Freedom and the Boundaries of Fiscal Power: A Hierarchy of Fiscal Coercion and the Design of Domestic Taxation

Taxation is not merely a technical instrument for raising public revenue; it is also a system through which the state compulsorily acquires private resources. This paper does not ask what distribution of wealth should exist among members of society, but when the state may acquire a fiscal claim against an individual and where that power must stop. It therefore distinguishes action freedom from static freedom: the former concerns freedom of choice when undertaking new voluntary actions, while the latter is the freedom to maintain one’s existing person, ordinary private property, and way of life without incurring new compulsory obligations merely by undertaking no new action. Using the trigger of the fiscal claim and the cost of exit as its criteria, the paper constructs a hierarchy running from taxation of newly created value, to general behavior taxes, taxation of ordinary private property, poll taxes, and corvée, and identifies static freedom as a structural boundary that ordinary fiscal power may not cross. “Value-added taxation” is used as a normative category: enterprises are taxed on newly created productive value, while individuals are taxed only on income above the basic living costs of themselves and their dependents; general behavior taxes form a second tier available only if this base is insufficient to finance necessary public expenditure. Static holding of ordinary private property, mere existence, and the body and time remain outside the ordinary fiscal tax base. Land is analyzed separately because it cannot be privately created and therefore raises a distinct question of original title, while tariffs and charges directly attributable to identifiable common costs likewise fall outside the general tax hierarchy examined here. The exemption of basic living costs is therefore understood not as a benefit for low-income taxpayers but as part of the boundary of fiscal power. Because people with fewer resources generally have less capacity to migrate, avoid, or shift institutional burdens, stable limits on fiscal coercion are themselves a form of institutional protection for ordinary people. The paper accordingly proposes a domestic fiscal structure in which static freedom is the hard boundary and newly created value is the primary tax base.