Hoppe on the Economics of Taxation

In The Economics and Ethics of Private Property, Hans-Hermann Hoppe explains that taxes "...invariably reduce production, the consumers standard of living, obstructs wealth formation, and creates relative impoverishment."  Let's think about why that is the case.

"Taxation is a coercive, non-contractual transfer of definite physical assets (nowadays mostly, but not exclusively money), and the value embodied in them, from a person or group of persons who first held these assets and who could have derived an income from further holding them, to another, who now possesses them and no derives an income from so doing.”  - p 35

Think about the ways in which a person can acquire a valuable good? Hoppe explains there are four and only four ways:
1.Original Appropriation Through Homesteading
2.Production (mix of one's labor and previously appropriated goods)
3.Voluntary Exchange
4.Forcefully Expropriation / Theft

Option 4, of which taxation is a part, decreases the marginal utility of activities 1-3 and increases the marginal utility of consumption and leisure:

“Taxation raises the time preference...in the direction of an existence of living hand to mouth. Just increase taxation enough and you will have mankind reduced to the level of barbaric animal beasts.” p 36

“Contrary to any claim of a systematically “neutral” effect of taxation on production, the consequence of any such shortening of roundabout methods of production is a lower output produced. The price that invariably must be paid for taxation, and for every increase in taxation, is a coercively lowered productivity that in turn reduces the standard of living in terms of valuable assets provided for future consumption. Every act of taxation necessarily exerts a push away from more highly capitalized, more productive processes in the direction of a hand-to-mouth-existence.” p 42