Taxation as investment

Okay let’s face it, nobody really likes paying taxes. Taxes mean goods and services cost more and we see less in our pocket at the end of the day. But rather than viewing taxes as a negative, we should view them as a positive investment in the current and future state of our country. While savings and investments can hurt us in the short term, over a longer period of time they bring us many positive and important benefits.

Let’s start with an easy one: excise taxes. These are taxes on specific goods usually with the aim of discouraging use. They help overcome the problem of market failure caused by negative externalities. One example is petrol. When a buyer and seller agree to a price for this good they are taking into account the personal cost and benefit of exchanging a certain volume of fuel for a certain price. What they are not taking into account is their negative impacts of the rest of society. Using more petrol means the buyer and seller are contributing to pollution, global warming, traffic congestion, and negative health effects like higher asthma rates. By leveling an excise tax, the government makes sure more transaction costs are paid for and not passed on to unwilling third parties, including future generations. Even better, the government can take this revenue stream and use it to help mitigate the effect of excise taxes of poor citizens and to start developing alternatives so the negative consequences of the market are eliminated entirely.

So what about property taxes? This will depend on your view of property rights. I find it rather difficult to believe in absolute property rights because I do not see how a legitimate ownership assertion can be made over a non-owned resource in the first place. If the original ownership claim is illegitimate then any sale or inheritance of that resource is insufficient to continue asserting absolute ownership. On the other hand, it would very be difficult to run a functional economy without the convenient fiction of property rights. These rights allow stability and development, taking them away completely would allow resources to change hands so many times that nothing could get done. But the cost of allowing these property rights has to be paid by the people who gain the advantages. Property taxes are the compensation owed to the wider community who are giving up their claim to your resources in order to allow you to benefit. These taxes can then be used to support others who missed out on the appropriation of resources or to develop public property such as roads and parks that benefit everyone who wishes to use them.

Finally, income taxes. Wealth is not earned in a vacuum; it is instead the result of a well developed and functioning society. Taxes pay for education, health services, transport networks, safety inspections, police, fire-fighters, and the justice system – all the things that keep a modern nation a vibrant place to do business. An income tax is a fundamental part of this system allowing the provision of all these services – it is the cost of earning a living in this type of society. If you are not paying for the services you use, then you are not doing your fair share. Income taxes are not imposed, but are agreed as part of taking on employment. They are part of your employment agreement and, as everyone knows a priori income will be taxed, there’s no excuse for calling it coercion. Further, income taxes can be made highly progressive helping to increase equality within a society. Benefits can even be given to those with low pay packets boosting their incomes. With higher wage equality comes higher levels of employment and a sustained demand for goods and services in what is called ‘wage-led growth’. This is the Scandinavian model of development and has proven itself to be one of the fairest ways to organise a growing economy while maintaining a healthy, happy population.

The results of a sensible tax investment can be seen in more efficient markets that take account of externalities, as compensation for allowing some unequal access to resources, and producing a vibrant and egalitarian economy with a happy population. I for one am happy to invest in this kind of future.

Science vs religion: the effect of education

A new sociological study of UCLA undergraduate students has been getting some play in the sceptical blogosphere. Since it relates to some previous blog posts I have written on the LoR I thought I would go through it. Basically, a UCLA organisation called the Spirituality in Higher Education Project (SHEP)1 surveyed the religious opinions of the first-year population on campus. They then followed up with another survey of juniors to identify opinions influenced by several years of higher eduction. The study in question (Scheitle, 2011) focuses on the students’ perception of the relationship between religion and science.

Students could choose between four options to describe their view on this relationship.

Conflict – I consider myself on the side of religion
Conflict – I consider myself on the side of science
Independence – they refer to different aspects of reality
Collaboration – each can be used to help support the other

Categories three and four were lumped together into a ‘non-conflict’ answer.

Of this sample 83% of the students were religious. Unsurprisingly then, this means that 86% of the respondents went with non-conflict (69%) or sided with religion (17%). That leaves 17% non-religious students, 14% of whom sided exclusively with science. Given the large proportion of Christians in the US and that most are not of the fundamental variety, meaning they will have their science and eat it too, this seems a fairly straight-forward result.

Interestingly by their junior year, 73% of those who had originally sided with religion had come to adopt a non-conflict or pro-science position. This shift perhaps reflects the secularising effect of education. However, 47% of those who had originally picked science had also shifted their position. Not as large of a percentage of those who changed from a pro-religion stand-point but a substantial proportion of students. Even when the researcher looked into the data for only science students, the moderating effect of education was still present. Apparently, learning more about science decreased the view that science and religion were in conflict.

What I would have liked to be able to look at is the detailed data for both the independence and collaboration viewpoints instead of having them lumped together in a single category. If it’s correct that more education promotes a more secular viewpoint I would expect to see the ‘independence’ category increase. Whereas if education was actually supporting religion, I would expect to see a growth in the number of students picking ‘collaboration’. With the data in their current form, it’s impossible to make such judgements.



SHEP is funded by the Templeton foundation; any true sceptics will now hum the Jaws theme.

Scheitle, C. P. (2011) U.S. College Students’ Perception of Religion and Science: Conflict, Collaboration, or Independence? A Research Note. Journal for the Scientific Study of Religion, 50(1), 175-186.