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Taxes: Government Financing In A Free Society

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Cons: What happens with things that affect the entire country? ...

It seems to me at first that anyone who would like any service whatsoever from the government would have to pay a base operating fee. Because after all, the government would be an entity with it's own interests to protect i.e. it's "profit base" so to speak in the people that it serves. This all being constitutionally maintained of course.

In a huge country such as our own the discrete amount to be paid for basic operation, as equally distributed among participators, would be minuscule at most so the thought of non-participators or moochers in a fee based government is pretty silly. However, is it correct to bar a person from the service of the courts for not paying fees?

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I went to a talk by craig biddle some months back where he presented a very interesting idea for encouraging voluntary funding of the government. It was a bit involved and is being dealt with in one of his books in more detail, but the basic idea was that the government could issue vouchers tht would say how much money was donated to the government by a person or more importantly by a business. So a business could hang it on their wall so people could see that they were contributing. If you went to a restaraunt and saw that they were not paying anything you could take your business elsewhere and avoid giving economic benefit to the free riders.

Another thing to consider is how much money is voluntarily contributed to charities every year, currently. The numbers are staggering even with the government stealing everything not nailed down. In an economically free country there would be even more discretionary income and people would be even more likely to patriotically support their government if they did not feel as though it were attempting to devour them.

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the government could issue vouchers that would say how much money was donated to the government by a person or more importantly by a business

I agree that using vouchers would allow people to choose where to take their business based on donations, and this would probably lead to businesses paying enough to fun the government. I can see that in times of government prosperity, funding would not seem as important so business patrons would be more inclined to go for lower prices as opposed to higher donations. Then in times of war or the government just not getting enough funding in general, people would be more inclined to protect themselves by patronizing businesses donating more. In this manner the cost of government would remain relatively fixed, but would be flexible in cases of emergency.

I'm still a little uncomfortable with the idea of having to rely on government like a charity, as in, I pay for protection but I also have to rely on others paying enough. However, the idea of using government funding as a marketing scheme is pretty good. The only problem I can see occurring is businesses creating forgeries of vouchers, unless they are very complicated pieces of paper or some kind of holographic display where the customer can verify that it is real.

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Is there a practical means of funding the government in a Minarchy without the use of taxation? If not, what would be the most moral type of taxation in such a government?

P.S. Sorry if this post is too vague I am very new to the forums and am not yet sure of all the customs. I apologize in advance.

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First of all, that avatar is really disturbing, and not at all appropriate for this forum.

With a minarchy, funding the gov't is not that big of problem for a wealthy nation as the cost of operating the gov't would be a tiny percentage of the GNP. The costs can be covered by voluntary funding, collected fines for crimes, and fees for issuing suit against another.

Edited to add a comma for clarity.

Edited by IAmMetaphysical

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*** Mod's note: Merged with an earlier topic - sN ***

 

 

How does a government that limits itself to the duties Rand described fund itself? If funding ever fell short for the necessary upkeep of civil and foreign defense, would the Objectivist position advocate operating on a smaller budget (to the point of insufficiency?) or would the Objectivist position be to tax the citizenry to make up for the shortfall? Also, do you have a rough idea of the amount of money necessary to run an effective police defense, court system and military?

**I couldn't find a thread on this as my search yield too many to browse through. If anyone remembers where to find one and help me out with a link, I'd appreciate it. Thanks**

Edited by softwareNerd
Merged topics

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Rand address this in "Government Financing in a Free Society". The essence is this statement: "In a fully free society, taxation—or, to be exact, payment for governmental services—would be voluntary."

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Rand address this in "Government Financing in a Free Society". The essence is this statement: "In a fully free society, taxation—or, to be exact, payment for governmental services—would be voluntary."

I think the question being asked is that if such voluntary payments fell short of the required amount, what would be the Objectivist position on the proper government response to that? (Eg, whether or not to make up for the windfall and if so how or if not would they then reduce spending to a level that is insufficient?)

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This probably isn't a complete answer, but a comparison would be - what happens if a small business owner doesn't do business well enough to make the money he needed? The answer is, nothing. He doesn't get "paid". He has to go day to day until he decides to do better business and make some money. If he continues to not do so, then he has to keep making cuts. If he starves to death then obviously nobody was in need of his services in the first place. Your question assumes the premise that anyone needs government in the first place. I'm sure many people wouldn't agree with that premise.

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I think the question being asked is that if such voluntary payments fell short of the required amount, what would be the Objectivist position on the proper government response to that?
Can we assume that everybody here has read "Government Financing in a Free Society"? From that, it should be obvious that there is no specific answer. I think the question is founded on a false presumption, and I have no idea how the described state of affairs could come to pass.

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Can we assume that everybody here has read "Government Financing in a Free Society"? From that, it should be obvious that there is no specific answer. I think the question is founded on a false presumption, and I have no idea how the described state of affairs could come to pass.

If it is the one I am thinking of, then I have. (I am thinking of the article in The Virtue of Selfishness. As for the question, I agree with your opinion of it. I certainly have no answer and I think it is because, as you say, there is none. Personally, I don't think they'd have much problem getting the necessary funding. Even in today's age of poor philosophy most people see the need for a police force, the armed forces, and courts. There would be even more of such people in a the sort of country that voted in a party that implemented laissez faire, meaning there would be no shortage of people willing to give voluntary payments, thus no shortage of funding for a government is a laissez faire system.

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Personally, I don't think they'd have much problem getting the necessary funding. Even in today's age of poor philosophy most people see the need for a police force, the armed forces, and courts.
That's exactly right. The false presumption is that we have a society so rational that government was limited to its proper function and not to general social engineering, and yet so irrational that people on a massive scale did not see the benefit of paying their proverbial insurance premiums. The fundamental fact, which must always be kept clearly in sight, is that government funding must be voluntary.

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How does a government that limits itself to the duties Rand described fund itself? If funding ever fell short for the necessary upkeep of civil and foreign defense ...

The point is that an Objectivist government cannot exist without a population sharing the same (Objectivist) principles, especially the principle that the government should hold the monopoly of force.

If you agree that government should hold the monopoly of force then you are against the idea of anarchy and vigilante justice, i.e. you won't spend your money on a private "justice force" (or whatever you want to call it) to protect you and your property. Thus the only way to have a protection of your rights is through the government. And if the funding ever "fell short" there would be an incentive to donate more to the government (instead of buying more arms for yourself).

In addition a donation to an Objectivist government is a donation to all rational people living under this government. Such a donation is the best of all forms of donations you can do because all other causes are of minor importance if there is no such government and there is no better way to reward rationality than by an objective justice system.

If people start disagreeing that the government should hold the monopoly of force and turn to private entities (e.g. the mafia) then funding will fall short eventually: An objectivist government cannot exist if the people disagree on objectivist principles.

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That's exactly right. The false presumption is that we have a society so rational that government was limited to its proper function and not to general social engineering, and yet so irrational that people on a massive scale did not see the benefit of paying their proverbial insurance premiums.

Yeah, it is indeed a false assumption. If people in a mostly irrational society can see the necessity of the police, armed forces, and courts, then a rational society will have even less of an issue with that.

The fundamental fact, which must always be kept clearly in sight, is that government funding must be voluntary.

Indeed, it must be kept in clear sight. Nothing can change that since rights violations cannot be juatified, especially when the violators are those that are charged with protecting our rights.

The point is that an Objectivist government cannot exist without a population sharing the same (Objectivist) principles, especially the principle that the government should hold the monopoly of force.

If you agree that government should hold the monopoly of force then you are against the idea of anarchy and vigilante justice, i.e. you won't spend your money on a private "justice force" (or whatever you want to call it) to protect you and your property. Thus the only way to have a protection of your rights is through the government. And if the funding ever "fell short" there would be an incentive to donate more to the government (instead of buying more arms for yourself).

That is similar to what I am saying about how a society rational enough to vote in such a government wouldn't have an issue with lack of funding for the government. I doubt there ever would be a shortage of funding, but even if there was it would be short lived.

Edited by DragonMaci

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It sounds as if to have a government that limits itself to the principles prescribed under Objectivism, the country will have to be predominantly populated by Objectivists. Is that correct?

Assuming it is, there would in turn be no shortage as it is rational to donate to the government that protects you. Is that correct?

Would it be correct to say that not contributing your fair share- essentially making you a moocher- would disqualify you from being an Objectivist? Granting a population increase both naturally and through a positive flow of immigrants, taking it as a given that some will not be Objectivists, is it the responsibility of an Objectivist to pick up the difference that must be accounted for? In other words, is it rational to pay more than your fair share to ensure that sufficient funds reach the government?

Thanks for your thoughts everyone.

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I doubt there ever would be a shortage of funding, but even if there was it would be short lived.

Let's assume that a brief interlude of time arrises, however long, where a government exists that cannot defend your rights due to insufficient funds.

It seems reasonable that this situation is well within the realm of possibility for a number of reasons. Doesn't this open up the Objectivist position to very dire attacks from others?

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Let's assume that a brief interlude of time arrises, however long, where a government exists that cannot defend your rights due to insufficient funds.

It seems reasonable that this situation is well within the realm of possibility for a number of reasons. Doesn't this open up the Objectivist position to very dire attacks from others?

Such would not happen. At worse they would be strectched, possibly stretched thin (though I doubt it'd go that far) for a short while. It would never be unable to defend its citizens rights. There would be too many willing payers for that to happen. In fact I'd highly doubt that they'd be stretched at all due to the high number of willing payers.

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It sounds as if to have a government that limits itself to the principles prescribed under Objectivism, the country will have to be predominantly populated by Objectivists. Is that correct?

Yes, although I think non-objectivists would pay, too, simply because people tend to copy what the majority does (social pressure etc.). I also think that there would be numerous "donation drives", like "buy this car and 100$ will be donated for a good cause", saving you the trouble of making a donation yourself.

Assuming it is, there would in turn be no shortage as it is rational to donate to the government that protects you. Is that correct?

If you agree that government holds the monopoly of force then a shortage would be a strong incentive to donate more because there is no other way to protect you and your property.

Would it be correct to say that not contributing your fair share- essentially making you a moocher- would disqualify you from being an Objectivist?

Well, how would you protect your property and your life without the government? Either you disagree with the monopoly of force of the government (and stockpile ammo) or you donate the money. The only alternative is that you rely on others to protect you, which would make you basically a 'moocher'.

But I guess this point could need some more discussion, I'd rather see it as a bad investment in the long-term.

Granting a population increase both naturally and through a positive flow of immigrants, taking it as a given that some will not be Objectivists, is it the responsibility of an Objectivist to pick up the difference that must be accounted for? In other words, is it rational to pay more than your fair share to ensure that sufficient funds reach the government?

In a society with Non-Objectivists the best donation is in education. Instead of donating more you should spend additional money to convince other people. Of course the system of government itself has an educational value by representing reality, but a direct exchange of ideas and discussion would probably be more effective.

Edited by Clawg

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Yes, although I think non-objectivists would pay, too, simply because people tend to copy what the majority does (social pressure etc.). I also think that there would be numerous "donation drives", like "buy this car and 100$ will be donated for a good cause", saving you the trouble of making a donation yourself.

Not to mention what I said about the fact that even in today's philosophical quandry most people think the police, armed forces, and courts are necessary. As such I think many non-Ojectivists would donate. Afterall they would want there to be a police force and armed forces to protect them, not to mention courts to settle their civil and legal disputes.

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It sounds as if to have a government that limits itself to the principles prescribed under Objectivism, the country will have to be predominantly populated by Objectivists. Is that correct?
No, that is not necessary for a number of reasons. First, what is required is a collection of lawmakers who adhere to Objectivist-like principles. That includes not only senators and presidents, but also judges. The majority of voters who elect these folks would need to accept certain fundamentals in order for suitable lawmakers to be elected, but the would not necessarily have to be, by majority "vote", actual Objectivist, including in metaphysics and epistemology. The primary concepts that would have to be accepted by the masses would be that the proper function of government is to protect the rights of the individual by prohibiting initiation of force, that by nature man survives by reason, and that specifically every man should act in a manner than supports his life, taking the long-range view.
Would it be correct to say that not contributing your fair share- essentially making you a moocher- would disqualify you from being an Objectivist?
The concept of a "fair share" is anathema to Objectivism. We needn't investigate the disqualification and membership question at all. The proper question is, what should a rational man do in a free society to guarantee his survival as a man?

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I know there's not much interest in the specific how of government funding, but it seems to me that contingent contributions might have some potential.

The idea is that contributions are pledged for a specific purpose with a specific price tag, on the condition that the contribution is made only if enough is pledged to cover the cost.

This would give donations a multiplying effect of sorts, by spurring others to reach the goal in order to gain benefit from the already (and to-be) pledged contributions of others.

If the goal is not reached, the contingent contributions are null, and no benefit is gained by anyone.

The other side to this is that the government would then be forced to justify any expenses in order to garner the needed cost of the project or agency. If they fail, it's back to the back room.

The details of contributions might be left to the elected officials, who could bring to Washington the pot of money contributed by their constituents, and contribute it on their behalf to the programs that benefit the state or district of that representative. In that way, the federal government would compete with localities for funding and contributions would run uphill from local to national, rather than the other way around, which currently serves to strengthen the state and weaken the individual.

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I am not sure how likely it is but I wonder if maybe a more likely scenario than the one raised in this thread is the government having a surplus and thus refunding the surplus (unlike governments today that either hoard surpluses or use them to increase government growth).

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I know there's not much interest in the specific how of government funding,

On the contrary. I'm very much a nuts and bolts kind of person. I want to know or figure out how to make it work or else all the rest is just mental masturbation.

One possibility I've thought of is a lottery. North Americans generate Billions of dollars every year for charities through state and local lotteries. I see no reason why something similar could not be used to fund the government.

Also with the dismantling of the current state much, between 60 and 80% of the current government (not an actual percentage and more just pulled out of thin air than anything else) would need to be sold to privatize the bloated bureaucratic system. Now much of that money would out of necessity be going to pay down debt but some (50%?) should be invested wisely so that "government" became cash self sufficient through wise investment and prudent spending.

Also all land that is now 'government owned' should be sold as and when requested by the citizenry at fair market prices to further fund the government.

I also see no reason why the few government services such as passport control and treasury operations should not be able to fund their own operations and charge a fair market profit for their services.

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On the contrary. I'm very much a nuts and bolts kind of person. I want to know or figure out how to make it work or else all the rest is just mental masturbation.

I have thought about it myself and have come up with various ideas.

One possibility I've thought of is a lottery. North Americans generate Billions of dollars every year for charities through state and local lotteries. I see no reason why something similar could not be used to fund the government.

I don't like the idea myself because it is government entering business, which is something they should not do. Maybe if a private lottery donated to the government. That would be fine. But I am against the idea of the government owning a lottery.

Also with the dismantling of the current state much, between 60 and 80% of the current government (not an actual percentage and more just pulled out of thin air than anything else) would need to be sold to privatize the bloated bureaucratic system. Now much of that money would out of necessity be going to pay down debt but some (50%?) should be invested wisely so that "government" became cash self sufficient through wise investment and prudent spending.

Again, this is government entering business, something they shouldn't be in.

I also see no reason why the few government services such as passport control and treasury operations should not be able to fund their own operations and charge a fair market profit for their services.

We agree on that at least. Court fees aree on of my ideas. I was thinking that if found guilty the person being charged would pay the fees and if found innocent the person charging them would pay the fees. Also, they party that paid the fees would pay the other the amount they spent on lawyer fees. That way victims don't lose money because they are victims and innocents don't lose money because they are falsely accused.

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