CCCLVIII – Zippy on Property Taxes and Currency

I was reading Zippy again, here comes trouble. I stumbled upon some comments of his in the wild on other sites and just really admire the clarity and force of his arguments. Now that I grok his points, his arguments are very frustrating to witness. He is saying things very clearly and it is literally only the blindfolds of his interlocutors that prevent them from understanding him. He was extremely patient at answering respectful questions and extremely diligent at ending the conversation the second it turned south.

So, one thing led to another and I end up at this article by Zippy that touches on Property Taxes and all my old gears started spooling up again.

This article is going to be a stab at restating Zippy’s argument in a way that I can understand so that when I try to fit my ideas of currency into it, I am speaking from an intelligible place.

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“Usury is rent charged for something which does not actually exist. Thus usury is unjust: it is (…) a something-for-nothing taking from the borrower.”

“The value imputed for the property tax rests on the mere potentiality of selling the property for its assessed value. There isn’t any actual sale for actual dollars; there is merely a potential sale which does not in fact occur.”

“If it is intrinsically unjust to charge rent for something which doesn’t actually exist, it is also intrinsically unjust to tax what does not actually exist.”

These are the key premises according to Zippy.

There are some assumptions:

• Currency as tax vouchers
  • This is the best explanation of the tax vouchers thesis I’ve seen from him so far: Currency has value as a means of exchange because it can be used to pay taxes.
    • I don’t agree with this because it feels tautological. I will revisit it in a subsequent post if I don’t touch on it here.
• Property taxes are a tax on the potential sale.
  • I think there is an argument to be made that property tax is rent for use of sovereign land, and the assessed value is just a macguffin for calculating that. Zippy’s approach might be realist in that sense but I think it accidentally uses the wrong part of the transaction as the fulcrum for realist analysis.

Lets start digging into this with our ideas.

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Currency and Taxation Revisited

I don’t like the tax vouchers idea because it is tautological. Currency has value because the sovereign accepts it as payment of taxes. It reduces the function of the sovereign to that of a tax administrator, and it presumes that currency is freely in circulation and the sovereign could accept empty cans of cola in payment but it chooses to accept greenbacks.

Currency is more complicated than that because only the sovereign can issue it, the medium of the currency itself doesn’t have to have any value whatsoever, and the exchange rate for real property changes based on the amount in circulation. Note that the issuance, valuation, and exchange of currency has nothing to do with taxation. Taxation is a separate function of the sovereign, and by no means the only function of the sovereign.

Taxation is a lawful function of the sovereign, and takes the form of a levy of property kind of like the draft is a levy of personnel. The specific mechanism of taxation can be just or unjust, but in principle taxation is allowed to the sovereign.

The easiest to understand and most just form of taxation is a direct levy. The sovereign says “I need One Billion scootbucks for some public good” and sends the bill down the chain such that every citizen of Scootland gets their portion of the billion scootbuck levy.

Progressive taxation changes the amount of the levy for each person based on their accumulated property. A person with more property has to pay a higher levy. A person with less property has to pay a lower levy.

Sales taxes are intelligible because they are a standing levy on economic activity. If taxation is “returning to Caesar that which is Caesar” then it is analogous to “pouring one out” for the boys–sacrificing the first part of a drink or a meal in homage to God or ones friends of fond memory. Sales tax is saying the first part of your economic activity should be to give a token to the Sovereign and the rest is barter between willing parties. Sales taxes are inherently progressive because people with more property have more means for transacting and so naturally transact more and pay more as a proportion of their income to the sovereign.

Income taxes are complicated, but it is similar to the Sales tax in that you are paying the first part of your economic activity to the sovereign. I receive a wage of SB100 and pay SB1 in homage to the sovereign so I take home SB99. Sales and Income taxes avoid the levy system and allow the sovereign to have a standing order of property from the people, in the form of default tokens received from economic activity.

This brings us to property taxes. Zippy’s thesis that property tax is a tax on a potential sale doesn’t make sense to me, because it’s not economic activity. It’s a tax on the property itself, as the name implies. As I suggest above, property tax could be construed as rent for use of a portion of the sovereign land. But if that were true, everyone’s property tax bill would be identical per unit of that land. What makes property taxes confusing is that they are based on the improved value of that land–improvements which the sovereign had no hand in other than to authorize via the delegated authority to acquire property that is currency. I would argue that the thing that makes property taxes unjust is the reliance on the improved value. It would be OK if property tax was merely a charge for use of property. This has negative economic consequences, sure, but at least if everyone had the same tax per acre then it would be intelligible and “equal”. Charging for the improved value penalizes improvements, and provides an economic disincentive. It is unjust the same way a progressive levy is unjust, because it penalizes people for the arbitrary reason of having property and not for the intelligible reason of using property.

Of course, the use of property does not automatically make a tax just, just that it does a better job of treating all subjects to the sovereign as equal in his paternal eyes. The benefit offered to the poor is taken away by the injustice done to the rich.

So, to quote the inimitable Zippy:

“Thoughts?”

AMDG

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EDIT:

AHA! I feel very affirmed, I followed some links to the previous article and ended up at the Orthosphere. Zippy says in a comment there:

Again, precisely what is at issue is if it is possible for the sovereign to commit theft against his subjects (whether he labels it a “tax” or not), and under precisely what conditions.

Someone might contend that it is not — that all ownership is merely delegation of sovereign authority rather than a distinct authority in its own right under the natural law. But playing games with labels (“tax”) and declaring taxation licit is just a pointless nominalist rhetorical gambit which attempts to avoid what is at issue rather than addressing it.

My theory of currency is derivative of this: Currency represents future property, so it is a stand in for ownership until the unit of currency can be traded for a unit of real property. The delegated authority follows. Zippy is aware of this logical conclusion but did not follow it through to the currency used to acquire property. I don’t know why.

I’ll count this as a win though, it is nice to see I am not treading any new ground just discovering old ground that is so well worn as to be unrecognizable!

CCLXXXIV – One Flesh

In Scripture, we see Adam and Eve referred to as “Bone of my bone, flesh of my flesh”. This is unifying oneness, two becoming one before God. The sacrament of Marriage mirrors this. We also see this language used to refer to Kings: From 2 Samuel 5:1-4:

Then all the tribes of Israel came to David in Hebron, saying: “Behold we are thy bone and thy flesh. Moreover yesterday also and the day before, when Saul was king over us, thou wast he that did lead out and bring in Israel: and the Lord said to thee: Thou shalt feed my people Israel, and thou shalt be prince over Israel.”

The ancients also of Israel came to the king to Hebron, and king David made a league with them in Hebron before the Lord: and they anointed David to be king over Israel. David was thirty years old when he began to reign, and he reigned forty years.

In this case, the people acknowledge David as being victorious in his battles and claim they are united to him in the same way a husband and wife are united–as bone of bone, flesh of flesh. David begins his reign over Israel as a father rules over his children, with custodial care for his family.

This is the care with which a sovereign must reign, it makes explicit that duty of care and that the role of sovereign is not a mere title to be claimed but a distinct responsibility. A husband must care for his wife, and a wife must care for her husband–the relationship goes both directions, but each has a duty to each. So to between a Sovereign and a people.

It is this dynamic that becomes complicated in a democracy. If the people are sovereign, as I have argued, then to whom do the people cleave? Themselves? To whom is owed a duty of custodial care? From whom is received that care? There’s no way to ease into the punchline: Democracy is narcissism. A people promising to love and honor themselves, and take care of themselves, and they don’t need anyone else. The sovereign marriage is between a sovereign and a people–in democracy, a people are married to themselves. The analogy is a husband marrying himself, promising to take care of himself and rule over himself. It is fundamentally incoherent. This is why Democracy, and the Liberal ideology from which it arises, is disastrous.

In such a condition, the people usurp the position and power and responsibilities of the missing spouse, the sovereign. All ownership is derived from the sovereign, but without the sovereign the logic is recursive. All ownership is derived from the people, and the people receive from themselves the delegated authority to acquire property, and they promise to use it to the ends selected by themselves for the custodial care of themselves. What?

Since the French Revolution, liberal institutions and democracies have been sustained but they must be fed and fueled. They must be balanced by something. It takes energy, consumes effort to sustain such an unnatural dynamic. I can’t predict the future but the instability we are seeing here in the USA and which is apparent in democratic societies around the world is directly related to this unstable dynamic.

It is this understanding of the Sovereign that will inform the rest of our discussions on the topic.

AMDG

CCLXXVIII – All Ownership Is Derived From The Sovereign

Or, The Sovereign & Property, Part 3 of 3

In Part 1, we discussed duties owed to the sovereign by the subject. In Part 2, we discussed some of the duties owed to the subjects by the sovereign. Here, we bring it all together with the idea of ownership.

Ownership is a lesser order of authority than sovereignty. To be sovereign obliges all the people and their property to be subject to the authority of the sovereign. To be an owner obliges only the thing owned to be subject to your authority.

Private property is an element of natural law, this means that it is proper to Man to have property of his own. What this also means is that it is proper to the sovereign to permit private ownership. Communism attempts to abrogate the private property aspect by returning all property to the sovereign; yet communism demands that the sovereign retain the duty of custodianship to the people and administer all that property for the good of the people. This is disordered not only because it abrogates private property but because it doesn’t change the relationship of the people to the sovereign. The sovereign does have a duty of custodianship to provide for the needs of the people, private property means, in other words, that people have a responsibility to determine the best way to satisfy their own needs. Currency permits this dynamic: The sovereign cannot be everywhere therefore the sovereign delegates authority via tokens which the people can use to acquire property which the sovereign ought to be providing for them.

However, the sovereign ought to provide because the sovereign has authority over all property. All property is subject to the Sovereign. Every inch of land, every ounce of raw material yet to be mined, every unit of processed goods which completed manufacture–all of this property is subject to the sovereign.

So this is the punchline: All ownership is derived from the Sovereign. Just as the Sovereign can delegate authority of West Scootland to the Duke of Scootland, the Sovereign can delegate authority of this computer I am writing on to me via ownership. The Duke rules West Scootland as a representative of the Sovereign, not as owner of West Scootland. I rule over this computer not as representative of the sovereign but as owner of it. In the former case, the Duke and West Scootland remain subjects to the Sovereign, but the Duke administers the province on the sovereigns behalf. In the latter case, the Computer and I remain subjects of the sovereign, but I can dispose of the property in whatever way best suits my needs.

The principle that describes this phenomenon is subsidiarity, the principle that problems should be solved at the closest possible level to the problem. The problem I have is that I need food, clothing, and shelter. Subsidiarity suggests that it would be inefficient for the sovereign to solve this problem for me, I must solve this problem for myself.

What is interesting to me is that implicit in all this is the virtue of an Aristocracy. Aristocracy, like the Sovereign, have a custodial duty to the people. Contrast this with Bureaucracy, who have a duty of efficiency to the Bureaucracy itself. Aristocracy have an obligation to treat people as people and to be the caring face of the sovereign. Bureaucracy have an obligation to administrate with profit motive, which we’ve already established does not imply public good.

I don’t know if these arguments make me a monarchist–it would be interesting to take this perspective and analyze our democracy with it; also to see what controls are necessary to prevent a monarchy/aristocracy from becoming a tyranny.

AMDG

CCLXXVII – Fun Sized Aristocracy

Or, The Sovereign & Property, Part 2 of 3

I mentioned I’ve been watching Downton Abbey and it has been an interesting peek into the world of turn-of-the-century British Aristocrats. In the early episodes there was a lot of talk about the “house” or the “estate” and the nearby town but it took me a while to realize that the main family were politicians. To be an Earl is a sufficiently foreign concept to me that it is meaningless, but I know what it is to be a Mayor. The patriarch of the family in the TV Show is the Mayor of a town, and when he dies his heir will be the Mayor. He didn’t choose that life but he has that life and he must rise to the occasion for the good of the residents of the town over which he is Mayor.

The premise here is that in order to be a good Mayor he has to take his responsibilities seriously, and in order to ensure that he remains a good Mayor he has to make sure his kids understand the responsibilities and are capable of taking them seriously, too. The order of precedence is something like this: His kids must understand how to take care of themselves, how to take care of their family, how to take care of their subjects, how to take care of their community, how to take care of the state. More or less in that order.

In Part 1, I talked about how subjection is a higher order of authority than ownership, for both Sovereign and Subject. This means that it is a higher responsibility, even to be a subject. To put it this way, a subject of the Mayor has this order of precedence: They must understand how to take care of themselves, how to take care of their family, what duties are owed to their sovereign, how to take care of their community, how to take care of the state. Because they have no subjects themselves, they must be good subjects to the sovereign.

Implicit in the relationship between Sovereign and subject is a custodial relationship. The Sovereign must care for the needs of the subject, the subject must entrust themselves to the care of the Sovereign. These are lessons we don’t need an aristocracy to teach: teaching kids to be good subjects while simultaneously demonstrating being a good sovereign is important. It’s a fun-sized aristocracy you can enjoy at home, caring for your home the way a Mayor or Earl might care for a city or demesne.

An important part of all this which was mentioned in the previous article but is worth repeating: As subject, ones property must be disposed to the good of the Sovereign, or at least to the good of the order of precedence discussed earlier. Again, if we assume money is the delegated authority of the sovereign to make exchanges to provide necessities, then accumulating money is wasteful and the accumulation of luxury is disordered because it uses the sovereign authority to provide more than necessities and fails to provide for ones community or to return what is not needed back to the sovereign.

This is why wealth is a stumbling block to faith: luxurious wealth represents pride, usurping the authority of the sovereign to gives oneself the accidents of sovereignty. If we fully entrust ourselves to the care of the sovereign, accumulating excess is a failure in trust that the sovereign will provide.

This is why sacrificial giving is extremely important. Remind yourself that what you have is not yours, and you owe a duty to those around you.

AMDG

CCLXXVI – Change The Subject

Or, The Sovereign & Property, Part 1 of 3

We’ve talked a lot about Authority and we’ve talked a lot about Property and we’ve talked a lot about what it means to be a peasant, but we haven’t joined all of these ideas together, so here I will aim to do that. This is part one of a three part discussion on the relationship between Property and Sovereign.

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In a previous article I said the Sovereign kind of “owns” the state. That’s how it is possible for a unit of currency to represent the delegated authority of the sovereign to transact and provide for our necessities. Currency comes to be a kind of allowance from the Sovereign. Let me back up for a second, because I am getting ahead of myself. Here is the relevant excerpt from my previous article:

In ownership, it means the King owns the land of the Kingdom. If a peasant carves out a patch of land for himself, he must buy that land from the King. The King may also fief land to nobles to rule a smaller, more manageably sized chunk of the Kingdom. All of this is a delegation of authority from the sovereign, and not an abrogation of authority. The Peasant has private property, but it is not independent from the domain of the King. Both the peasant qua subject and the land qua property belong to the king, but the peasant is given free exercise of the land insofar as the King respects private property.

Here is the conflict: What does it mean for the peasant to own private property and the King to control it? Who is losing–the peasant, for having to give some control to the sovereign; or the sovereign, for having to lose direct ownership to the peasant?

We know private property is an element of natural law from some encyclicals somewhere. So private property is a necessity when we are talking about this subject, we cannot invalidate it. But, neither can we get around an obligation to a sovereign. So lets start by thinking about what exactly private property is and build up from there.

Well, right now I think of private property as my computer on which I’m writing this article; or a pen I use to take notes; or the land on which I live. Its private because its mine, its property because it is not me.

We know also that ownership implies responsibility—we have the responsibility of disposing of our private property well, and for the glory of God and benefit of our neighbor, and with deference to the will of the sovereign.

Excursus: Property that is committed to the will of the sovereign is considered patriotic. Property that is underutilized is considered wasteful. Property that is committed against the will of the sovereign is sedition. Remember the Parable of the Talents? The parable is starting to make more sense the more I think about this. Same with the parable of the Rich Man and Lazarus.

Lets jump to the other side of the spectrum. When I talked about currency I argued that currency is delegated authority of the sovereign, which allows us to supply our own needs on his behalf. That means to a certain extent our money is like an allowance from the sovereign.

We see this in microcosm in a family. I give little Johnny a ten-spot to go buy baseball cards. The baseball cards are little Johnny’s property even if the money came from me. Little Johnny still has the responsibility of disposing of his allowance in a way that satisfies his needs and still glorifies God. There is no dispute that the baseball cards are little Johnny’s property even if he is subject to me.

You can think of Land in this way. The sovereign is responsible for the territorial possessions of his state. He “owns” the state—this is why when I buy a house I will still be an American citizen, private property doesn’t divest me from obligations to the sovereign. My property and I are still subjects to the sovereign.

We can think of ownership of property as a lesser order of authority or control when compared to Sovereignty. This is because ownership still is subject to the sovereign, while sovereignty is subject only to God. This is why the responsibility of the sovereign is very great, and the responsibility of the peasant is comparatively minute.

To be subject means that we live in the lesser order of authority, and give the better part of our deference to the Sovereign.

While the focus of this article is on our earthly sovereigns and material possessions, it is worth making the spiritual parallel explicit. We are all subject to God, which means we owe God the greater part of our deference and we owe an obligation of Worship. God has given us all our spiritual property: our gifts, talents, blessings, health, life, relationships, even our material property. We thus have an obligation to use these things for His greater good, for the good of the King of Kings, the Sovereign of Sovereigns. God is an infinite being and has provided everything to us directly, how much more do we owe him as dutiful, patriotic subjects?

More to come, keep an eye out for Part 2.

AMDG