Babbitry and Taxes: A Profile in Courage?

Babbitry and Taxes: A Profile in Courage? is a short single-author polemical essay in political economy. Its scope is narrow—the 1988 presidential-season celebration of Bruce Babbitt for supporting tax increases to reduce the deficit—but Rothbard uses that occasion to restate a larger libertarian argument about fiscal morality: the political class can call tax increases “courageous” only because public discourse hides the relation between taxpayers and tax receivers.

Of what does the great courage of Bruce Babbitt, as trumpeted by the media, consist? The answer is his intrepid valor in coming out, frankly and squarely, for higher taxes to slash the federal deficit.

The essay first attacks the media’s moral vocabulary. Rothbard’s target is not merely Babbitt but the Establishment habit of treating a politician’s willingness to demand higher taxes as a mark of seriousness. Against this, he redefines courage as resistance to power rather than candor in service of it.

It used to be thought that heroism and “courage” meant being willing to go out into the lists, candidly and unafraid, to battle the mighty and despotic powers-that-be.

This inversion drives the essay’s satire. For Rothbard, Babbitt and Mondale are not confronting a powerful adversary; they are urging the state to intensify its extraction from productive citizens.

Can we really call it “courage” when a Mondale or a Babbitt frankly calls upon the eager state apparatus to increase still further its already outrageous and parasitic plunder of the hard-earned money of honest and productive American citizens?

The middle section supplies the essay’s main conceptual move: politicians and bureaucrats are not taxpayers in the same sense as private citizens. If a state employee receives a tax-funded salary and then remits part of it back, Rothbard argues, this is not genuine tax payment but a reduction in net transfer.

We must realize that he does not in reality pay $20,000 in taxes; instead, he is simply a net tax-receiver of $60,000.

That claim turns the language of “shared sacrifice” into what Rothbard sees as camouflage. Filing a tax return does not place officials and citizens on the same moral plane, because the official’s income originates in coercive revenue rather than market production.

The notion that he pays taxes is simply an accounting fiction, designed to bamboozle the citizenry into believing that he and the rest of us are on the same moral and financial footing before the law.

He extends the same logic to other levies: sales, property, and income taxes paid by officials are all deductions from their tax-funded receipts. This supports the essay’s broader class distinction between net taxpayers and net tax-consumers.

Bureaucrats and politicians do not pay them; they are simply subtracted from the net transfer to themselves from the body of taxpayers.

The conclusion rejects the fiscal alternatives Rothbard sees dominating American politics: tax hikes on one side, complacency about deficits on the other. His answer is to reduce the state directly, not to finance it more heavily.

It seems to be forgotten that there is another tried and true, and perhaps far more “courageous,” way of slashing the deficits: cutting government spending.

The final provocation is deliberately anti-technocratic. Rothbard refuses the usual demand to specify one tiny program to cut, because he thinks that framing protects the legitimacy of the whole spending apparatus.

The proper answer is: anywhere and everywhere; only wholesale flailing away with a meat axe could possibly do justice to the task.

The essay’s relevance lies in its critique of fiscal rhetoric: politicians are praised for imposing burdens on others while the state sector’s dependence on taxation is obscured. Rothbard’s core moves are to redefine courage as opposition to state power, distinguish net taxpayers from net tax-receivers, and expose “common sacrifice” as a political fiction.