Taxes are just a form of property seizure. Originally, taxes were not justified by the occurrence of a market transaction, the taxing authority simply took what was available to be taken. Taxing transactions (whether the payment of wages or any other price) is just an effective method of capturing as much property as possible. All other forms of taxation run into serious problems - poll taxes mean you don’t get as much from the rich as you might be able to (or you have to start killing a lot of poor people who can’t pay the high poll tax), random seizures or other direct wealth taxes quickly lead to property concealment, and so on. By taxing transactions, the taxing power can seize property that it knows exists by virtue of the act of exchange occurring in the first place. In addition, sufficiently effective taxation of transactions results in a quarantine of all large capital stocks… nothing can move without being taxed, so while the rich might be able to hide their wealth, they also won’t be able to use it. So, the only way to make use of your concealed wealth is to reveal it and submit to being taxed.
Oh, and millenia of government propaganda has succeeded in getting people to believe that transactions need to be taxed because somehow transactions impose “costs” onto “society” which the government has to amend from tax revenues. And the Tooth Fairy is real.
Clayton -