Taxes are the price we pay for a civilized society

The above quote is apparently to be found above the entrance to the IRS headquarters at 1111 Constitution Avenue, Washington DC and is attributed to Oliver Wendell Holmes. But there are many other variants that are equally attributed to the “The Great Dissenter”, such as “I like to pay taxes. With them I buy civilization”; “Taxes are the price we pay for civilization” and most intriguingly, a quote sometimes attributed to his father Oliver Wendell Holmes Sr, “I hate paying taxes. But I love the civilization they give me.”

The only real source of substance which can be readily found in relation to this quote is from a dissenting speech (of course!) in a 1927 US Supreme Court case:

“It is true, as indicated in the last cited case, that every exaction of money for an act is a discouragement to the extent of the payment required, but that which in its immediacy is a discouragement may be part of an encouragement when seen in its organic connection with the whole. Taxes are what we pay for civilized society”

What does this quote tell us about Oliver Wendell Holmes’ true attitude to taxes? It seems to suggest a more nuanced relationship than either love or hate, which the various incarnations of the quote suggest. It is somewhere between. An understanding of the need, but equally perturbed to the extent that the “exaction” discourages. As he proceeds to state in that case, underlining his familiarity with the “exaction”:

“to earn one’s livelihood by any lawful calling certainly is consistent, as we all know, with the calling being taxed” [emphasis added]

And deep down in our hearts, I don’t believe that we love paying taxes either. Intellectually we understand the importance of tax. Very few would decide amongst us to locate ourselves in the kinds of places, for instance, where taxes fall below 20% of GDP. However, when I go to the shop and pick up a can of Coke (well, Diet Coke-my teeth definitely cannot handle the sugar and I can’t handle another scolding from my dentist), I can’t say that I’m delighted that I pay VAT of 20%. Likewise I would frankly be much happier if I didn’t get a massive bill for council tax every year. And it really is massive when compared to my income – my effective income tax rate for last year was 0%!

But taxes do pay for civilization. They pay for our essential services, schools and health. They pay for the kind of services that I know are indispensible in the fight to increase social mobility, tackle poverty and reduce inequality, issues that I genuinely care so deeply about. But that equally doesn’t mean I’m happy to see public funds squandered and improperly used. I’m annoyed as the next person about expenses’ fiddling or pointless garden bridges. Bringing this back to my council tax woes for a minute, go to Google Maps and click on Finsbury Park (not the actual park or the tube station, just the area). You see it? You see the rubbish bin overflowing in the picture? I’m not exactly overjoyed that my massive Council Tax bill goes towards that non-collection of rubbish.

So what is there that can be learned from this? The first thing that could be attempted is to try to circumvent this inherent dislike of tax by not calling things taxes. But when there’s a political incentive from the opposing side to undermine any such attempts, this seems fairly futile. To this end, note how the “spare room subsidy” became the “bedroom tax” or the “community charge” the “poll tax”, as Stian Reimers cites in a brief, punchy article which more than merits a reading (h/t Jolyon Maugham QC). Even then, it’s not clear that the wool can be pulled over the electorate’s eyes even if a different label sticks. The introduction of the ‘water charge’ in Ireland has been met with a prolonged and popular campaign of protest for instance.

Or, maybe then it’s just time to have an open and frank conversation about taxes. About the need for both horizontal and vertical equity: that those in similar positions in terms of wealth should pay similar amounts and those in different positions pay different amounts. About the need for progressivity as adjudged across the entire system of taxes and benefits. About the fact that yes it is annoying when something is taken away from you, but about how what is “exacted” will either pay for things you need, or pay for the needs of those less fortunate. Politicians, the media and lay commentators also have a duty not leap upon the introduction of de facto taxes, or increases, or decreases, as if these themselves are intrinsically bad rather than looking at our overarching goals and whether any changes conform to these.

If taxes are what we pay for civilised society, then we ought to act like a civilised society when talking about taxes.


About taxatlincolnox

Tax law academic. With this blog, I seek merely to contribute to the debate. All thoughts are mine, of course.
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One Response to Taxes are the price we pay for a civilized society

  1. gaultfalcon says:

    Four things, the first three being contextual. First, people are born free. They are not ascribed freedoms by others just as they are not deprived of freedoms by others. Second, contrary to the popular belief of despots, dictators and bureaucratic do-gooders, people are not designed to be controlled. That is not to say that people will not bargain their freedoms away at the cost of being controlled by someone else but that is, and should be, an individual decision. Third, people will, if mentored in basic human decency, care for their fellow man without the direction or systematic encouragement of a governing body.

    With those three things as context it is easy to see why government’s history of long term success is abysmal. Whether you look at the rise and fall of the Roman empire, the rise and fall of the Third Reich or the rise and peak of the US the story is always the same. A free people incrementally trade their freedoms for comforts and shortcuts gladly provided by an ever expanding, centralized government. This government becomes, large, bloated, inefficient, inept, corrupt and, ultimately, bankrupt. In the process of self destruction the government incrementally absconds more and more of the earnings, land and freedoms of its constituents until there is a breaking point. History is littered with bloody revolutions, wars and coups that are examples of the result of this breaking point.

    What Leftists never seem to understand is that government is contrary to human nature. People think they want less freedom until they don’t have enough of it. Taxes are not the price for civilization. Taxes are a sign of a lack of civilization. The more taxes there are the less civilized the country is.


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