The 5 Branches of Philosophy
Initiation Of Force
Necessity Of Government
Rule Of Law
Separation of Powers
Checks and Balances
Right To Bear Arms
Trial By Jury
Financing A Government
Taxation is a form of extortion, where a threat is offered, and unless the victim pays up, the threat will be followed through. For some reason, a lot of people seem to think that extortion is fine if the extorter (the tax man) works for the government.
The Moral Argument
Taxation is a form of initiation of force, which is immoral, destructive, and unacceptable whether perpetrated by an individual, mafia, or government. Specifically, taxation negates the concept of property rights by claiming that the government has first right to the income or money of its citizens. When every man's work is the property of the state, and he is allowed to keep only what the state feels appropriate, that is Communism which leads to poverty and death. It is the opposite of the view that man has a right to exist for his own sake, that his life is his moral standard.
Any political system that endorses taxation as moral makes the claim that man is a sacrificial animal, who is to be sacrificed in whatever manner the state deems necessary. It must be remembered that the ends to do not justify the means -- the means are part of the ends and affect those ends. If the role of government is confined properly to the protection of its citizens and nothing else, then the budget will be fairly small and can be financed through moral means.
The Unseen Results
Practically speaking, taxation is not just an instance of taking money from the private sector and transferring it to the public sector. It is not an instance of moving it from one pocket to the other. There are many other undesired side effects.
Not only do the artificial conditions set up by taxation make the private sector less efficient, but in addition, money spent centrally can never be as beneficial as money spent locally. The fundamental alternative between tax-and-spend and self-reliance is a choice about who is to spend an individual's money (the product of his labor.)
Money is not an end in itself. It is the means to an end. The means that it represents is your labor - the amount that other people value what you have produced. The end that it can achieve is your values. To benefit from your labor, you must be able to direct that labor or its equivalent (money) towards accomplishing your values. Because only the individual knows his values and their relative importance, only the individual can know how best to spend the result of his labor.
A government official in some central location, unless endowed with a form of omniscient ESP,
cannot know how best to spend the money that has been appropriated into his charge.
Therein lies the gross inefficiency.
Some people, like Benjamin Franklin, see taxation as an inescapable fact of nature ("In this world nothing is certain but death and taxes.") Others see it as a method of draining their work for uses they neither approve of nor enjoy. When another man's claim, proposal, or need is a blank check on your efforts, that is when resentment builds. Only when people deal with each other as people with equal rights, inalienable under the law, as people whose only interaction is as voluntary traders, when no one is sacrificed to anyone and nothing is extorted to "common" or "individual good" -- only then can people truly see each other as a benefit and an asset rather than another competitor for the same stuff.
Taxation is Not Necessary to Pool our Resources
Sometimes it is claimed that without a government building large public works projects and infrastructure (with tax money), these things would never be build and we would all be the worse for it. Where there is something that people value, there is profit -- the difference between how much something is valued and the cost to provide it. Large scale makes private ventures more difficult, but the rewards greater. The railroads in the United States are an example of a massive project which was accomplished with private volition and funding, despite government attempts to interfere.
Of course, if the public work or infrastructure is not valued by people then there is no profit to be made and private industry will not build it. But that's a good thing.