Budget & Tax

Pernicious view of property rights on display in energy tax debate

May 27, 2014

Brandon Dutcher, Trent England

Arguing recently for a tax increase on Oklahoma’s energy industry, one writer for a liberal policy institute performed a valuable service by putting his philosophical cards on the table.

“Much of Oklahoma’s wealth is due to an abundance of oil and gas under the ground,” he wrote. “The companies that drill for these precious minerals make investments and create jobs that help Oklahoma prosper. In return for the rights to a non-renewable resource, however, Oklahoma, like all states with mineral wealth, assesses a severance tax.”

Note carefully the worldview on full display here. It is Oklahoma’s wealth, and in return for the rights to that wealth, Oklahoma assesses a tax. In this view, Oklahomans are not endowed by their Creator with certain property rights (including mineral rights) which the government is duty-bound to secure. Rather, rights have been granted by the government, and “in return” Oklahoma assesses a tax.

Of course, this hostility to property rights is nothing new among Oklahoma leftists. Woody Guthrie’s socialist anthem unapologetically declared that, hey, what’s yours is mine. “Guthrie didn’t like Irving Berlin's ‘God Bless America’ and wrote ‘This Land Is Your Land’ as a rebuttal,” Lee Habeeb reminds us. Indeed, Guthrie “dedicated his life to the overthrow of capitalism and private-property rights.” Consider:

There was a big high wall there that tried to stop me;
Sign was painted, it said private property;
But on the back side it didn't say nothing;
This land was made for you and me.

Interestingly, Guthrie’s hostility to private-property rights extended especially to oil producers (he was inclined to “shoot the first big oil man that killed the fishing creek”). Regrettably, this hostility to property rights appears to be alive and well in some quarters.

But make no mistake: Without property rights, there are really no other rights. At least, rights to speak our mind or to worship as we please can be rendered meaningless if we do not have the right to the property on which we stand to speak or where we kneel to pray. And none of these rights came from government. It is exactly the opposite: government was created to secure these rights.

As it turns out, the lesson of American history and modern economics is that securing these rights also leads to discovery, innovation, and prosperity. Government control at best leads to a tragedy of the commons and at worst leads to cronyism and corruption. (The Soviets couldn’t win the arms race, but they did produce famines and breadlines aplenty.)

For government to effectively secure rights, a certain (low) level of taxation is necessary. But neither government nor the governed should ever forget: the rights of the people came first.