has considerable appeal and exercises a real influence in political debate.”

[…]

Pagina 74: “The conviction that determines our approach to all more specific questions is that
there are no property rights antecedent to the tax structure. Property rights are the product of a set
of laws and conventions, of which the tax system forms a part. Pretax income, in particular, has
no independent moral significance. It does not define something to which the taxpayer has a
prepolitical or natural right, and which the government expropriates from the individual in
levying taxes on it. All the normative questions about what taxes are justified and what taxes are
unjustified should be interpreted instead as questions about how the system should define those
property rights that arise through the various transactions—employment, bequest, contract,
investment, buying and selling—that are subject to taxation.
Putting it this way will bring up many of the same considerations that arise in more traditional
versions of the debate, but they will be applied to the evaluation of the entire system of rules and
its results, not to the justification of incursion on a presumed natural right. People do have a right
to their income, but its moral force depends on the background of procedures and institutions
against which they have acquired that income—procedures that are fair only if they include
taxation to support various forms of equality of opportunity, public goods, distributive justice,
and so forth. Since income gives rise to clear moral entitlement only if the system under which it
is earned, including taxes, is fair, entitlement to income cannot be used as an assumption to
evaluate the fairness of the tax system.
While this conventionalism seems to us just like common sense, we recognize that it goes against
a natural illusion of a kind that arises whenever the conventions governing a practice are so
pervasive and deeply buried that they become invisible. It is true of the conventions of language,
which seem natural, even though we know they are highly arbitrary. To say that the pig is rightly
so called—on account of its eating habits and tendency to wallow in the mud—would be a joke:
treating the conventional meaning of the word as a fact of
end p.74
nature, and then using it to justify the convention, in other words to justify itself.
The conventionality of property is even more elusive than the conventionality of language, and it
is easy to lose hold of the idea that the wage for which you agree to sell your labor, and which
your employer agrees to pay you, is merely a bookkeeping figure. It has only an indirect relation
to the property rights over disposable income that will result from that transaction under the
existing legal system, and what it legally entitles you to is morally legitimate only by virtue of
the legitimacy of the system. Conventionalism keeps being pushed aside under pressure from an
unanalyzed simple intuition of what is mine and what is yours. But that intuition in fact depends
on the background of a system of property law: it can't be used to evaluate the system.
Evaluation must decide how "mine" and "yours" ought to be determined; it cannot start with a set
of assumptions about what is mine and what is yours. The right answer will depend on what
system best serves the legitimate aims of society with legitimate means and without imposing
illegitimate costs. That is the only way an essentially conventional system of property, and
therefore a tax scheme, can be justified. The justification may refer to considerations of
individual liberty, desert, and responsibility as well as to general welfare, equality of
opportunity, and so forth. But it cannot appeal, at the fundamental level, to property rights.”
end p.75

pagina 174: “Where our approach departs greatly from the standard mentality of day-to-day
politics is in our insistence on the
end p.174
conventionality of property, and our denial that property rights are morally fundamental.
Resistance to traditional concepts of tax fairness and their political analogues requires rejection
of the idea that people's pretax income and wealth are theirs in any morally meaningful sense.
We have to think of property as what is created by the tax system, rather than what is disturbed
or encroached on by the tax system. Property rights are the rights people have in the resources
they are entitled to control after taxes, not before.
This doesn't mean we can't speak of taking money by taxation from the rich to give to the poor,
for example. But what that means is not that we are taking from some people what is already
theirs, but rather that the tax system is assigning to them less that counts as theirs than they
would have under a less redistributive system that left the rich with more money under their
private control, that is, with more that is theirs.
This shift to a purely conventional conception of property is, we acknowledge, counterintuitive.
Taxes are naturally perceived by most people as expropriations of their prop- erty—taking from
them some of what is originally theirs and using it for various purposes determined by the
government. Most people, we assume, instinctively think of their pretax income as theirs until
the government takes it away from them, and also think the same way about other people's
earnings and wealth. Political rhetoric picks up on this natural way of thinking: "You know
better what to do with your money than the government does." "The surplus doesn't belong to the
government; it belongs to the people."
Changing this habit of thought would require a kind of gestalt shift, and it may be unrealistic to
hope that such a shift in perception could easily become widespread. It isn't that people are
unwilling to pay taxes, but they tend to think of taxes as an incursion by the government on a
prior distribution of property and income by reference to which expropriation and redistribution
has to be justified. That question has the form: "How much of what is mine should be taken from
me to support public services or to be given to others? How much of what others possess should
be taken from them and given to me?" Whereas we have been arguing that the right
end p.175
question is: "How should the tax system divide the social product between the private control of
individuals and government control, and what factors should it cause or permit to determine who
ends up with what?"
As we have seen, putting the question this way still leaves room for radical disagreement about
the answer, but it is likely to arouse strong resistance nonetheless. It sounds too much like the
claim that the entire social product really belongs to the government, and that all after-tax
income should be seen as a kind of dole that each of us receives from the government, if it
chooses to look on us with favor. To this the natural indignant response would be that just
because we are all subjects of the same state, it doesn't follow that we collectively own each
other, together with our productive contributions.
But there is a misperception here. It is true that we don't own each other, but the correct place for
this observation is in the context of an argument over the form of a system of property rights that
gives due weight to individual freedom and responsibility. It doesn't justify starting with pretax
income—over which individuals couldn't, as a matter of logic, be given full private control—as
the baseline from which departures must be justified.
The state does not own its citizens, nor do they own each other collectively. But individual
citizens don't own anything except through laws that are enacted and enforced by the state.
Therefore, the issues of taxation are not about how the state should appropriate and distribute
what its citizens already own, but about how it should allow ownership to be determined.
We recognize that it is a lot to hope that this philosophical point should become psychologically
real to most people. Pretax economic transactions are so salient in our lives that the
governmental framework that determines their consequences and gives them their real meaning
recedes into the background of consciousness. What is left is the robust and compelling fantasy
that we earn our income and the government takes some of it away from us, or in some cases
supplements it with what it has taken from others. This results in widespread hostility to taxes,
and a political advantage to
end p.176
those who campaign against them and attack the IRS as a tyrannical bureaucracy, trying to get its
hands on our hard- earned money.
If political debate were not over how much of what is mine the government should take in taxes,
but over how the laws, including the tax system, should determine what is to count as mine, it
would not end disagreements over the merits of redistribution and public provision, but it would
change their form. The question would become what values we want to uphold and reflect in our
collectively enacted system of property rights—how much weight should be given to the
alleviation of poverty and the provision of equal chances; how much to ensuring that people reap
the rewards and penalties for their efforts or lack thereof; how much to leaving people free of
interference in their voluntary interactions. It is not ruled out that the preferred system would be
one that denied the state substantial responsibility for combating economic inequality; but that
position could not rely on the support of pretax property rights.
The difficulty of trying to produce such a shift to a conventionalist mentality is that people are
rightly jealous of their property rights in what is genuinely theirs—what the law puts under their
discretionary control—and these possessive sentiments don't naturally restrict themselves within
the boundaries of after-tax resources, which seem too abstract. In fact, it is pretax income that is
an abstraction, but those are the numbers that wage or salary earners are most familiar with. It
would not be easy to displace the feeling that they represent the starting point from which taxes
are a departure, and that poses an obstacle to the political influence of many theories of justice.”