Taxes: Government Financing In A Free Society

[Hal]

Being a leech is immoral, because the standard of morality is man's life, not the affect an action has on your checking account balance.

Why does this make it immoral? I'm choosing not to pay in the hope that others will pay. Whether or not I pay, the fate of 'man' still depends on the other people, not on my individual actions - my contribution is neglible and makes no real difference.

Similarly, I'm choosing to pursue an academic or financial career in the hope that other people will choose to be garbagemen and farmers. If they all refuse to take on manual labour careers too, then I'm probably going to starve to death. Does this mean my career choice involves 'leeching'?

Edited November 16, 2005 by Hal

[softwareNerd]

... my contribution is neglible and makes no real difference.

Millions of people go to vote even though their single vote does not matter. Around Christmas people in the tens of thousands put a little money into Salvation Army buckets. A thousand-odd people write checks for a few hundred dollars to ARI. Why do these people do these things knowing that their individual action will not make a difference?

[Hal]

Millions of people go to vote even though their single vote does not matter. Around Christmas people in the tens of thousands put a little money into Salvation Army buckets. A thousand-odd people write checks for a few hundred dollars to ARI. Why do these people do these things knowing that their individual action will not make a difference?

Its a good question. I dont understand the voting thing and have never done it personally, so I cant comment on that. I would say that the main reasons for charity include: guilt, the pleasure which some people get from helping others, and the belief that their contribution does matter (and its far easier to believe your contribution matters when donating to a relatively small organisation like ARI, than it is when youre one of the people providing billions of dollars to the government). And while there will definitely be some people who derive satisfaction from knowing that they are supporting the military and debt repayments, I have doubts that this will be widespread. More fundamentally, I can find no argument why it would be rational to derive more satisfaction from donating to the government than it would be to spend the money in other ways.

Remember; for every person that gives a significant sum to charity, there are many more that dont. What percentage of people who agree with Objectivism donate hundreds of dollars to ARI? And this is among Objectivists, who you would expect to be far more likely to donate to their chosen cause than other people, assuming that your above arguments are correct.

Edited November 16, 2005 by Hal

[softwareNerd]

... I can find no argument why it would be rational to derive more satisfaction from donating to the government than it would be to spend the money in other ways.

Because such a donation is made within a longer-range context. It is moral because it is practical. It is not practical if you consider the decision in the context of "what is practical if I am going to die in a few years" and don't care what happens next.

As for voting, let me ask you this. If you really liked someone who was running for (say) President, and if you thought there was a fair chance that person might be elected, would you be slightly more motivated to go vote?

On the debt, I'm not sure why you mention that. Why would a Capitalist country take on a huge amount of debt? If you're referring to a process of transition, then that changes the context.

[Hal]

Because such a donation is made within a longer-range context. It is moral because it is practical. It is not practical if you consider the decision in the context of "what is practical if I am going to die in a few years" and don't care what happens next.

But its not practical precisely because it makes no difference. If my personal donation actually increased my country's security a significant amount then it might be practical, but that would not be the case for the majority of people.

As for voting, let me ask you this. If you really liked someone who was running for (say) President, and if you thought there was a fair chance that person might be elected, would you be slightly more motivated to go vote?

I've never been in that situation

Assuming that it was a fairly tight election, I probably would go out and vote. But if I expected it to be a landslide either way, I might not bother.

On the debt, I'm not sure why you mention that. Why would a Capitalist country take on a huge amount of debt? If you're referring to a process of transition, then that changes the context.

I'm talking about the transition. The US national debt exists, and a laissez-faire society would still have to choose whether to take it on or default.

[softwareNerd]

If one is speaking of a transition, there is no reason why one would also not transition everything else... from Social security to taxes. Indeed, I think that is the just way to go.

[AisA]

Why does this make it immoral?

Being a leech means existing at someone else's expense. A rational individual accepts responsibility for his own existence, including the responsibility to defend his rights. The fact that you happen to live in an extremely successful, highly productive society, in which millions can split the cost of defense, thereby reducing your burden to a relatively small amount, does not negate your responsibility to pay that amount.

I'm choosing not to pay in the hope that others will pay. Whether or not I pay, the fate of 'man' still depends on the other people, not on my individual actions - my contribution is neglible and makes no real difference.

You do not have a right to be a parasite to any extent. An action does not become moral merely because you can get away with it.

Similarly, I'm choosing to pursue an academic or financial career in the hope that other people will choose to be garbagemen and farmers. If they all refuse to take on manual labour careers too, then I'm probably going to starve to death. Does this mean my career choice involves 'leeching'?

No, your career choice anticipates trade with other individuals in a division of labor society. If you expect to exchange value for value with others, that is moral. If you expect to get something for nothing, that is immoral.

[RationalBiker]

But its not practical precisely because it makes no difference.

How are you sure that it would make NO difference? Even if you were a low income person, and your contribution was only $100 or $1000 a year, that's buying SOMETHING that is needed in the total effort. (rivets, screwdrivers, bullets, etc.) I think this is a akin to broadening your idea ot the things needed to accomplish a goal. The janitor at the police department still helps put bad guys in jail, even though his contribution is minor compared to the guys doing the work on the street. We still need a clean facility to work in.

However, I don't think that's really the issue. The immorality of not contributing is linked to the idea that you as the free rider are having other men provide for your life without you compensating them, or even attempting to compensate them.

[DavidV]

We should not confuse voting and donations. In the vast majority of elections, we can be certain that our vote makes no difference at all, because one of the candidates has a significant margin. Even when the election is closely contested, our vote is as statistically significant as a lottery ticket. In fact, even less so, since winning the lottery guarantees a certain prize, whereas a political candidate is more likely than not to fail to achieve a particular agenda, and will act on policies we do not agree to.

With charity on the other hand, every single cent makes a difference, even if the consequence is not significant to us.

It’s interesting to contrast both of these to a market transaction, where each monetary vote is guaranteed to provide a personal and predictable value.

One source of evidence for the viability of a state supported by donations is the charity of the people on this forum. I think most of us would agree that the success of ARI’s mission is an important value, or at least, closely tied to our values. Yet how many of us give to ARI, and how much? Does it approximate the 10% universal tithe expected by a church? Certainly, the impact of giving to ARI far exceeds that of giving to a church, yet what do you think the total % of income given to ARI is? (Does not giving make some of us “leeches” in the intellectual renaissance?)

[DavidOdden]

An action is only immoral if its not in a person's self-interest.

Again, you're adhering to the simple morgue-avoidance view of morality, which is just plain wrong and confused. A person's self-interest is what promotes their life, which means living a flourishing life and not just failing to die for another day. Acting on principle is central to morality. The Trader Principle is the fundamental principle of morality when it comes to interaction between individuals. To quote from OPAR ch. 8 (emphasis added),

Every act of justice is in a sense an act of trade. This is inherent in the fact that justice is a form of rationality, a response to something in reality and not a caprice. Rewards and punishments are not undeserved gifts or penalties; they are payments. They are what one gives to a man in exchange for what one gets. In any value-seeking relationship, accordingly, whether the value sought be material or spiritual, the exponent of justice is the man who gives in return for what he receives and who expects to receive in return for what he gives. He is the man who neither seeks something for nothing nor grants something for nothing. The trader principle states that, if a man seeks something from another, he must gain title to it, i.e., come to deserve it, by offering the appropriate payment. The two men, accordingly, must be traders, exchanging value for value by mutual consent to mutual benefit. "A trader," writes Ayn Rand, "is a man who earns what he gets and does not give or take the undeserved."

What you are hoping to do is receive something, with no effort on your part -- you want something for nothing, which is immoral.

You're focusing too much on the question "can I get away with this if I'm crafty". Probably you could have (though now that we know that you plan to be a leech sucking the life-blood out of capable people, we will probably take some form of action against you). If you want to continue being a second-hander scum living off the efforts of others, you can do that. I don't think I will ever be able to understand the mentality of people that want to live off of the efforts of others, but it isn't really important that I do, since I shun them as much as humanly possible. It isn't necessary to pass a law saying that you will be forced to do what you morally should do. Certain things, namely initiation of force, are important enough that it should be part of the law. But productive people are productive enough that they can effortlessly carry the added weight of a few deadbeats.

[JMeganSnow]

I am explaining why “voluntary” user fees are not really voluntary. Donations are one alternative, though they come with other problems, which have been discussed already.

They are voluntary, just like eating. Are you saying that I don't voluntarily pay for my food because I have to eat? I'm suing my grocer for extortion, then.

Voluntary in this context means there's no, "you must or otherwise I will seize your assets, put you in jail, break your legs, kill you", it's "you must, if . . .(you want to take this to court, you want to insure this contract, you want to protect this patent)" which is how normal causality works. Claiming that because people need a service that any payments they make for it are coerced is silly.

If you think your government charges too much, MOVE. Since this theoretical Objectivist country would have free immigration, nothing would stop you.

[DavidV]

Do you think that a national sales tax would be "voluntary"? What if it was limited to certain goods? Its proponents use the same arguments as you.

The comparison to the grocer is not valid btw - I don't get thrown in jail or shot if I try to grow my own groceries, or buy from a competing grocer.

Edited November 17, 2005 by GreedyCapitalist

[Aureus]

Just curious.

Donations.

In a free and just society, private citizens must voluntarily fund government; yet, surprisingly enough, government has been stealthily funding itself for decades by means of monetary inflation. Since government owns the keys to the printing press, government can print as much money as it wants. When the economy becomes overheated and price inflation begins to rear its ugly head, government invariably raises taxes, not because government needs more money (it already has the printing press), but because government uses taxation as a tool to remove an excessive supply of currency from the economy in order to stem potential hyperinflation.

See Fed Chairman Beardsley Ruml's 1946 address: Taxes For Revenue Are Obsolete

[MNRfan]

I'm talking about the transition. The US national debt exists, and a laissez-faire society would still have to choose whether to take it on or default.

Societies don't make decisions; only men do. To quote AR "Man is a word with no plural." With regard to the debt, a group of men may force everyone to help pay it, as is happening now. (immoral) They may take it all on themselves voluntarily. (illogical) Or they may default. (only moral and logical option) Of course, if there's a crisis of hyperinflation or the government falls, it may be easier to repay a few trillion worthless dollars. Remember after WWI when the mark traded at something like 1,000,000,000,000 to the dollar?

[softwareNerd]

Defaulting on the debt is neither moral nor practical.

[Yes]

One argument I keep hearing about a taxless government is that "people aren't charitable". Only, giving money to the government isn't mere charity, since you reap immediate benefits for doing so. It is in your rational self-interest not to allow anarchy to occur, and only a rational society filled with predominantly rational people would give rise to a lassiez-faire government in the first place. So there's really no question as to whether they would pay the government or not.

But, how is it different to pay the government for their protection of your rights, than paying a businessman for rendering a service or selling you goods?

[Rex Little]

But, how is it different to pay the government for their protection of your rights, than paying a businessman for rendering a service or selling you goods?

You have the option not to pay the businessman, in which case he has the option not to deliver the goods or service. Some government functions might lend themselves to this model, but others--most notably national defense--clearly don't.

[Yes]

You have the option not to pay the businessman, in which case he has the option not to deliver the goods or service. Some government functions might lend themselves to this model, but others--most notably national defense--clearly don't.

If one exercises the choice not to pay the businessman, it is because an agreement was not consummated to trade goods or services.

With government, an agreement was consummated by the citizenry to have the government protect the rights of each individual citizen.

Therefore, payment is expected by the government for such protection of our rights.

Therein lies the difference, I think, between dealing with a businessman and how one funds government.

My argument- once you authorize the government to protect your rights, you are expected to pay for such government duty.

No free lunch.

On the debt, I'm not sure why you mention that. Why would a Capitalist country take on a huge amount of debt? If you're referring to a process of transition, then that changes the context.

One way government tries to fund itself is through the sale of bonds.

Now government, at maturity, has to pay back such bonds, does it not? And, with interest. So the government has to get some cash flow to do this from somewhere.

The process of government existing for the sake of protecting our rights, and being paid voluntarily for something we contract the government to do, still puzzles me to this day.

[mweiss]

My argument- once you authorize the government to protect your rights, you are expected to pay for such government duty.

*I* didn't authorize the government to protect me. So how do you explain that? In fact, I didn't authorize ANY government services. They just were in existence, or came into existence quietly without my knowledge or consent.

Unless, of course, you are talking of "collective You" in which case, all bets are off and we aren't talking Objective ideas anymore.

[Yes]

*I* didn't authorize the government to protect me. So how do you explain that? In fact, I didn't authorize ANY government services. They just were in existence, or came into existence quietly without my knowledge or consent.

Unless, of course, you are talking of "collective You" in which case, all bets are off and we aren't talking Objective ideas anymore.

Are you sure?

What do individuals delegate to government?

In order to place the retaliatory use of force under objective legal control -- that is, under clearly defined laws that are logically deduced from the principle of rights -- those who make up society delegate their right to retaliate against those who initiate force, to government.

SOURCE

That supports my argument.

[tnunamak]

One thing I haven't considered until now is, to what extent is the government using force to tax its citizens, when the citizens have the option to leave the country?

[DavidOdden]

One thing I haven't considered until now is, to what extent is the government using force to tax its citizens, when the citizens have the option to leave the country?

Totally.

[gags]

One thing I haven't considered until now is, to what extent is the government using force to tax its citizens, when the citizens have the option to leave the country?

Is someone who steals your car using force against you? After all, you have the option of abandoning your car.

[tnunamak]

I see it now... just took a little thinking about. The government doesn't own your property so they cannot use force to remove you from it.

[Pyrakra]

From what I’ve read of this thread, there are two distinct viewpoints on how to pay for government without forced taxes.

1. Donations are used to fund the government.

Pros: With this system in place, there’s no worry about only protecting those that have paid for it even if that endangers others around. For example, if someone doesn’t pay the military, they are still protected along with the rest of the country if another country tries to invade.

Cons: In addition to the concerns listed above in the forum, I would like to point out another one. With a government founded on donations, a smaller and smaller proportion of the productive would pay for more and more of the moochers. Funding the government through donation means that there is no concept of an appropriate sum to pay the government for the protection of individual rights, anyone can pay any amount and seemingly get the same benefits. This system would cause those individuals with the greatest love of life and production to pay most of the burden in order to protect their rights, while the moochers know that these people will pay anything to protect their rights and therefore won’t pay for themselves. As you’ve said before, the producers will let the moochers ride along for free. But for how long? How long until there is only one person of ability left and the government is in ruins? Asking people to donate and then cover everyone equally is like having one supermarket and telling someone that in order to buy enough food to sustain themselves, they must also pay for the entire town to be able to eat first. Under this system, the individual has no say in who the money they donate to the government is spent on. What if an individual ONLY wants to pay their own rights? Under this system, they can’t.

2. The government is funded by individuals paying for the services they want.

Pros: People pay for what they want so there is no concern over the government falling due to most people not paying and a few people being shackled with the cost.

Cons: What happens with things that affect the entire country? For example, when a foreign army attacks the U.S., the army can’t exactly defend those who have paid this particular fee and not defend the others. The army has to defend the borders of the nation, not individual houses in the suburbs. If an annual fee was attached to land based on acreage, then everyone owning land would have to pay the cost of defending it. I know that this would then be a mandatory land tax and no one wants that… but how else would this work? Would individuals just pay if they were near borders, and those in the center of the country wouldn’t pay knowing that the enemy probably wouldn’t get that far? I suppose people that didn’t pay would just have to defend themselves, but then how would the army proceed regarding those properties that weren’t paid for? Just watch the enemy burn down a house and attack its occupants? That would endanger those that did pay but fighting for a property uninsured for foreign attacks would be asking the army to work for free, unless enough people had already paid, which shouldn’t be assumed.

I agree with the idea of people paying for the government services they want to get, but I’m still unsure quite how that would work in cases akin to military, as shown in my above questions.