Rather, the way it works is that the people in the government decide how much of our money they want to spend and then send us the check. The rest they graciously allow us to keep. But the higher claim on our money, and also our property life, obviously goes to the government because they can change the rules and the amounts any time at penalty of incarceration. We don't keep the portion of our income that is not taxed away because there is an agreement among people that this amount is right. We keep as much as we do because the government tells us how much we may keep and because keeping any more would likely bring the full wrath of the gun and the badge od the State.
Frank Chodorov in his book The Income Tax: Root of All Evil gives us the naked truth about the matter:
"The government says to the citizen: "Your earnings are not exclusively your own; we have a claim on them, and our claim precedes yours; we will allow you to keep some of it, because we recognize your need, not your right; but whatever we grant you for yourself is for us to decide."
This is no exaggeration. Take a look at the income-tax report that you are required by law to make out, and you will see that the government arbitrarily sets down the amount of your income you may have for your living, for your business requirements, for the maintenance of your family, for medical expenses, and so on. After granting these exemptions, with a flourish of generosity, the government decides what percentage of the remainder it will appropriate. The rest you may have.
The percentage of the appropriation may be (and has been) raised from year to year, and the exemptions may be (and have been) lowered from year to year.1 The amount of your earnings that you may retain for yourself is determined by the needs of government, and you have nothing to say about it."
You can find a great discussion on taxation from a libertarian perspective in Thomas DiLorenzo's lecture at the 2011 Mises University:
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