The Price of Freedom: Why Income Taxes Are Essential for a Thriving Society

George Cassidy Payne is a writer, philosopher, and advocate based in Rochester, NY.

I recently came across Jose Peo’s radio segment advocating for the abolition of the income tax (How Trump is Eliminating Income Tax|God’s Infinite Plan|Foreign Funding”).

His frustration with government spending and his desire for Americans to keep more of their hard-earned money resonate with many. He suggests that reducing or eliminating income taxes would leave more money in the hands of individuals and businesses, promoting economic growth, investment, and job creation. By removing taxes, people would have more disposable income to save or spend, driving consumer demand and economic expansion.

While Peo’s argument is engaging, it heavily relies on the belief that reducing government size and cutting taxes will spur economic growth and individual freedom. This perspective stems from libertarian principles, where the state’s role is minimized, and personal autonomy is prioritized. But before embracing this idea, we must consider the broader implications of what income taxes actually fund, how they support the freedoms we cherish, and what would happen if they were removed.

Why Do We Have an Income Tax?

The income tax system, ratified through the 16th Amendment in 1913, wasn’t created arbitrarily. It was introduced to ensure the federal government could generate consistent, equitable revenue for essential services. As Franklin D. Roosevelt later put it, “Taxes, after all, are dues that we pay for the privileges of membership in an organized society.”

Unlike tariffs or sales taxes, which disproportionately impact lower-income individuals, the progressive income tax ensures those with the ability to contribute more do so. It’s a cornerstone of a fairer economic system and a functional society.

Taxes allow us to create a commonwealth — a society in which resources are shared, and everyone can access opportunities for prosperity. Roosevelt’s sentiment reminds us that taxes are not an oppressive burden but the price we pay for being part of a system that offers protections and opportunities for all.

What Would Be Lost Without It?

If the U.S. were to abolish income taxes, it would need to replace a significant portion of the federal budget, potentially leading to drastic cuts in public services or alternative taxes, such as sales taxes.

In 2023, the U.S. spent approximately $6 trillion, with the largest expenditures directed toward Social Security, Medicare, and national defense. These programs alone make up nearly 40% of the federal budget.

So, when Peo and others call for eliminating income taxes, we must ask: What’s the trade-off? Income tax revenues fund essential public services that benefit all Americans, including those who might agree with Peo’s perspective. Consider these fundamental areas:

Infrastructure: Roads, highways, and public transportation rely on federal funding. Without income taxes, these systems could fall into disrepair, disrupting commutes and commerce. Without them, we’d face serious mobility and economic challenges.

National Defense: The U.S. spends over $800 billion annually on defense. Eliminating income taxes raises the question: How would we continue protecting the nation? A steady income stream is critical to military readiness, public safety, and diplomacy efforts.

Public Education: Federal support helps ensure children across the country receive quality education. Without income taxes, educational disparities would widen, undermining future generations. Public education relies on taxes for schools, teacher salaries, resources, and programs that bridge the gap between affluent and impoverished districts.

Social Safety Nets: Programs like Social Security, Medicare, and Medicaid provide security for millions of seniors, disabled individuals, and low-income families. Cutting income taxes would jeopardize these safety nets and undermine the social fabric, which is essential for economic stability.

Disaster Relief and Public Health: From pandemics to natural disasters, federal funding enables rapid responses and recovery. Without it, our ability to respond to crises would be severely hindered. Taxes enable swift, effective action in times of need. As Oliver Wendell Holmes Jr. famously said, “I like to pay taxes. With them, I buy civilization.”

People who argue for abolishing the income tax often frame it as a matter of personal liberty. The freedom to retain more of one’s income is an appealing concept. But freedom, in a societal context, is not merely the absence of taxes; it is the presence of opportunity, security, and infrastructure that allow individuals to thrive.

Would we truly be “freer” in a society where roads are crumbling, schools are underfunded, healthcare is inaccessible, and the most vulnerable are left to fend for themselves? Benjamin Franklin’s observation still resonates: “In this world, nothing can be said to be certain, except death and taxes.” Taxes are a fundamental part of the social contract, ensuring we all share in the responsibility of maintaining the systems that support our collective well-being.

In other words, true freedom does not come from the absence of taxes but from the presence of a society in which opportunity, infrastructure, and safety are available to all. The freedom to live a secure life is not guaranteed by keeping all our money but by ensuring that our society is equipped to support us when needed. In the absence of taxes, we risk undermining the very systems that make freedom possible for all.

Alternative Systems: Can It Work?

It’s also worth noting that some modern industrialized nations do not impose a traditional income tax. Here are a few examples:

• United Arab Emirates (UAE): The UAE has a thriving economy, largely due to oil exports. It generates revenue through business taxes, tourism, and VAT. Despite not having an income tax, the UAE relies on other forms of revenue generation.

• Bermuda: Bermuda, a financial hub, does not have an income tax. Instead, it raises revenue through payroll taxes, consumption taxes (like a GST), and corporate taxes.

• The Bahamas: The Bahamas generates revenue through VAT, business-related taxes, and property and import duties.

• Monaco: Monaco’s wealth is driven by tourism and luxury goods. It raises revenue through business taxes and fees, not an income tax.

• Cayman Islands: The Cayman Islands also doesn’t have an income tax but relies on import duties, business taxes, and fees from the financial services sector.

While these countries work without a traditional income tax, their economies rely on specific factors that may not be replicable on a larger, more diverse scale. The UAE’s dependence on oil exports and Bermuda’s role as a financial hub are not models every nation can follow.

A Path to Reform

That said, the current tax system is not perfect, and there is always room for reform to make taxation fairer, more transparent, and more efficient. One possible reform is a more progressive tax structure, where the wealthiest individuals and corporations contribute more relative to their income. By increasing tax rates for the highest earners and closing loopholes, we can ensure that those with the greatest ability to pay contribute equitably. This could help reduce income inequality while preserving essential services.

Eliminating the income tax is an extreme response that ignores the essential role taxes play in maintaining a functional, equitable society. Instead of dismantling the system, we should focus on improving it. How can we ensure tax dollars are spent wisely? How can we create better systems to support innovation and growth while caring for those in need?

Frustration with taxation is understandable, and a desire for efficiency and accountability is one we should all share. But abolishing the income tax would do more harm than good. True prosperity and freedom are built on a foundation of shared investment in our communities, infrastructure, and each other. Taxes are the price we pay for civilization, for the systems that connect us, and for services that ensure everyone has an opportunity to succeed. In the end, the income tax is not just a tool for revenue generation; it’s a key part of a society that values fairness, opportunity, and collective responsibility. The conversation should not be about abolishing it, but about how we can make it more effective in achieving the goals of a just and equitable society.

~ George Cassidy Payne is a writer, philosopher, and advocate based in Rochester, NY. His work delves into themes of spirituality, social justice, philosophy, and the human condition. Known for his introspective essays, evocative poetry, and thought-provoking commentary, George contributes to various publications and platforms, offering a distinctive perspective on contemporary issues and timeless questions. Deeply engaged with his community, George writes on topics that resonate locally and globally, including peacebuilding, environmental ethics, and the interplay of faith and reason. His work strikes a balance between intellectual rigor and accessible language, inspiring reflection and connection among a wide audience.