When discussing taxes, there is a trope that seems to come back over and over again: we pay taxes in exchange for the services rendered by the government. Most commonly mentioned as services are infrastructure and the legal system. Most recently I saw it in the comments under Matt Yglesias’ post where he jokes that murder would be an appropriate way to deal with tax expatriation. (I must confess I do not see much that is amusing about murdering people for the crime of paying taxes to a different country than the United States.) The “logic” is that taxes pay for things such as the legal system, the enforcement of property rights, roads, etc… Those things are used by people to build their companies and as a result, it is proper that they pay for what they use.
There are too many things wrong with this argument to list. But there is one which suffices: the vast majority of taxes pay for transfer payments and the bloated defense department. So when you next hear that the rich should pay for the roads and courts which were necessary to make their fortune, it is often futile to speak of private roads and tribunals. Instead simply ask if from their tax bill, the rich should be allowed to deduct the price of medicare, social security and the much of the defense budget which do very little for them.