Nearly all recognize the value of freedom in the political sphere. It is wrong for the government to coerce us to speak, believe, or think contrary to our wishes, or to deprive us of our right to life without due process.
But it is equally necessary to realize that economic freedom is a necessary component of political freedom. If the government tells me how much of my money I can spend, what I can or cannot buy, where I can or cannot work, or what prices I can charge for goods that I produced, I am not free. I am being constrained to act, rather than allowed to act in accord with my voluntary and free choice.
OK, so the government doesn’t tell us what we can buy or where we can work, so there’s no problem here. Right?
Well, fortunately nobody wants to take things to that extent. But have you ever considered the subtle role that taxation plays in hindering the economic freedom of the people in our nation?
Now, I’m not against taxes. I completely affirm that taxes are necessary and it is right for the government to tax.
The problem comes with excessive and overcomplicated taxation. The higher taxes are, the less free we are economically to spend our money as we choose. This is a real restriction on freedom.
This is why I would argue that it is a responsibility of government to keep taxes low — and on all income levels. If the fundamental purpose of government is to protect life and liberty (see previous post), then it follows that government has an obligation to keep taxes low and thus prevent the reduction of economic liberty.
The integral relationship between political freedom and economic freedom is one of the main points of Milton Friedman’s classic work Capitalism and Freedom. “Clearly, economic freedom, in and of itself, is an extremely important part of total freedom.” If I am not economically free, then neither am I politically free.
This is why it is not only bad policy, but also wrong in principle (given current tax rates and the current tax complexity) to raise taxes on those earning over $250,000/year. (Plus, it doesn’t work.)