Can Political Freedom Survive the Welfare State?

James Taranto, in his daily "Best of the Web" column in the on-line Wall Street Journal, has been exploring the ramifications of the IRS targeting of Tea Party groups.  The implications aren't pretty.

Can Political Freedom Survive the Welfare State? 
A point this column has emphasized repeatedly is that if the Internal Revenue Service scandal turns out not to have been directed by the White House, the situation is much direr than if it turns out Barack Obama or Valerie Jarrett was giving the orders. In the latter case, we have a corrupt administration; in the former, a corrupt government. Reader Thomas Hodson, responding to a Friday item on the subject, has this penetrating elabortion on the idea:

The possibility you omit is that every IRS employee over GS-12 instantly recognized that the Tea Party is a credible threat to the IRS as an organization. I am quite confident that nobody had to issue any orders, directions, suggestions, hints, or blow any dog whistles for them to know what to do to defend their jobs and promotion possibilities. Indeed, the difficulty for the GS-14s, -15s, and SES-types would be to prevent this kind of activity, assuming that the 14s, etc. were so inclined, which I doubt very much. It was not an accident, either. Even if every single one of the elected federal officials were a Republican, and even if the entire federal bureaucracy were populated by Republicans, you would still get this self-protective behavior from IRS leadership and staff.

In my view, this episode reveals a problem that is much worse than the sort of political direction at which you hint. It means that the only remedy is to remove the institutional incentives for this kind of behavior. The only way I can see to do that is to eliminate the federal power of direct taxation. There is a reason that the Framers deprived the federal government of this power, being concerned as they were, especially Madison, to impede the use of government power for political ends.

This is much more than a mere political scandal. I have not been able to conceive of a clearer illustration that with the power of direct taxation, any government, even the U.S. Government, can become over time as totalitarian as it finds useful. Nevertheless, even the most limited-government-oriented commentators I have heard or read are still treating it as a political scandal.

Abolishing direct taxation sounds good to us. But how does one pay for a vast (or even only half-vast) welfare state without it? Abolishing the welfare state sounds good to us too, but even paring it back has proved tough to sell politically. If the welfare state inexorably erodes freedom, that poses a hell of a political problem for those who cherish the latter.