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News Link • TAXES: Federal

At What Population Size Does Taxation Become Legitimate?


Consider the following scenarios and provide your answers below:

A group of 10 people were stranded on a very large island due to a shipwreck. The ten people set about helping each other produce things that were necessary for each others survival. Of the ten, John happened to be exceedingly industrious and managed to create more goods than the others on the island. John loved to trade the goods he created with the other people on the island, but John almost never gave any of this goods away for free. He always expected to be paid for his goods in either labor or in trade.

The others on the island began to resent the wealth that John had created for himself and decided that John should be forced to give them some of his wealth without them having to give John anything in return. They did not like the fact that John had such a comfortable life while the rest of them were barely scrapping by. In order to equalize the wealth in their community, the nine other people took a vote among themselves to institute a new government. The new government (which consists of the nine other people) instituted a tax that only effected John, which allowed them to take and redistribute property from John which they felt was excessive and then redistribute that wealth among themselves.

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