Taxation is a recurring subject on The Bob Zadek Show, treated in the excerpts less as a matter of budget arithmetic than as a question about consent, burden and individual liberty. Bob Zadek returns repeatedly to the claim that the cost of government is buried in the prices of goods and services, and that the corporate income tax in particular is borne by individuals rather than by corporations. Guests in later episodes extend the discussion to state fiscal policy, federal conditions on state tax cuts, and the moral limits of the taxing power.
The corporate income tax and who bears it
In the 2010 “Best of” episode, Bob Zadek argues that the burden of a corporate income tax falls disproportionately on the lowest 20% of wage earners, because they devote the highest percentage of their income to buying goods and services, and the cost of the corporate income tax is buried in the cost of everything they buy. By taxing corporations more, he says, the legislature is really taxing individuals more, but the individuals do not see it on their tax return — only when they buy milk, a car or clothing. He calls this a grossly inefficient and profoundly dishonest way to raise revenue, because the legislature gets to hide and is not yelled at by the people who pay. He makes the same point about utility bills, where the customer is angry at PG&E or the phone company although those companies are merely passing through taxes the legislature has imposed, and about sales taxes, which are borne by us when we buy goods and services but are buried in the cost. The Medicare bill or the health reform bill, he says, has many taxes buried in it and is really a tax bill disguised as a healthcare bill Best of: Changing the Face of History (2010).
The 2021 episode with Wall Street Journal tax policy reporter Richard Rubin opens on the same ground. The episode summary states that the two discuss the complexities and misconceptions surrounding the corporate income tax, explore who actually bears the burden of these taxes — arguing that corporations are merely intermediaries for individuals — and analyze current policy proposals like the global minimum tax and the tax strategies of major companies like Amazon Auditing the Corporate Income Tax (2021). In his introduction, Bob Zadek frames the hour around a single question: to whom and how do you spend the dollar you own, and who will be your well-being vendor. Government, he says, is a provider of well-being that competes to be the vendor of your well-being, and the question is whether it will give you the most well-being for the dollar you give it. He calls government the ultimate, the stealthiest pickpocket there ever was, and says the topic is not complex once you understand where the hidden taxes are Auditing the Corporate Income Tax (2021).
Truth in Taxation
Bob Zadek’s own proposal, advanced in the 2010 episode, is a “Truth in Taxation” act modeled on Truth in Lending. Under federal law, he notes, a lender must tell a borrower in bold type, prominently displayed, the total interest cost of a loan, and all the many fees get accumulated into one number called APR, the annual percentage rate. He says the legislature did a good job there and should do the same thing in taxation. He asks how listeners would feel if there were no sales tax, no utility tax, no luxury tax, no tax imposed on consumers, and instead only one tax, an income tax, so that government could raise money only that way. Then, he says, we would get one bill on our 1040 telling us how much our government has cost us this year, rather than a whole lot of taxes where you do not get to add up the number. He observes that no one out there could tell him their total tax bill at all levels of government for the year. With Truth in Taxation, he argues, Americans would know what percentage of their income the federal government has cost them, and there would be an outrage — pitchforks and muskets out of the barn, storm the Bastille — because no American would feel they are getting equivalent value. He concludes that we have a right to know how much our government has cost us, and that if the legislature gave him a bill telling him how much he is paying, he would decide whether they get to be reelected Best of: Changing the Face of History (2010).
Fiscal policy as a measure of freedom
The 2022 episode with William Ruger treats fiscal policy as a component of an index of freedom. Ruger says fiscal policy is about 30% of the index, and that the index looks at taxation at both the state and local level, government consumption, government employment and debt. He argues that when the state uses its coercive power to levy taxation and debt onto you and your children and grandchildren at a level above what is necessary to protect basic liberties and to do the fundamental purpose of government, it is disrespecting your liberty and your moral dignity, substituting its views about what your hard-earned money should go for. He identifies excessive taxation in places like Hawaii or New York. Ruger describes himself as a classical liberal, or a statist libertarian, not an anarcho-capitalist, and says a limited government that protects our lives and property needs to be supported in some way, but that we are well beyond that at both the federal and state level. He adds that government does not create wealth; individuals do in relationship with other individuals, and that as long as wealth is justly acquired and justly transferred, the basic norm should be that individuals keep and expend their wealth as they see fit, a point he connects to Robert Nozick’s Anarchy, State, and Utopia and its discussion of distributive justice Ranking Freedom in the 50 States (2022).
Bob Zadek, jumping in, puts the freedom point more directly: to the extent that government taxes you, that is a direct denial of freedom, because somebody else is going to spend that dollar and decide how it is spent. It starts off being your dollar, over which you have total dominion; once it is taxed, the government says you have no choice other than indirectly through the ballot box Ranking Freedom in the 50 States (2022).
Consent, protection and the limits of taxation
The 2021 episode with attorney Marc J. Victor applies the “Live and Let Live” principle to taxation. Bob Zadek offers what he calls a very easy justification: governments are formed, if you accept founding principles, to help us be protected against those who would violate those principles, and since we cannot do that individually, we do it collectively through government, which has to have the wherewithal to raise money. On that account, taxation is giving money by consent to achieve a common good we all agree on, which is to protect us. Where it breaks down, he says, is when government wants to tax you for another purpose, such as running the Social Security Administration; then the principle is not to protect us but simply to give your money to somebody else, and taxation for that purpose fails. He says the claim that taxation is theft is wrong and simplistic — it is theft only if we do not consent, and we consent by implication to having government protect us from others Rebranding Liberty with ‘Live and Let Live’ (2021).
Federal conditions on state tax policy
The 2021 episode with Philip Hamburger turns to a federal condition on state taxation. Bob Zadek sets up the point that when the federal government taxes individuals and corporations, it takes money that would otherwise be available to the states, and that it becomes harder for states to raise their own income taxes if, added to the federal income tax, the total becomes too much and people leave New York and California for low-tax states. He asks Hamburger to explain the condition attached to money offered to the states in Build Back Better — money, he says, taken from the citizens of those states and offered back on the condition that the states not lower their taxes. Hamburger calls the condition extraordinary and clearly unconstitutional. He says spending to the states is unconstitutional, that a condition on the states is an attempt to regulate them and should be done through an act of Congress, and that it is commandeering the states by directing how they engage in taxation in exchange for federal money. He notes that the Supreme Court has complicated these matters by saying the federal government cannot commandeer the states coercively, which the federal government has read as a license to commandeer them through conditions on the theory that conditions are consensual. Hamburger argues this rearranges the structural relationship between the federal government and the states, which are independent sovereigns, and deprives people of the right of self-government in the states; he says the New Civil Liberties Alliance is litigating one of these cases and he trusts it will win The New Civil Liberties Movement (2021).
Tax competition among the states
The 2013 episode with Travis Brown frames the states as a marketplace for governance. Bob Zadek says there is a marketplace for tax ideas and for the level of taxation, and that it is just as harsh and cruel to the losers as the economic marketplace or the marketplace for candidates. The marketplace for forms of political governance, he says, is the 50 states, each more or less free to determine by the will of its people and elected officials the nature of its government, how much taxes will take wealth from the people, and what will be given to voters in exchange. He says one can tell whether a concept for state government is successful not by pricing but by taxpayers who vote with their feet, moving from a state whose system of government is unappealing to one that is more appealing, and that reading the movement requires statistics and the ability to synthesize a lot of data. He introduces Brown as the guest who has done that analysis and will share what he has learned about which forms of state government seem to be working and which are unappealing Where is Everyone Going? (2013).
Across episodes
The excerpts show no development so much as a set of variations on one claim. The 2010 episode supplies the hidden-tax argument and the Truth in Taxation proposal; the 2021 episode with Richard Rubin restates the burden question and the well-being-vendor framing; the 2021 episode with Marc J. Victor supplies the consent-based justification and its limit; the 2021 episode with Philip Hamburger applies the same suspicion of federal power to a condition on state tax cuts; the 2022 episode with William Ruger and the 2013 episode with Travis Brown extend the argument to state fiscal policy and tax competition. The earlier treatment is Bob Zadek’s own monologue; the later treatments are carried by guests.
What the sources do not cover
The excerpts do not state the outcome of the New Civil Liberties Alliance litigation over the Build Back Better condition, nor do they report any court holding on it. They do not give the text, sponsor or fate of any Truth in Taxation bill, and no such bill is said to have been introduced. The 2009 episode on drug legalization mentions a bill introduced in February by Tom Ammiano that would legalize marijuana and, along with legalization, tax and regulate it, but the excerpt breaks off before any guest speaks and states nothing further about taxation. The excerpts also do not give the rates, brackets or revenue figures of any tax discussed.