Lately, Donald Trump (and Elon Musk) have agreed to consider returning at least some of the money that DOGE saves to the American people. Estimates vary on how big of a check could be going to Americans and there is, of course, debate as to which Americans should get the money and, if so, how much money. Some reports indicate that it could be as much as $5,000. Giving this to all 340 million people would cost $1.7 trillion. Restricting it to the 258 million adults in the US would cost $1.29 trillion. If instead we only gave these dividends to the 153.8 million taxpayers, it would cost $769 billion. All of these represent a great wodge of the $2 trillion that DOGE originally promised to save and that Musk is now walking back.
This discussion highlights an important debate in the administration of government and the provision of civilized society. What is the role of and justification for taxation in society?
Two Contrasting Visions: Remittance versus Expropriation
From John Locke, we get the idea that a government is constituted by the people and that it derives its power from the consent of the governed. In this scheme, any and all income that is justly earned is owned fully and completely by the people who earnx.ced it. To the extent that taxation is legitimate, it must be done by the consent of the people being taxed. Any takings of justly earned income beyond this would be tantamount to expropriation and could be referred to as legalized plunder. Under this approach, the legitimate forms of taxation would be, as Oliver Wendell Holmes once wrote, “the price we pay for civilized society.” Here, citizens have an incentive to produce in order to provide not just for themselves, but also to provide the base from which (legitimate) taxes may be voluntarily remitted.
Less sanguinely, from Mancur Olson, we get the idea of government as a “stationary bandit.” Olson points out that “under anarchy, uncoordinated competitive theft by ‘roving bandits’ destroys the incentive to invest and produce, leaving little for either the population or the bandits.” Rather than rove around attempting to prey upon the people, some bandits decide to settle in an area and “[monopolize] and [rationalize] theft in the form of taxes.” The late, great Walter Williams summarized this view best, saying, “the difference between government and thievery is mostly a matter of legality.”
For Olson, the stationary bandit was preferred to the roving bandit if only because it would decrease the amount of plunder. The stationary bandit would endeavor to provide “national defense” in order to keep its victims safe from the plunder of other, (roving) bandits. Doing so would preserve the incentive for people to invest in and produce the resources from which the stationary bandit then expropriates.
Applications to Today
DOGE and President Trump have alleged that there is widespread “waste, fraud, and abuse” in federal spending. That tax dollars are going to support activities that are “ridiculous — and, in many cases, malicious — pet projects of entrenched bureaucrats.”
Insofar as there is truth to the claim that there is government waste, even if the specific examples cited turn out to be false, this spending would be viewed as illegitimate by Olson, certainly, but also by Locke. As such, the tax dollars spent on these would be expropriated from the citizens, not remitted by the citizens. It would seem clear that these dollars should be returned to the citizens, in much the same way that stolen property that is recovered is returned to its original owner or that an aggrieved party may seek recompense from the perpetrator.
Complicating this, however, is the simple fact that the federal government presently finds itself over $36 trillion in debt and with a planned deficit for this year of $1.9 trillion. National debt of this magnitude cannot be repaid overnight as it constitutes 133% of total US national income. Insofar as we plan to pay this off, it will have to come at least in large part by future generations of American people, many of which either have not reached voting age or have not even been born yet. It would seem manifestly unjust to foist the bill for the “sins of the past” on these people without their consent.
Trolley Problems and Public Finance
So now we are left with a quandary. Do we return the expropriated tax dollars to the people from which they have been unjustly collected? Or do we use any savings that DOGE collects to pay down the national debt and reduce unjustly confiscating future tax dollars from people who had no voice in the creation of the debt in the first place?
Thinking in these terms, it is clear that we find ourselves within a version of Philippa Foot’s now-famous Trolley Problem. As it stands right now, the trolley is barreling toward future generations of taxpayers. If no action is taken, it is them who will suffer. On the other track is the current generation of taxpayers. Should the switch be flipped, it would be them who suffer. Making this even more complicated is the fact that it is the current generation of taxpayers who must decide whether to flip the switch. Given that inheritances exist, we can plainly see that parents are able to flip the switch when it is their children on the tracks. But does this extend from one generation (writ large) to another generation?
The unfortunate reality is that someone must pay for the profligacy of decades of spendthrift politicians in Washington, DC. But the question of who must pay is an important one, and one that we need to be wrestling with.