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Milton Friedman on taxes

What Friedman said about who actually bears a tax, which taxes are least bad, and why business cannot pay them.

22 passages in the archive14 checked against the source8 not yet checked
  1. Child care? Program trading? Earthquakes? Pass a law. And every law comes with a price tag and is cited as a reason for higher taxes.
    We Have Socialism, Q.E.D.
    Column, 1989, The New York Times, December 31, 1989, Section 4, p. 11
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  2. One of the greatest advances in human freedom was the commutation of taxes in kind to taxes in money. We have reverted to a barbarous custom. It is past time that we regain our heritage.
    A Volunteer Army
    Column, 1966, Newsweek (December 19, 1966); reprinted in the Congressional Record, Senate, January 22, 1969, p. 1438, under the heading “From Newsweek magazine, Dec. 19, 1966”. Later collected in An Economist’s Protest (1972)., Congressional Record, January 22, 1969, p. 1438
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  3. Enforced service by a conscript is a tax imposed on him no less than the check you send to Internal Revenue is a tax imposed on you. The size of his tax is the difference between the sum of money for which he would have served voluntarily and the pay he actually receives. Currently, this tax amounts to about 50 per cent of the potential civilian income of draftees. So unfair a tax imposed on so small a minority would never be passed explicitly by Congress. It persists only because it is hidden.
    The End of the Draft?
    Column, 1970, Newsweek (1970); reprinted in full in the Congressional Record, Extensions of Remarks, March 20, 1970, p. 8443, introduced by Representative William A. Steiger as one of “two recent articles on the volunteer army which were published in Newsweek.” The bracketed header “[From Newsweek, Mar. 23, 1970]” stands above the Stewart Alsop column printed first; this column carries no date of its own in the reprint, Congressional Record, March 20, 1970, p. 8443
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  4. Whatever the extra amount, we are now paying a larger sum in concealed form. Conscription is a tax in kind—forced labor exacted from the men who serve involuntarily. The amount of the tax is the difference between the sum for which they would voluntarily serve and the sum we now pay them—if Joe Namath were drafted, his tax might well run into hundreds of thousands of dollars.
    A Volunteer Army
    Column, 1966, Newsweek (December 19, 1966); reprinted in the Congressional Record, Senate, January 22, 1969, p. 1438, under the heading “From Newsweek magazine, Dec. 19, 1966”. Later collected in An Economist’s Protest (1972)., Congressional Record, January 22, 1969, p. 1438
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  5. The tax is not only unfair, it is also inefficient. Every tax involves costs in addition to the amount of the tax itself. For conscription, these indirect costs are the heavy burdens imposed on actual and potential draftees, their families, universities, employers—and most important, on all of us through the weakening of the political fabric of society.
    The End of the Draft?
    Column, 1970, Newsweek (1970); reprinted in full in the Congressional Record, Extensions of Remarks, March 20, 1970, p. 8443, introduced by Representative William A. Steiger as one of “two recent articles on the volunteer army which were published in Newsweek.” The bracketed header “[From Newsweek, Mar. 23, 1970]” stands above the Stewart Alsop column printed first; this column carries no date of its own in the reprint, Congressional Record, March 20, 1970, p. 8443
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  6. I believe along with Parkinson that government will spend whatever the tax system will raise plus a good deal more. Every step we take to strengthen the tax system, whether by getting people to accept payroll taxes they otherwise would not accept, or by cooperating in enacting higher income taxes and excise taxes or whatnot, fosters a higher level of government spending. That's why I am in favor of cutting taxes under any circumstances, for whatever excuse, for whatever reason.
    The Limitations of Tax Limitation
    Journal article, 1978, Policy Review (The Heritage Foundation); reprinted in the Congressional Record, Extensions of Remarks, June 7, 1979, pp. 14069 to 14071, introduced by Representative Hamilton Fish, Jr. of New York as “an article by Dr. Friedman published in Policy Review, the quarterly journal of The Heritage Foundation”, Congressional Record, June 7, 1979, p. 14070
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  7. What is called a deficit is a form of taxation. It is a very bad form of taxation, but it is a form of taxation.
    Why Government Is the Problem
    Journal article, 1993, Hoover Institution Press, Essays in Public Policy no. 39, p. 16
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  8. The true cost of government to the public is not measured by explicit taxes but by government spending. … Essentially every current piece of wealth in the United States has a hidden tax imposed on it because of the future obligation to pay those extra taxes. In effect, what you have are two kinds of taxes: the open, explicit taxes and the hidden taxes. And what's called a deficit is a hidden tax.
    The Limitations of Tax Limitation
    Journal article, 1978, Policy Review (The Heritage Foundation); reprinted in the Congressional Record, Extensions of Remarks, June 7, 1979, pp. 14069 to 14071, introduced by Representative Hamilton Fish, Jr. of New York as “an article by Dr. Friedman published in Policy Review, the quarterly journal of The Heritage Foundation”, Congressional Record, June 7, 1979, p. 14070
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  9. The elementary fact is that ‘business’ does not and cannot pay taxes. Only people can pay taxes. Corporate officials may sign the check, but the money that they forward to Internal Revenue comes from the corporation’s employees, customers, or stockholders.
    An Economist's Protest: Columns in Political Economy
    Book, 1966, p. 86
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  10. The issues that will arise will be a continuation of those that have bothered us these past decades. The main ones seem to me to be as follows: 1. The appropriate relation between the level of taxes and the level of expenditures on the average of good and bad years. 2. Criteria for determining the fraction of national income that is appropriately spent through the Federal Government.
    Statement to the Subcommittee on Fiscal Policy
    Testimony, 1965, Fiscal Policy Issues of the Coming Decade: Statements by Individual Economists and Representatives of Interested Organizations, Subcommittee on Fiscal Policy, Joint Economic Committee, 89th Congress, 1st Session (1965), p. 55
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  11. In a free society, a government has no business using the power of the law or the taxpayer's money to propagandize for some views and to prevent the transmission of others.
    An Economist's Protest: Columns in Political Economy
    Book, 1966, p. 153
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  12. Why do we have inflation? Because we, the citizens, have demanded it. We have sent a message to Washington. We said, we want you to spend more on roads. We want you to spend more on health. We want you to spend more on education. But don't tax us for it. … And so the difference is paid for by the hidden tax of inflation, which is the only tax that can be imposed on the American people without anybody having to vote for it.
    The Open Mind
    Interview, 1977, The Open Mind, hosted by Richard Heffner, Episode “A Nobel Laureate on the American Economy” (May 3, 1977)
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  13. An income tax intended to reduce inequality and promote the diffusion of wealth has in practice fostered reinvestment of corporate earnings, thereby favoring the growth of large corporations, inhibiting the operation of the capital market, and discouraging the establishment of new enterprises.
    Capitalism and Freedom
    Book, 1962, Ch. 13 Conclusion, 2002 edition, p. 198
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  14. Inflation is the one form of taxation that can be imposed without legislation.
    Monetary Correction: A Proposal for Escalator Clauses to Reduce the Costs of Ending Inflation
    Journal article, 1974
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  15. Jarvis-Gann has many defects. It is loosely drawn. It cuts only the property tax, which is by no means the worst tax. It does nothing to halt the unlegislated rise in taxes produced by inflation. Proposition 1 was a far better measure, and a revised version will be needed even if Jarvis-Gann is passed. Yet I strongly support Jarvis-Gann. It does cut taxes. It does raise obstacles to further increases in government spending. And it will not have the dire consequences its opponents threaten.
    A Progress Report
    Column, 1978, Newsweek (April 10, 1978); reprinted in the Congressional Record, Extensions of Remarks, April 4, 1978, pp. 8709 to 8710, introduced by Representative John H. Rousselot of California, who describes it as “his byline article which appeared in the April 10, 1978 issue of Newsweek”, Congressional Record, April 4, 1978, pp. 8709 to 8710
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  16. Keep your eye on one thing and one thing only: how much government is spending, because that is the true tax. Every budget is balanced. There is no such thing as an unbalanced federal budget. You're paying for it. If you're not paying for it in the form of explicit taxes, you're paying for it indirectly in the form of inflation or in the form of borrowing. The thing that you keep your eye on is what government spends. And the real problem is to hold down government spending as a fraction of our income. And if you do that, you can stop worrying about the deficit.
    Speech at San Diego Chamber of Commerce
    Speech, 1978
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  17. The major disadvantage of the proposed negative income tax is its political implications. It establishes a system under which taxes are imposed on some to pay subsidies to others. And presumably, these others have a vote.
    Capitalism and Freedom
    Book, 1962, Ch. 12 The Alleviation of Poverty, 2002 edition, p. 194
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  18. One down, 49 to go. That is the present state of the grassroots movement that Ronald Reagan started in California five years ago when he sponsored Proposition 1—a constitutional amendment to limit spending by the state government to a specified, and slowly declining, fraction of the personal income of the residents of California.
    A Progress Report
    Column, 1978, Newsweek (April 10, 1978); reprinted in the Congressional Record, Extensions of Remarks, April 4, 1978, pp. 8709 to 8710, introduced by Representative John H. Rousselot of California, who describes it as “his byline article which appeared in the April 10, 1978 issue of Newsweek”, Congressional Record, April 4, 1978, pp. 8709 to 8710
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  19. If a tax cut increases government revenues, you haven't cut taxes enough.
    Milton Friedman's Last Lunch
    Column, 2006, Forbes
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  20. Governments can most effectively collect taxes on things that can't move. That's why property taxes are invariably the first tax.
    Commanding Heights: Milton Friedman interview
    Interview, 2000, PBS, “Where We Stand Today,” interview conducted October 1, 2000
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  21. However, there is no reason for proponents of tax limitation to despair. Five years is a short time to effect a basic change in our governmental structure. The defeats are less impressive than the growing strength of taxpayer resentment at zooming governmental budgets.
    A Progress Report
    Column, 1978, Newsweek (April 10, 1978); reprinted in the Congressional Record, Extensions of Remarks, April 4, 1978, pp. 8709 to 8710, introduced by Representative John H. Rousselot of California, who describes it as “his byline article which appeared in the April 10, 1978 issue of Newsweek”, Congressional Record, April 4, 1978, pp. 8709 to 8710
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  22. That is a widespread myth, that it is possible to spend money with nobody paying for it. You have everybody screaming that we ought to have new, bigger, more generous government programs. Where are we going to raise the money? Tax business. But business corporations can’t pay any taxes. A corporate executive may sign the check, but where does he get the money? From his stockholders or from his customers or from his employees. Unlike the federal government, he doesn’t have a printing press in his basement. So the only way he can pay money to the government is imposing a burden on somebody. Government cannot spend money at nobody’s expense.
    Economic Myths and Public Opinion
    Column, 1976, The Alternative: An American Spectator, vol. 9
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