To what extent do morality and economics intersect? That's a difficult question to answer. Most people assume that they have a moral (not just legal) claim on whatever income they receive; ergo, the taxes on that income qualify as a form of theft. Libertarian economist Hayek argued, though, that prices (which include your income - the price of your labor) don't track with moral desert.

Elizabeth Anderson writes:

Hayek's deepest economic insight was that the basic function of free market prices is informational. Free market prices send signals to producers as to where their products are most in demand (and to consumers as to the opportunity costs of their options). ... It's a short step from this core insight about prices to their failure to track any coherent notion of moral desert. Claims of desert are essentially backward-looking. They aim to reward people for virtuous conduct that they undertook in the past. Free market prices are essentially forward-looking. Current prices send signals to producers as to where the demand is now, not where the demand was when individual producers decided on their production plans.

Consequently, capitalism is constantly pulling the rug out from underneath even the most thoughtful, foresightful, and prudent production plans of individual agents. However virtuous they were, by whatever standard of virtue one can name, individuals cannot count on their virtue being rewarded in the free market. For the function of the market isn't to reward people for past good behavior. It's to direct them toward producing for current demand, regardless of what they did in the past.

Several implications follow from Hayek's insights into the nature of capitalism. (a) The claim "I deserve my pretax income" is not generally true. Nor should the basic organization of property rules be based on considerations of moral desert. Hence, claims about desert have no standing in deciding whether taxation for the purpose of funding social insurance is just. (b) The claim that people rocked by the viccisitudes of the market, or poor people generally, are getting what they deserve is also not generally true. To moralize people's misfortunes in this way is both ignorant and mean. Capitalism continuously and randomly pulls the rug out from under even the most prudent and diligent people. It is in principle impossible for even the most prudent to forsee all the market turns that could undo them.

This is an interesting argument, though you should follow the above link to read the whole thing. If there is no connection between the price of your labor and moral desert, then it would be difficult to argue that you morally deserve your pre-tax income. One can argue that you have legal claims on it, of course, but moral claims are another matter. What makes this interesting is that those who are most vociferous in arguing that taxation is theft are libertarians — the same ones who should be arguing against such a moral connection.

Read More:

• Guide to Ethics and Morality
• News About Ethics