Taxes: Government Financing In A Free Society

[DavidOdden]

Absolutely!  A criminal is a threat to ALL the citizens and prosecution of crimes is not an optional matter.

A correction here: in the US, we prosecute the accused, we do not prosecute criminals. The purpose of prosecution is to determine if the accused is a criminal and deserving of punishment. To prosecute a crime, you must have an accused -- prosecuting a crime without an accused is meaningless. It is entirely a matter of choice to to prosecute a particular accused person, and the choice should be made on the basis of whether the state prosecutor makes the judgment that the accused did provably commit the crime. If that is not the case, then the state must choose not to prosecute the individual. There is no difference between criminal and civil cases whatsoever in terms of optionality -- the difference lies in whether the person bringing the case to the court is pursuing their own interests, the interests of a small group of people, or an entire society. State prosecutors should act on the basis of the interests of those whom they represent -- not their personal interest.

Police protection is an entirely different question.

[neverborn]

[Mod's note: Merged with earlier thread on a similar topic. - sN]

How to have ZeroTaxes:

I understand the immorality of coercive taxation. My question is how can we completely eliminate taxation whether income tax or national sales tax? The government has some obligations, such as to provide for national defense.

Edited August 10, 2006 by softwareNerd

[TomL]

Even simpler than that.

You are coming at this question from the context of our current society, in which we have an enormous octopus of a government, with its tentacles in everything, and a budget into the multiple trillions of dollars. However, were we to achieve cultural change and actually get a rational government, that context will be quite different.

Imagine a different goverment, one that does only one thing: protecting its citizens from the initiation of physical force. Imagine its size, and its budget. The scope of the government, and thus is budget, will be miniscule compared to today.

Also, further imagine what the economic landscape will be like. Companies will be far more prosperous than they are now, due to the utter lack of regulation and irrational restrictions on their productivity. The common man's standard of living will be much higher as well.

Since companies will -want- to be protected from the initiation of force, and since the government will not be regulating them or telling them how to conduct business, they will gladly and willfully give sufficient funds to the government for its operation, in exchange for the protection they receive. This can be done in any number of ways. For examples: donation, or a fee for each contract entered into with another business/person.

As a result of these donations and fees, everyone else will get to come along for the ride. There is no reason that the police force would need to keep a "customer database" so they know what calls to respond to, everyone gets it -- and those paying won't mind a bit.

The future size of this government-to-be makes funding it almost a complete non-issue, especially considering the wealth that will be generated when it happens.

[ex_banana-eater]

I don't see why the companies won't also want to 'come along for the ride'.

As to the customer database to know which calls to respond to, I don't think it'll be needed for long.  It being cheaper to protect a whole area instead of a few square miles here and there, there will be a large amount of economic pressure for whole areas to purchase police and military protection together.

Objectivist political philosophy is not anarcho-capitalist, it is capitalist. That means the purpose of the state is to uphold individual rights to everyone, not just paying customers. All peaceful men have a right to life, and the government will be there to protect that right. Poor people with little money would still have their rights protected by the government in a capitalist society, without having to pay.

[Tom Robinson]

Objectivist political philosophy is not anarcho-capitalist, it is capitalist. That means the purpose of the state is to uphold individual rights to everyone, not just paying customers. All peaceful men have a right to life, and the government will be there to protect that right. Poor people with little money would still have their rights protected by the government in a capitalist society, without having to pay.

If the rights of all, not just paying customers, are to be upheld, what becomes of Ayn Rand's proposed contract insurance outlined in "Government Financing in a Free Society"? Rand said that the consequence of not buying such insurance from the government would be that "such agreements or contracts would not be legally enforceable; if broken the injured party would not be able to seek redress in a court of law." If, as you say, rights are to be "protected by the government in a capitalist society, without having to pay," then this must mean, contra Rand, "free" contract insurance.

[ex_banana-eater]

If the rights of all, not just paying customers, are to be upheld, what becomes of Ayn Rand's proposed contract insurance outlined in "Government Financing in a Free Society"?  Rand said that the consequence of not buying such insurance from the government would be that "such agreements or contracts would not be legally enforceable; if broken the injured party would not be able to seek redress in a court of law."  If, as you say, rights are to be "protected by the government in a capitalist society, without having to pay," then this must mean, contra Rand, "free" contract insurance.

I suggest you read that section over again to more clearly understand exactly what Ayn Rand views should be protected by contract fees.

And yes, I am saying that the government's job will be to maintain the individual rights of all people within its jurisdiction regardless of whether they pay--that is it's job. All men have individual rights, including people living in slums. Imagine if the poor people had no policing in the ghettos, they would turn into crime jungles.

Poor people do not own property. They would rent and, therefore, would be covered.

So if a "renter" gets held up in the street at knifepoint, he is entitled to justice against the criminal through the police, but not someone who dosn't have a landlord paying the police?

[Tom Robinson]

I suggest you read that section over again to more clearly understand exactly what Ayn Rand views should be protected by contract fees.

I did, and it still says precisely what it said the first time I read it: the government would protect "only those contracts which had been insured by the payment, to the government, of a premium in the amount of a legally fixed percentage of the sums involved in the contractual transaction" (emphasis added).

And yes, I am saying that the government's job will be to maintain the individual rights of all people within its jurisdiction regardless of whether they pay--that is it's job. All men have individual rights, including people living in slums. Imagine if the poor people had no policing in the ghettos, they would turn into crime jungles.

So if a "renter" gets held up in the street at knifepoint, he is entitled to justice against the criminal through the police, but not someone who dosn't have a landlord paying the police?

Suppose that someone living in the slums takes out a loan to buy a car, but the loan is not insured by the government. The terms of the loan call for lender to turn over title of car to borrower following completion of payments. Suppose, further, that the lender reneges on the contract and refuses to release the title, even though the borrower faithfully made regular payments and in all other respects adhered to the terms of the contract. I hold that the borrower has a right to the car title named in the contract. Just as you contend that the victim of a holdup is "entitled to justice against the criminal through the police," I contend that the victim of contract violation is entitled to justice against the criminal through the court system.

[ex_banana-eater]

Tom Robinson:

When talking about rights, I was specifically referring to the government protecting individuals from criminals, regardless of paying them. Necessary_Truths had claimed that police would only serve and protect those individuals who had given the government money. I disagreed on the grounds that the state's purpose is to protect the rights of all individuals regardless of whether they donated to the government.

When someone initiates force against another, it is the government's job qua government to deliver justice. It doesn’t matter that the victim didn't donate money to the government (those effected by burglary in poor areas most commonly wouldn't have the money to anyway). However, that doesn’t mean I think that contracts (not in the way Necessary_Truths defined them, but in the way Ayn Rand defined them) between two consenting individuals should be protected for free. When a contract is broken, the offended party may or may not sue, as a choice.

And yes, I do have some ideas contra Rand regarding government financing in a free society. Ayn Rand's words aren't scripture. I think that someone should have the ability to access the court system even if they didn't pay government contract insurance--but at a high fee--in order to allow them to settle their dispute, and so the state can earn additional money. When I said to take a closer look, I only meant to refer you to where Ayn Rand said something along the lines of “this is only a suggestion” during that essay.

I contend that the victim of contract violation is entitled to justice against the criminal through the court system.

I don't understand, are you saying that the offended party in a contract violation is entitled to justice for free via the courts? I thought in your last post you were saying the exact opposite.

[Tom Robinson]

Tom Robinson:

When talking about rights, I was specifically referring to the government protecting individuals from criminals, regardless of paying them. Necessary_Truths had claimed that police would only serve and protect those individuals who had given the government money. I disagreed on the grounds that the state's purpose is to protect the rights of all individuals regardless of whether they donated to the government.

That’s fine, Ex Banana. If “the state's purpose is to protect the rights of all individuals regardless of whether they donated to the government,” then the victims of theft through contract violation would also be entitled to have their rights upheld -- even if they did not contribute to the government in the form of contract insurance. However, as I have previously observed, this runs contrary to Rand’s proposal to make contract enforcement available only to those who pay contract insurance premiums.

When someone initiates force against another, it is the government's job qua government to deliver justice. It doesn’t matter that the victim didn't donate money to the government (those effected by burglary in poor areas most commonly wouldn't have the money to anyway). However, that doesn’t mean I think that contracts (not in the way Necessary_Truths defined them, but in the way Ayn Rand defined them) between two consenting individuals should be protected for free. When a contract is broken, the offended party may or may not sue, as a choice.

You could also say that if a woman is raped she may or may not press charges, as a matter of choice. You have not shown why it permissible for certain victims of rights violation to obtain justice from the state without a fee, while other victims must pay specifically for that service. In “The Nature of Government,” Ayn Rand makes it clear that it is “the proper purpose of a government to make social existence possible to men, by protecting the benefits and combatting the evils which men can cause to one another.” And certainly breach of contract is one such evil. Indeed, breach of contract can in some cases be more devastating to an individual than overt physical force. Compare being slugged with losing one’s life savings. Both are serious rights violations. As Rand states, “Observe the basic principle governing justice in all these cases: it is the principle that no man may obtain any values from others without the owners’ consent -- and as a corollary, that a man’s rights may not be left at the mercy of the unilateral decision, the arbitrary choice, the irrationality, the whim of another man.”

And yes, I do have some ideas contra Rand regarding government financing in a free society. Ayn Rand's words aren't scripture. I think that someone should have the ability to access the court system even if they didn't pay government contract insurance--but at a high fee--in order to allow them to settle their dispute, and so the state can earn additional money.

By the same token, we could say that the parents of a kidnap victim should have the ability to access the services of the police department even if they did not previously contribute to the government’s revenues -- but at a high fee -- in order to allow them to recover their child, and so the state can earn additional money.

When I said to take a closer look, I only meant to refer you to where Ayn Rand said something along the lines of “this is only a suggestion” during that essay.

And I was only suggesting that denying the victims of breach of contract access to the monopoly court system would be virtually the same as denying a violent crime victim access to monopoly police services.

I don't understand, are you saying that the offended party in a contract violation is entitled to justice for free via the courts? I thought in your last post you were saying the exact opposite.

No, I merely wished to point to the inconsistency of charging to uphold some rights but not charging to uphold others.

Edited February 23, 2005 by Tom Robinson

[The Wrath]

There's an essay in VoS that supports police protection for the people who don't pay for it. The author suggests that it would be sort of the same thing as letting a homeless person ride on an empty passenger train, or something like that...I'll see if I can find the exact quote.

[The Wrath]

"It may be observed, in the example given above, that the cost of such voluntary government financing would automatically proportionate to the scale of an individual's economic activity; those on the lowest economic levels (who seldom, if ever, engage in credit transactions) would be virtually exempt--though they would still enjoy the benefits of legal protection, such as that offered by the armed forces, by the police and by the courts dealing with criminal offenses. These benefits may be regarded as a bonus to the men of lesser economic ability--without any sacrifice of the latter to the former."

-Ayn Rand, Government Financing in a Free Society

Still looking for that homeless man on a train quote...gimme a minute.

Edited February 23, 2005 by Moose

[The Wrath]

"It is important to note that this type of free protection for the noncontributors represents and indirect benefit and is merely a marginal consequence of the contributors' own interests and expenses. This type of bonus cannot be stretched to cover direct benefits, or to claim--as the welfare statists are claiming--that direct handouts to the nonproducers are in the producers' own interests.

The difference, briefly, is as follows: if a railroad were running a train and allowed the poor to ride without payment in the seats left empty, it would not be the same thing (nor the same principle) as providing the poor with first-class carriages and special trains."

-Ayn Rand, Government Financing in a Free Society

Okay, so the quote wasn't exactly what I said it was, but it's the same general idea.

[ex_banana-eater]

That’s fine, Ex Banana. .

Tom Robinson:

A criminal (apart from contract breaking) is a danger to all of society, and it is the government's job to prosecute him. Individuals only report the crime, but the state prosecutes it. There is no option whether or not a rape victim (after letting the crime be known to police) can decide the rapist goes free.

When someone breaks a contract, the government dosn't sue the breaker on behalf of the offended party. One decides whether one has been cheated by the breach of contract, and then takes it to the courts on his own. The breach of a voluntary contract does not necessarily require compensation.

[ex_banana-eater]

  Will they want to pay for other people who can't (or are unwilling) to pay for themselves?  Maybe, maybe not; I know that I sure wouldn't, that would be altruistic.

It would be altruistic to donate to have a just society rather than anarchy in your country?

  If they aren't willing to pay, how would the police and military function while trying to protect those others?  They shouldn't work for free (again, altruism) and they can't simply force the paying customers to pay more to cover the added costs, that would be a violation of the paying customers' property rights; which, of course, would defeat the whole purpose.

Of course the government wouldn't force people to pay anything. Still, I don't see how any of this supports your idea that the government shouldn't maintain order for everyone in it's jurisdiction.

[Tom Robinson]

Tom Robinson:

A criminal (apart from contract breaking) is a danger to all of society, and it is the government's job to prosecute him. Individuals only report the crime, but the state prosecutes it. There is no option whether or not a rape victim (after letting the crime be known to police) can decide the rapist goes free.

When someone breaks a contract, the government dosn't sue the breaker on behalf of the offended party. One decides whether one has been cheated by the breach of contract, and then takes it to the courts on his own. The breach of a voluntary contract does not necessarily require compensation.

Why isn't someone running a charity fraud not a danger to society? What about billing insurers for services never rendered by changing bills or submitting fake ones? What about "roll programs" or letter of credit frauds or any number of other scams? All of these involve a breach of contract in the form of taking a victim's money and purposefully failing to fulfill the terms of the contract. All of these scams have the potential to be financially devastating to a victim. Nigerian "419" letter frauds have wiped out entire life savings. Personally, I’d rather have my wallet stolen at gunpoint than to see my bank account disappear without threat of violence. But if I understand you correctly, I could get “free” police protection if $5 is lifted from my back pocket, but I’m on my own if someone tricks me out of my $5,000 IRA. I see no reason to draw an artificial division between the two forms of crime, in that both involve taking property against the owner’s consent.

[ex_banana-eater]

Why isn't someone running a charity fraud not a danger to society?

I still consider fraud a crime, and should be dealt with the same way a violent crime is dealt--prosecution by government. However, the difference between a civil contract (like a marriage) and frauding someone of their money, is that the former is a dispute that does not require the government to prosecute. Similarly, liability (ie medical) cases do not use the government to prosecute, and should require the plaintiff to pay a court fee (or defendant if found guilty).

[Tom Robinson]

I still consider fraud a crime, and should be dealt with the same way a violent crime is dealt--prosecution by government.

Great. So I make a contract with a company to repaint my house. I pay them $2,000 in advance, but they stop work after two days and announce that they don't have time to finish the job. Since I have been defrauded of the larger part of $2,000, the crime "should be dealt with the same way a violent crime is dealt --prosecution by government." (Even though I have not bought contract insurance from the government.)

  However, the difference between a civil contract (like a marriage) and frauding someone of their money, is that the former is a dispute that does not require the government to prosecute. Similarly, liability (ie medical) cases do not use the government to prosecute, and should require the plaintiff to pay a court fee (or defendant if found guilty).

Let's say my marriage contract calls for my wife and I to pool our separate resources and, if divorce should ever occur, divide them evenly. Now the day of the divorce comes and my wife refuses to share her winnings from the $6 million lotto. How is this breach of contract fundamentally different from the paint company's cited in the previous example? In both cases a person's rightful property is taken from him without his consent.

The essential question is, why should some victims of theft get "free" government protection but not others?

[ex_banana-eater]

My reply:

The case of the divorce should be brought to court by the individual parties, and payed for by the individuals rather than government. However, once it has been legally decided that the woman owes a certain amount of money after the precedings are over, she can be found in contempt of court and be prosecuted for fraud.

I think the first issue you presented is outright fraud--but these questions are still inciting alot of questions on my views, since I don't know too much about jurisprudence. I think the first example is akin to you handing someone your money and them walking away with it like a scam artist. The criminal should be prosecuted by the government for punishment--but for restitution, which is a separate issue, there could be a civil case.

[The Wrath]

Okay, I went to great lengths to find those quotes and I demand that someone say something about them.

[mweiss]

Frankly, it isn't a pressing issue.  What's needed is to persuade a large number of people that taxation is immoral.  With the moral issue settled, all kinds of possibilities will appear.

To answer your question, I don't think just one method will be put into place: lotteries, bonds, fines from ciminal convictions, donations / sponsorships, fees for legal services (lawsuits, arbitration, etc.), and so on would all have their place.  Could you imagine a for-profit government?

Therein lies the critical challenge: How DO we persuade the vast majority of the public, who believe that there IS no better way to run government?

I have engaged in this argument with friends and associates on countless occasions and have a laundry list of objections to a tax-free economy.

The typical arguments I hear against it are:

Few or no persons would voluntarily contribute donations to fund government.

If a war broke out and the government needed a huge increase in revenue, where would they get it?

The roads would not be maintained and soon you would not be able to travel to the grocery store.

Anyone could come and rob you and there would be no police.

Etc., etc.

The persons that make those statements apparently have a low opinion of the moral character of people in general. That they might be inspired to a higher standard of conduct in a tax-free world doesn't occur to them.

I am engaged in a battle over skyrocketing property taxes here in Connecticut. I have been prolific with my newspaper editorials for the past five years, on this issue. I have presented an argument, followed by systematic logical steps and definitions, to show that the property tax may not be Constitutional.

If anyone wants to read the article, it can be found here:

http://www.newmilfordspectrum.com/story.php?id=61106

I am now about to undertake the formidable task of presenting an alternative method to finance the town's operations. I am seeking ideas wth Objectivist foundations. So I'll be watching this thread with interest.

[iouswuoibev]

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.

[mweiss]

The answer would be to have the government charge for its services, which people would then have the right to refuse.

People who own private property would be very interested in protecting it, for example, and would almost certainly pay to have the military and police forces protect it and them.  Those who do not wish to paid for such services would not recieve them, and would have to protect their property themselves (although without violating anyone's rights).

I have been faced with the argument that the police, fire, ambulance, etc., departments would be burdened with having to look up a database of who paid and who didn't pay, under emergency response conditions, and that this would be another layer of beaurocracy that would delay their response time.

Another objection I have heard is that in the case of a crime commited on a public street, the police would have no way of knowing if the victim had paid for protection services.

I'll admit there are numerous logistical challenges involved here.

There is also the more widespread problem of 'freeloaders'. Granted, in a RATIONAL society, the majority would see the logical value of paying their insurance/protection fees, etc., but we have a very different society than this in the real world.

That also goes into the corporate realm. I frequently hear the argument that government regulation of business is needed because otherwise we'd be back to the 'sweat shop' era of the early 20th century, as well as be witness to many more Enron-style scams. What I am grappling with here is the question "How can we have a true Laissez-faire Capicalist society when the makeup of the population is accustomed to cheating and defrauding as a way of life?"

The population has to change, before the government can be scaled down. The entrenched education system (I heard a quote on the Michael Savage show while driving home this evening where it was said that "puclic schools are institutionalized child abuse" --I thought that hit the nail on the head) is making 'good little Socialist/Fascists out of the current generation of kids, and the government-controlled media are reinforcing the emphasis on narcissism as an ideal, focusing on the unimportant and ignoring the issues that are core to supporting man's existance.

How can we prevail against a system with this much visibility and broadness?

[ex_banana-eater]

1. Police wouldn't use any payment list since they would be provided as a government service regardless of payment.

2. Fire and emergency health services are nearly always provided to all people in an emergency, and then the costs are looked at. I think this is the way things would stay.

-In the case of a fire, it might be important to put out the blaze despite the property being without homeowners insurance (which would often cover fire protection) because the fire could spread to insured homes.

-Even if payment lists were used, they likely wouldn't create much beuracracy since it would be in the emergency service companies' self interest to improve response time. If I were an owner of one of these companies, I would use street addresses or names as an identifier in a computer database, since they are required information to dispatch firetrucks/ambulance anyway.

3. The issue of obtaining enough money to fund a proper government has to be confined to the context of conditions that make a moral government possible. 51% of the population would be voting to establish a tax-free government, which means Objectivism has a very large impact on the society. Rational values and culture would have permeated throughout the country, even to those voting against a tax-free state.

4. Apply what I said in #3 to your question "How can we have a true Laissez-faire Capicalist society when the makeup of the population is accustomed to cheating and defrauding as a way of life?", keeping the same principle I said but applying it to different actions.

5. It's not out yet, but keep watching for Andrew Bernstein's new book The Capitalist Manifesto. It will answer questions like "Does capitalism create sweatshop labour?" Here's the link. I'm sure someone else might step up and provide names for material that is already printed, since there are tonnes of sources.

-I might as well answer your question right now (although I can tell you have a multitude of questions about how different aspects of laissez-faire will work, so that's work for a book):

Capitalism is the cure for low standards of work and living. Notice that in the countries where sweatshop labour is existent, capitalism has been around the shortest. The reason why these people are working in sweatshop labour is because they are coming out of an even poorer and primitive era of dictators and suppression that did not allow capitalism or was agrarian. Likely, their standards of life are improving by working in a factory than slaving away on a field and toughing it out through famines. Essentially, capitalism gets blamed for causing the problems that it inherited and were more widespread under previous types of government. It then steadily improves quality of life over the years when given a chance--like how near laissez-faire transformed a war-torn American society into the most prosperous country in the world.

[Rex Little]

Consider the custom of tipping in restaurants. The vast majority of people--probably well over 90%--do this, unless the service is monumentally bad. They do it even when there is no tangible payoff for tipping, or penalty for failure to tip, such as when they're eating in a place far from home, where they've never been before and never will be again.

Why do we tip, even when there's no external incentive? It has to be because we've simply absorbed the idea that we should, that it's the right thing to do. And since that's the case, it's possible that the legitimate functions of government (police, defense, courts) could be paid for the same way: people donate a certain percentage of their incomes for that purpose, just because they know they should.

Obviously, this belief would have to be widespread--nearly universal, the way tipping is--to reliably pay for government. I don't know what a society would have to do to bring this state of affairs about. But the fact that it works for tipping tells me it's possible.

Edited March 27, 2005 by Rex Little

[Toolboxnj]

As Peter Schwartz succinctly noted at the CSPAN2 lecture (on VoS, O'ist ethics) that once you get a government that performs it's essential functions (police, military, courts) that the easy part is funding it.