The Answer to the Question Why There Is Steadily Increasing Taxation Is This: A Dramatic Change in the Idea of Justice Has Taken Place in Public Opinion

On a highly abstract level the answer to the question why there is steadily increasing taxation is this: The root cause for this is a slow but dramatic change in the idea of justice that has taken place in public opinion.

Let me explain. One can acquire property either through homesteading, production, and contracting, or else through the expropriation and exploitation of homesteaders, producers, or contractors. There are no other ways. Both methods are natural to mankind. Alongside production and contracting there has always been a process of nonproductive and noncontractual property acquisitions. Just as productive enterprises can develop into firms and corporations, so can the business of expropriating and exploiting occur on a larger scale and develop into governments and states. That taxation as such exists and that there is the drive toward increased taxation should hardly come as a surprise. For the idea of nonproductive or noncontractual appropriations is almost as old as the idea of productive ones, and everyone—the exploiter certainly no less than the producer—prefers a higher income to a lower one.

The decisive question is this: what controls and constrains the size and growth of such a business?

It should be clear that the constraints on the size of firms in the business of expropriating producers and contractors are of a categorically different nature than those limiting the size of firms engaged in productive exchanges. Contrary to the claim of the public choice school, government and private firms do not do essentially the same sort of business. They are engaged in categorically different types of operations. . . .

With public opinion rather than demand and cost conditions thus identified as the constraining force on the size of government, I return to my original explanation of the phenomenon of ever-increasing taxation as “simply” a change in prevailing ideas.

If it is public opinion that ultimately limits the size of an exploitative firm, then an explanation of its growth in purely ideological terms is justified. Indeed, any other explanation, not in terms of ideological changes but of changes in “objective” conditions must be considered wrong. The size of government does not increase because of any objective causes over which ideas have no control and certainly not because there is a demand for it. It grows because the ideas that prevail in public opinion of what is just and what is wrong have changed. What once was regarded by public opinion as an outrage, to be treated and dealt with as such, has become increasingly accepted as legitimate.

--Hans-Hermann Hoppe, "The Economics and Sociology of Taxation," in The Economics and Ethics of Private Property: Studies in Political Economy and Philosophy, 2nd ed. (Auburn, AL: Ludwig von Mises Institute, 2006), 50-51, 57.