Analysis by Kyle A. Lohmeier
I realize that, to people who’ve lived their entire lives with the notion that paying taxes is the “price for living in a civilized society” that understanding the concept that taxation is actually theft is very difficult. To many, it sounds hyperbolic in the extreme to point out that taxes are nothing more than punishment for innovation and hard work. Most can’t even fathom that government actively helps its crony corporations while trying to hurt their competitors. Luckily, sometimes governments, being governments, prove my point in wonderfully black-and-white terms that are undeniable.
The state of Taxachusetts’ Republican Governor Charlie Baker just signed a law that imposes a twenty-cent-per-ride tax on ride-hailing apps like Uber and Lyft. A full quarter of the proceeds from that new tax will go directly to private taxi companies.
“I don’t think we should be in the business of subsidizing potential competitors,” said Kirill Evdakov, the chief executive of Fasten, a ride service that launched in Boston last year and also operates in Austin, Texas, according to a Reuter’s piece linked on Fortune-dot-com.
According to the same piece, some taxi owners, being the beneficiaries of the government’s violence, wanted the state to clamp down yet farther and ban all new start-ups that dare to compete with their ancient and dying business model.
As for the other fifteen cents per ride in the tax, the law states ten cents will go to cities and the last nickel will go into a designated transportation fund. I mean, the state needs to be compensated for beating up these competitors on behalf of taxi companies and their union employees. And, of course, muh roadz!
“The law says the money will help taxi businesses to adopt ‘new technologies and advanced service, safety and operational capabilities’ and to support workforce development,” reads a portion of the Reuter’s piece.
This is, of course, not capitalism. At all. If a company or entire industry needs to “adopt new technologies and advanced service” and cannot do so on its own, it should go out of business and be replaced with a new and better company or industry. The market is trying to do just that with taxi services, but the government is standing firmly in the way, upending the way markets work and causing massive disruption.
Even worse, the law forbids ride-hailing app services from passing the newly-imposed tax on to their riders. Essentially, then, the state is demanding a portion of profits from private companies without even giving said company any ability to recoup the loss. Could this be a more transparent effort to punish innovation and reward cronies? Could there be a more clear-cut example of how taxation is theft?
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