Taxing Our Privacy

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Nary a week goes by anymore that I’m not subjected to some news story about how corporations are using my personal information for marketing purposes and contributing to the flood of junk mail that streams into my mailbox. Apparently, there are people out there who are looking at what I have bought in the past and are plotting to get me to buy more stuff in the future. They may succeed yet. Those evil geniuses! Well, I’m told that this is a very bad thing. The next Congress is supposed to be just aching to fly into action with so called “privacy legislation” that will keep people from using my personal information for marketing purposes. What a waste of time.

As usual, the government is the biggest part of the problem that the government proposes to solve. They talk plenty about keeping our information our own, but they never dare talk about the granddaddy of all privacy violations: the income tax. Every year, Americans are forced under threat of fines and imprisonment to report to the government everything about the money they made, where they got it, the stuff they bought, and where they got that stuff. The government then snoops through all of your financial records and decides if you are telling the truth or not. If they decide you’re not, they ruin your life. It’s a pretty simple relationship. Tell them everything they want to know, or else.

The income tax has been rightly criticized for the massive wealth confiscation plan that it is. The real effects of the income tax go far beyond simple economics, though. Even if the tax rate were one tenth of one percent, the privacy that all taxpayers must forfeit is a huge price to pay. If the income tax demanded hardly any money from us at all, we would still need to keep all of our financial records, report them to snooping federal employees, and then wait and hope that they don’t decide to come after us. It’s unbelievable that anyone could ever defend such a plan with a straight face: “Okay folks, here’s how it works. Tell us everything. If we’re not sure about the veracity of your claims, we’ll call your employer and your banker to check up on you. Remember, it’s your patriotic duty to pay up!” Sounds like a pretty sweet deal.

Karl Marx knew what he was doing when he included the graduated income tax as one of the central tenets of the socialist society. The income tax does not only give government control over the money of the people it taxes, but it gives control over every other aspect of their lives as well. It allows the government to monitor wealth, spending, and earnings not just on the societal level, but on the individual level as well. Income tax returns are the best ways to track a person’s financial habits and to make sure he’s not doing anything the new Leftist puritans might disapprove of. In short, an income tax is the ultimate tool of government control over the individual and the economy. It is the foundation upon which the modern bureaucratic mega-state functions. Without it, government would have a much more difficult time making decisions about central planning and massive government programs.

The most pernicious part of the privacy giveaway inherent in the income tax is that, unlike participation in markets, it is not voluntary. Within the market place, the exchange of information is voluntary, and one can decide which entities to patronize and which to avoid. Yes, it is true, that corporations can exchange your information and hit you up with more and more promotional nonsense, but no one forced you to give out the information in the first place. A lot of people complain about how web pages can gain your information through “cookie” technology, etc. Fortunately, for the paranoid, there are plenty of anonymous surfing services out there to make sure that AT&T, Amazon.com, and especially the FBI can’t find out about your surfing habits. They’re free and easy. Ever try to pay your income taxes anonymously? Forget about it.

With government, giving out personal information is only voluntary if you don’t mind a few years in the slammer. You must send a report on everything dear to you to the IRS where some bureaucrat ready to go postal at any minute could use it for god knows what purpose. Yes, I know that it is illegal for the government to misuse my information, but since when have government employees let that stop them? The history of the FBI and the CIA hardly give one comfort in this respect. I’m not so sure I want “lawmen” like J. Edgar Hoover and Janet Reno in charge of protecting me from the government.

In the modern state, the income tax is the keystone, the lynchpin, the loose sweater thread. Pull it and the whole system unravels. Without the tax, there cannot be that direct government-citizen link that is so necessary in maintaining the modern nation state. Without it, the entire welfare state as we know it could not be administered. Only by monitoring income and personal finances can the government make decisions about rich and poor, and old and young. The income tax is the crucial gateway to government paternalism through Medicare, Medicaid, social security, the war on drugs, and a host of other nanny state provisions that require that government be able to watch us through the lens of the income tax.

In the coming years, government will wring its hands about internet privacy, and corporate use of information. At the same time, they will also be debating the merits of forcing us all to use medical ID numbers and federal identification cards. The hypocrisy is amazing. The proponents of the surveillance state feel deep within them that the government must know each and every one of us personally. They want to look out for our interests. The income tax lets them know if we need their attention or not. I suppose it’s kind of like having a big brother. There’s always someone there to keep an eye on you.

January 9, 2001

Ryan McMaken is a graduate student in American politics at the University of Colorado. He edits the Western Mercury.

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