Jump to content
Objectivism Online Forum

Critique of voluntary taxation

Rate this topic


Ninth Doctor
 Share

Recommended Posts

A month ago on the “closed system” thread, faced with the claim that Objectivism is “a system of interconnected principles which are immutable, which cannot tolerate any contradiction, otherwise the whole system is collapsed”, I countered with two points that I thought amounted to reductio ad absurdum. The first concerned Rand’s definition of Art, and perhaps we can have another thread for that. The second concerned voluntary taxation, I wrote:

Just what does “collapse the system” mean, anyway? Reason and Egoism are toast if it turns out that Government can’t be financed by voluntary means?

To my surprise, the only reply I got embraced the absurdum with both arms.

And yes, if government cannot be financed voluntarily, if some initiation of the use of force by the government is required for its existence, then yes, Reason and Egoism are toast and Objectivism fails as a philosophy, as a system of system of interconnected, immutable, non-contradictory principles.

All I could say was “Wow”. Then today I was looking through the “Why eliminate controls gradually” thread and find the tenor of the discussion hovers on the premise that taxation could end if enough people just agreed to eliminate it.

A bit about me, I’m a CPA, and I have a Master’s degree in Taxation. I remember mentioning this to Andrew Bernstein once, and he sort of squinted at me suspiciously, until I said “if I told you I was studying psychology would you assume I was in favor of mental illness?” Study of tax policy and its history plays a fairly minimal role in earning such a degree (one course, in my case), instead you learn about legal research and procedure, and then there are courses on each of the main branches of tax: corporate, estate, partnership and so on. How taxation worked in the Roman Empire or feudal Europe is barely touched on, but after an independent study of history I feel confident about making general statements on the matter.

Following are some passages from Rand’s article, Government Financing in a Free Society, in The Virtue of Selfishness:

In a fully free society, taxation—or, to be exact, payment for governmental services—would be voluntary. Since the proper services of a government—the police, the armed forces, the law courts—are demonstrably needed by individual citizens and affect their interests directly, the citizens would (and should) be willing to pay for such services, as they pay for insurance.

The question of how to implement the principle of voluntary government financing—how to determine the best means of applying it in practice—is a very complex one and belongs to the field of the philosophy of law. The task of political philosophy is only to establish the nature of the principle and to demonstrate that it is practicable.

Please note the last sentence, she is claiming that voluntary government financing is practicable, and implies that she will show that it is. One might go so far as to say she hasn’t grounded her theory of Government until she has. But does she do this? I say no, and I’m going to critique each of the specific “suggestions” she offers.

But first, a general observation: compulsory taxation has been a feature of every Government in recorded history. If you know of a contrary example, please share. The most enlightened rulers in history have lowered taxes, or reformed the means and bases of taxation, however, over thousands of years of recorded history no system of voluntary taxation has yet been invented. Is this for lack of will? Taxation has always been one of the principle causes of political unrest, wouldn’t the ruler with a truly innovative, henceforth pain-free way of financing the functions of Government be swept into office or onto the throne?

I don’t think I’m engaging in hyperbole when I say, pardon some cribbin’ from Edward Gibbon, the invention of such a system would be a “singular event in the history of the human mind”. I’m of the view that it can’t be done, and if this makes me the last devotee of Ptolemy before the Copernican revolution, I’ll be happy to wear posterity’s dunce cap.

The closest example I know of is the United States under the Articles of Confederation. Pre-Constitution, the federal government didn’t have the power to impose taxes, and following the Revolution the soldiers went unpaid. Robert Morris, who had fronted their pay out of his own pocket, expected to be paid back. Requests were made to the states, and the money didn’t materialize. The unrest this caused, possibly orchestrated by him, was a factor leading to the replacement of the Articles of Confederation by the Constitution, under which the federal government does have the power to tax. We easily could have had a second revolution instead.

Back to Rand:

The choice of a specific method of implementation is more than premature today—since the principle will be practicable only in a
fully
free society, a society whose government has been constitutionally reduced to its proper, basic functions.

There’s a glaring chicken vs. egg paradox (contradiction?) here, how can the society be fully free if compulsory taxation is still in place? What’s worse, she doesn’t indicate why the implementation of a new form of Government financing must come so much later.

From there she moves on to her three “illustrations”, a lottery, a stamp tax, and insurance on credit transactions. The problem with a lottery is obvious, how would the Government’s lottery compete with private gambling? Is there any reason to think Government sponsored gambling will have a competitive advantage? Granted some people voluntarily accept a lower return on war bonds, but how many gaming tickets will patriotism sell in peacetime? One may as well suggest the Government engage in any other kind of business, say, pornography or prostitution or raising chickens. Rather than belaboring the point (by all means, it can be discussed further), I conclude that without a ban on private gaming, this idea is a nonstarter.

Next, the stamp tax. She doesn’t call it that of course, but she describes a system where contracts have to registered (including a fee) with the state in order to be later enforced by the courts. She allows that this registration is optional. I don’t believe it takes much imagination to visualize a system similar to our current credit rating bureaus (or Dun & Bradstreet or even the Better Business Bureau) that could compete with the Government in providing private arbitration. The Government’s advantage is the ability to initiate force, but a bad mark with D&B could easily put your opponent out of business without the Sheriff coming to padlock the door. It’s all a matter of cost, if a private system is more economical, naturally the Government’s fee revenue is going to dry up.

Finally, there’s insurance on credit transactions. The argument against the stamp tax applies here mutatis mutandis, and is even easier to visualize since the system is already in place. It’s rare for credit card companies to sue for nonpayment, since borrowers can avail themselves of bankruptcy and the cost of litigation is typically more than is worth the lender’s while to pursue. So, deadbeats get bad credit records, then no one will extend them credit; that’s the way the system works, and Government’s role nowadays is mostly to hamper this system (see Fair Credit Reporting Act etc.). In her presentation of this idea, Rand adds the (chilling?) observation that the current system amounts to a “subsidy” from the Government; given that the banks involved pay taxes under the present system (corporate tax, etc.), one wonders why she put in this hint that something unfair is currently going on.

Is there a fundamental reason why voluntary taxation can’t work? I see a common problem running through each of Rand’s illustrations. I’m happy to concede, for the sake of argument, that the legal system can be self supporting. The trouble is that police and especially armed forces can’t be. This means that under a voluntary model tied to services whatever income is produced from the legal system side has to cover the cost of the other two functions. Therefore, the prices that must be charged for the voluntary services can’t, in principle, compete with free market alternatives.

Wrapping up, here’s Rand again:

In order fully to translate into practice the American concept of the government as a
servant
of the citizens, one has to regard the government as a
paid servant
.

And to add my own view: one must recognize (and reconcile?) the paradox that even “good” government sustains itself by coercive means, and these means have to be maintained under carefully defined controls and limitations. “Eternal vigilance”, “a republic if you can keep it”, etc.

Link to comment
Share on other sites

I’m happy to concede, for the sake of argument, that the legal system can be self supporting. The trouble is that police and especially armed forces can’t be.

I don't mean to disrespect your OP by not responding to it substantively... but I have a question: if the police and armed forces provide people with a good (and I would say they do; I like having police and military), why wouldn't people be willing (that is: voluntarily) to pay for them?

Link to comment
Share on other sites

I don't mean to disrespect your OP by not responding to it substantively... but I have a question: if the police and armed forces provide people with a good (and I would say they do; I like having police and military), why wouldn't people be willing (that is: voluntarily) to pay for them?

I'm afraid I snipped the last Rand quote, here goes again:

In order fully to translate into practice the American concept of the government as a
servant
of the citizens, one has to regard the government as a
paid servant
. Then, on that basis, one can proceed to devise the appropriate means of tying government revenues directly to the government services rendered.

That's all I have time for now, I'll unpack it later if need be.

Link to comment
Share on other sites

Also, in the case of police and/or courts, there are a few other ways to fund them, too. Without going into the merits (just for the sake of raising other alternatives), you could set up a system where someone is charged after the fact for making use of a service. It goes against most current conceptions of police being "free", but we all know that's not true anyway. I.e. the police will show up regardless, but then (part of) the cost will be billed to the person who benefited from their response. For certain other services that are more preventative in nature, one could imagine making these conditional upon sufficient funding; if you want them to patrol regularly in your neighborhood, donate more. Yes, some people would probably be in the position that they couldn't afford to pay, but this would probably be a minority (and you can compensate for that in other ways, maybe charge everyone cost + 10% to account for missed payments).

In the case of criminal acts, one could also imagine using them as labor (for certain projects that need to be done anyway) so that may partially offset the cost of these acts, too.

As far as the military goes, I would imagine there'd be a fair amount of donations, too. Most free countries with a volunteer army wouldn't need *that* much military funding in peacetime, and for fighting a just war I am willing to bet quite a few people would willingly donate money. Yes, it makes it harder for the government to fight unpopular wars, but that's probably a feature, not a bug :)

Another way to raise funds could be to use a poll tax; simply say that if you want to vote, you have to pay 2 or 3 or 4% of your income as a fee. That way, there is no coercion because you can simply not vote if you wanted to, and you are paying for the privilege of electing officials in various positions. That could also raise quite a bit of money, and government would be MUCH less expensive to run in this situation. You would probably only have 2-3% of GDP in peacetime, or something of that nature. And in wartime, again, it would be a lot easier to raise money if the war was just.

Link to comment
Share on other sites

Ninth Doctor, I'm honestly can't follow you train of thought in your first post. What's the point? What is your question/objection/argument?

All I can say is (1) It makes no sense either to argue "You haven't figured out how to implement X, therefore, it is immoral" or (2) "The Confederation failed, therefore, anything similar to it will always fail."

Link to comment
Share on other sites

Check out the thread Is Taxation Moral? I start out with a position substantially the same as yours and even use the Articles of Confederation period of American history as an example. It was pretty much just me against all of OO.net. The discussion there has not really been concluded, so I hope you chime in after reviewing the thread.

Link to comment
Share on other sites

1. Taxation has always been one of the principle causes of political unrest, wouldn’t the ruler with a truly innovative, henceforth pain-free way of financing the functions of Government be swept into office or onto the throne?

Yes and no. In a sense, this has already happened, through the advent of the democratic state and the use of borrowing and inflation to take away the pain of direct confiscation. Originally, as I'm sure you are aware, prior to the twentieth century, there was never anything like modern taxation in place. There was no income tax in America, and there surely was no income tax anywhere near the levels we have today. The model was more of a clear-cut line between the small ruling class that taxes the majority of people, directly using the police and military power to oppress and maintain control over the population.

Now we have moved away from this model, which as you mention, is prone to unrest and revolutions, if such direct taxation grows too high. Instead, since Prussia's Bismarck, we have moved toward a governmental structure that more resembles a redistributive one, where it is more difficult to see such clear-cut lines between a small aristocracy and the masses. States now increasingly engage in a policy of actively buying support among the people outside of the governmental apparatus itself. Through a system of transfer payments, grants of privilege to special clients, and governmental production and provision of certain "civilian" goods and services (as for instance education), the population is made increasingly dependent on the continuation of state rule. People outside the governmental apparatus increasingly have a tangible financial stake in its existence and would be harmed, at least in the short run and in parts of their existence, if the government were to lose power. Quite naturally, this dependency tends to reduce resistance and increase support. Exploitation may still seem reprehensible, but it is less so if one also happens to be someone who at least on some fronts is a legal benefactor of such actions. (Cf. Hoppe "The Economics and Sociology of Taxation," chapter 2, The Economics and Ethics of Private Property, pp. 66ff.)

So in this sense, no, there's no reason to assume the practicability of voluntary government financing depends on whether or not it has ever been put into place, or that if it were practical, there would have to be an incentive or tendency to do so. It could just be exactly that: lack of will. For is not the ruling class generally eager to maximize its revenue and expenditures, and eager to maximize its support among the population? Then is there not a tendency for the population that is increasingly dependent on this schema to actually react negatively towards any suggestion at voluntary financing of government, as that would actually be seen as painful to them, when in their view, as Bastiat said, "everybody endeavors to live at the expense of everybody else"? This has the effect of producing "the illusion in the overwhelming majority of taxpayers that the 'rich'—meaning the people in the brackets above them—are really paying for most of the benefits that the majority gets from the government. . . lead[ing] them to accept complacently a burden of government expenditure and taxation that they would not otherwise tolerate. . . under the belief that the whole costs will be thrown upon others." (Cf. Hazlitt "Soaking the Rich," chapter 14, Man versus the Welfare State, pp. 107-108, also quoting WEH Lecky.)

2. There’s a glaring chicken vs. egg paradox (contradiction?) here, how can the society be fully free if compulsory taxation is still in place? What’s worse, she doesn’t indicate why the implementation of a new form of Government financing must come so much later.

I don't think you've fully understood her statement then. Earlier, you had stated that you didn't think voluntary financing could work, that no one would ever agree to it. But this is what Rand is saying, that if we have a society that accepts welfarism and parasitism, then of course it isn't practicable. It will only be practicable when the state is limited to its basic functions, in her view, i.e. such an extent that it doesn't need to engage in the kind of spending confiscatory levels of taxation makes available. She's just saying that it would be pointless to advocate abolition of taxation as a practicable goal right now, due to the fact that people want high levels of government spending, desiring to maintain or even increase the current size of the federal government. If you can't convince them to limit government to its basic functions, then you will never convince them of the practicability of voluntary financing.

3. But first, a general observation: compulsory taxation has been a feature of every Government in recorded history. If you know of a contrary example, please share.

There are a few off the top of my head. See the old city-state of Hamburg as described by William F. Warren in his 1876 paper "Tax Exemption the Road to Tax Abolition." See also Adam Smith, Wealth of Nations, pp. 801–03. See also studies of medieval Iceland, which relied on a completely voluntary system of financing, until unification under the Norwegian monarchy.

Now I would address your arguments against the various suggestions or proposals Rand makes, but I find as per the post above that I really don't understand what your arguments are here. Given that, then your conclusion about the inevitability of government coercion is a but premature.

A. Lottery and competition

For the lottery objection you merely ask how will it compete with private gambling. I don't think you have gathered enough evidence there to show that a pan on private gambling would be necessary, otherwise the forces of competition would keep people from buying tickets. Now obviously, in order for a lottery to raise money, people have to choose to buy the tickets. But why can't people just simply choose to buy the tickets? If people just don't buy tickets, that is the same as saying people just don't want to voluntarily donate, so this objection amounts to "voluntary government financing would fail because people wouldn't choose to voluntarily finance the government." I find this rather less than convincing.

B. Contract insurance fees and competition

Again, the specter of competition is raised against this suggestion. But the government's advantage in this case is precisely that only those contracts which are insured with the government are legally valid and enforceable. So, in this way, the government is not competing with private arbitration, it has a monopoly.

C. Competition and credit transactions

You treat the two as if they were separate. The suggestion was for contract insurance fees, which apply to credit transactions, not one program for contract fees and credit fees. Her point is that credit transactions are contractual transactions. So if the first critique about private arbitration failed, then it applies to this equally. Injured parties who don't fund the government just won't be able to seek redress in the government's courts. Your comment about Rand's mention of a subsidy, is taken, but what does this have to do with its practicability?

Link to comment
Share on other sites

Without going into the merits (just for the sake of raising other alternatives), you could set up a system where someone is charged after the fact for making use of a service.

Scary implications there. You didn’t pay for your rape kit last time, you Alaskan hussy! Your 911 privileges are revoked. Anyway, there are fines of course, but they’re properly assessed against the perp, not the victim. If you're saying police should be funded via fines, don't you see a problem there? A conflict of interest?

In the case of criminal acts, one could also imagine using them as labor (for certain projects that need to be done anyway) so that may partially offset the cost of these acts, too.

Like community service for drunk drivers? Or are we talking Jean Valjean and Solzhenitsyn material here? I don’t like the idea of the Government having gulags to send people to. I assume that crooks are going to get into office from now until the end of time, so keep those predators declawed.

As far as the military goes, I would imagine there'd be a fair amount of donations, too.

I hope to maintain a respectful tone on this thread, so I’m going to put it like this: like me, you have a vivid imagination. I can picture something like the annual fund drive for public television: Call in by the end of the hour and your contribution will be matched by Warren Buffet, and the budget for new cruise missiles will be met for all of 2012! Having worked in the tax field for lots of years now, I find the notion comical. You know that in the Middle Ages they used to collect the tithe by force? It’s supposed to be your contribution to God, yadda yadda yadda, but when it’s 10% of your product and you’re living in a mud hut slurping pottage, you’re liable to lynch the pastor if he doesn’t come by to collect with an armed escort.

Yes, it makes it harder for the government to fight unpopular wars, but that's probably a feature, not a bug :)

Indeed, I’m all with you there.

Another way to raise funds could be to use a poll tax; simply say that if you want to vote, you have to pay 2 or 3 or 4% of your income as a fee.

This will take us off on a tangent, I’m afraid. One of the points I always bring up (eventually) when discussing politics is my solution to Government corruption: a Government with no favors to bestow. But there’s a corollary: a Government no one who is ambitious cares to be elected to, or work for. So, poll tax gets the shoulder shrug from me. One other thing though, you say people would have to pay a percentage of their income? Um, implications? What happens if I lie, is there going to be an audit? Who’s going to do that audit?

Ninth Doctor, I'm honestly can't follow you train of thought in your first post. What's the point? What is your question/objection/argument?

Train of thought? It amounts to a point by point critique of Rand’s essay. She claims that her job is only to demonstrate that a system of voluntary taxation is “practicable”. I go through her attempts to show it, and conclude by pointing out a basic flaw.

All I can say is (1) It makes no sense either to argue "You haven't figured out how to implement X, therefore, it is immoral" or (2) "The Confederation failed, therefore, anything similar to it will always fail."

I didn’t say either of those things.

Check out the thread Is Taxation Moral? I start out with a position substantially the same as yours and even use the Articles of Confederation period of American history as an example. It was pretty much just me against all of OO.net. The discussion there has not really been concluded, so I hope you chime in after reviewing the thread.

I hadn’t seen that thread before. It’s a long one, this will take time. From the thread title and the opening post it looks like the argument is that taxation is moral, and I haven’t said that. I think you can glean my view on that from the last paragraph of the first post.

Edited by Ninth Doctor
Link to comment
Share on other sites

But you stated that there was a "fundamental flaw," a "reason why voluntary [government funding] can't work," however, you never gave us this reason. You said "the trouble is..." that police and national defense can't be voluntarily funded. But this isn't a reason, rather a conclusion, the very one you are supposed to be providing a reason for. Your next sentences are "This means..." and "Therefore..." but nowhere do we actually get the "fundamental flaw."

Link to comment
Share on other sites

But you stated that there was a "fundamental flaw," a "reason why voluntary [government funding] can't work," however, you never gave us this reason. You said "the trouble is..." that police and national defense can't be voluntarily funded. But this isn't a reason, rather a conclusion, the very one you are supposed to be providing a reason for. Your next sentences are "This means..." and "Therefore..." but nowhere do we actually get the "fundamental flaw."

From OP:

This means that under a voluntary model tied to services whatever income is produced from the legal system side has to cover the cost of the other two functions. Therefore, the prices that must be charged for the voluntary services can’t, in principle, compete with free market alternatives.

From Rand (see my second post):

Then, on that basis, one can proceed to devise the appropriate means of tying government revenues directly to the government services rendered.

How do you directly tie national defense “services” to revenues? I wrote about police already, where fines are a possibility, but they bring in a conflict of interest problem.

It could just be exactly that: lack of will.

Am I right that you believe there is a workable system just waiting to be implemented, and lack of will engendered by a culture of dependency on Government handouts prevents it from finding support? I will absolutely concede that there are certain deranged college professors who would react this way if a workable system were proposed, but I don’t believe it goes much further.

Earlier, you had stated that you didn't think voluntary financing could work, that no one would ever agree to it.

Huh? I think “the people” would be lining up to agree to it with wild enthusiasm.

There are a few off the top of my head. See the old city-state of Hamburg as described by William F. Warren in his 1876 paper "Tax Exemption the Road to Tax Abolition." See also Adam Smith, Wealth of Nations, pp. 801–03. See also studies of medieval Iceland, which relied on a completely voluntary system of financing, until unification under the Norwegian monarchy.

All I found on Warren was a critique by Murray Rothbard, and not enough for me to comment on. For the Smith I need a better citation, my pages 801-803 talk about clergy privileges. Book number, part number? I know a little about the old Icelandic democracy, but not about how they collected resources for defense etc. Do you have a reference? Who did they have to defend against anyway, Vikings? I’d like to suggest that any system, to be judged workable, needs to be applicable not just to the USA of 2011, idealized to remove our foreign adventures (er, commitments) but, say, Prussia during the Seven Years War. So, enemies on all sides, what does the Government do? Hold a lottery?

For the lottery objection you merely ask how will it compete with private gambling.

Why should the government be specifically in the gambling business? As opposed to any other business. Why not cattle ranching?

B. Contract insurance fees and competition

Again, the specter of competition is raised against this suggestion. But the government's advantage in this case is precisely that only those contracts which are insured with the government are legally valid and enforceable. So, in this way, the government is not competing with private arbitration, it has a monopoly.

You’ve completely ignored my argument.

Link to comment
Share on other sites

The quote function isn't working for me apparently, so you'll just have to follow along.

If your arguments are correct, at the very most, you've proven that lotteries and contract insurance fees aren't a practicable way to fund government (and I don't think the arguments you gave against those two things work.) We can't, just from being shown these particular instances of impracticality, see any "fundamental flaw" that shows all and any instances of voluntary government financing must necessarily fail.

For instance, suppose I say that I want socialism, and I say that by (1) flapping my arms, and by (2) thinking happy thoughts, just as a suggestion, a possibility, a vague "throwing it out there, guys" of how socialism might be implemented, and then you come along and prove that 1 and 2 won't work to implement socialism. Just from having disproved 1 and 2 from being practicable, it doesn't follow from that alone that there is no conceivable way of implementing socialism. For that, you'd have to show something much deeper than just pointing at particular instances. You'd have to show what it was that works as a causal mechanism inherent in socialism that makes it impossible to implement, e.g. that lack of private property leads to inability to economically calculate. At most here, you can only have shown that lotteries and contract insurance fees don't work (and I don't even think you've shown that), but not that voluntary funding is fundamentally flawed.

But everything you say after "this means..." holds true only if what you're saying before that (police and national defense can't be funded voluntarily) is assumed to be true. But that isn't an assumption you're entitled to make, otherwise your argument is begging the question.

You're free to assert that all voluntary methods can't compete with private methods, but that hasn't been shown. After all, what a private gambling service has to offer isn't exactly the same good. The consumer of this service may choose one casino over another for a variety of reasons. The consumer of the government funding lottery is getting a want satisfied that he can't get from a private casino, i.e. the funding of the government. There's no reason for us to conclude a priori that private gambling services will drive the government lottery out of service. The same goes for contract insurance fees.

As far as that Rand quote about tying revenues to services, you only protect people that donate is what that means. In economic terms, you exclude non-contributors.

Yes, you are right that I think a voluntarily funded government is entirely possible and workable, if there exists enough people that want it. All that is a problem is there is person A (the citizen) who needs to get money to person B (government employees.) That's it. There is no inherent economic laws preventing this from happening if the people involved so desire. The relevant section from Smith is basically stating that: "In a small republic, where the people have entire confidence in their magistrates and are convinced of the necessity of the tax for the support of the state, and believe that it will be faithfully applied to that purpose, such conscientious and voluntary payment may sometimes be expected." In other words, if the will is there, if people are ready to fund X, then X will receive such funds.

No, I think a little bit more than just "deranged college professors" are the only people that would object to abolition of all taxation. I think people want taxes, want to be taxed, and want others to be taxed, and have powerful reasons why this is the case. If what you're saying is true, that people would be lining up for it, then we would have it already. All governments operate by consent of the governed. If literally everyone in the country except a few deranged college professors wanted tax abolition, we would have it already. People don't want to get rid of taxes, they want government spending.

As far as your rebuttal of the historical examples, well now you're changing the terms of the argument. All I was saying here is that there are historical examples of voluntary government financing, which you asked. I make no claim about their applicability to modern America.

And now if I ignored your argument against contract insurance, then it's because I don't know what it was, aside form the fear of private competition depriving the government of payers, which I addressed.

Link to comment
Share on other sites

Ninth Doctor,

in the next sentence down I specifically stated that for the first alternative (charging part of the cost to someone who makes use of a service) you probably would set it up in such a way that continued protection is NOT linked to whether you had the ability to pay last time. And sure, that probably means that some people won't pay; however, I think the vast majority would if the police did an excellent job. If there is no other taxation people would have much more money to spend, and I think most people are rational enough to realize that it would be in their interest to give a few hundred dollars to their local police department to make sure they can continue to provide excellent protection.

I'm not saying all of it need be funded this way, but it's a matter of fact that some people will directly benefit from police more than others in life. Currently, everyone pays more or less the same towards it; why is it so inherently bad to shift part of the cost to those who actually end up using it?

As for the poll tax, there's various ways that can be administered. In this day and age, with almost everything being done electronically it wouldn't be too hard to set up a system that records people's incomes, just for the sake of administering a tax like this. Sure, there'd probably be some fraud, but given the amounts we're talking about I don't think evasion would be that much of a problem.

Again, the fact that you think it unlikely that the average person today wouldn't volunteer is entirely irrelevant. People have been used to confiscatory levels of taxation for decades now, and it will take a while to change that. But before taxes used to be that high, note that charitable giving was much greater than today. It's not without precedent to suppose that you can raise a few % of someone's income in voluntary donations, considering even today many people donate 4-5% of their income to charity anyway. If everyone did that, you'd have funded the government easily.

As for wars: in defensive wars you can also finance them in various ways and them demand reparations from the aggressor that cover a significant portion of the cost of it. If you issue war bonds and people buy them, yeah, you eventually have to pay them back, but this can be done over a long time frame, too, and when you think of, say, WW2, there was a lot of patriotic investment going on back then by the population here to support the war effort. You can't simply say that people would be totally unwilling to do these things voluntarily. Yes, it would be problematic raising 300% of GDP, but that's true of any government any time.

Edited by Maarten
Link to comment
Share on other sites

Also, in the case of police and/or courts, there are a few other ways to fund them, too. Without going into the merits (just for the sake of raising other alternatives), you could set up a system where someone is charged after the fact for making use of a service. It goes against most current conceptions of police being "free", but we all know that's not true anyway. I.e. the police will show up regardless, but then (part of) the cost will be billed to the person who benefited from their response. For certain other services that are more preventative in nature, one could imagine making these conditional upon sufficient funding; if you want them to patrol regularly in your neighborhood, donate more. Yes, some people would probably be in the position that they couldn't afford to pay, but this would probably be a minority (and you can compensate for that in other ways, maybe charge everyone cost + 10% to account for missed payments).

My concern: practically speaking, the police function, by its nature, requires rapid response. There is no time to verify whether or not a citizen has paid for this or that program of protection. Also, it is to my self-interest to have all citizens covered by the police, since uncovered citizens would become a source of social violence, either as victims of criminals, thus increasing criminality, or criminals themselves, out of a need for self-defense.

Link to comment
Share on other sites

I think most people when presented with the idea of a voluntary funded government object because they rightfully conclude that no one would voluntarily pay for the monstrosity that we call the government today. As you engage in the imagining of voluntary financing government you must take away all of the things that it wont be doing like the FHA, FDA, EPA, USPS, DEA, FAA, FCC and so on. A government that is doing what it should, with enough resources to do it, would easily be financed by a nation as rich as the US. In 1900 the percent of GDP used by the US government was under 5 percent and it was still doing things it shouldn't I can easily imagine people voluntarily contributing 5 % of their income, heck many people send 10% every month to their church.

Link to comment
Share on other sites

My concern: practically speaking, the police function, by its nature, requires rapid response. There is no time to verify whether or not a citizen has paid for this or that program of protection. Also, it is to my self-interest to have all citizens covered by the police, since uncovered citizens would become a source of social violence, either as victims of criminals, thus increasing criminality, or criminals themselves, out of a need for self-defense.

Exactly, which is why I stated several times that this should be something determined after the fact; not a prerequisite for whether the police comes to your house. However, I don't see any issue with charging people after the fact. Not paying could have other consequences, though. They could publicly post a list of people who refuse to pay, for example. That probably would provide quite a bit of incentive for anyone who really does have the ability to pay to actually do it.

Maybe there are fundamental issues with this proposal, but I don't think this concern people keep bringing up is necessarily a problem. I sincerely doubt that the average person whose house is getting burglarized would mind that much paying, say, 200 dollars after the fact to the police that showed up in a timely manner (especially considering there wouldn't be any taxes, people would have far more disposable income).

Does anyone have an objection to this idea that is not something I already addressed?

Link to comment
Share on other sites

Exactly, which is why I stated several times that this should be something determined after the fact; not a prerequisite for whether the police comes to your house. However, I don't see any issue with charging people after the fact. Not paying could have other consequences, though. They could publicly post a list of people who refuse to pay, for example. That probably would provide quite a bit of incentive for anyone who really does have the ability to pay to actually do it.

I cannot believe how often I see supposed individualists relying on peer pressure to make their ideal society work. It's ridiculous.

Maybe there are fundamental issues with this proposal, but I don't think this concern people keep bringing up is necessarily a problem. I sincerely doubt that the average person whose house is getting burglarized would mind that much paying, say, 200 dollars after the fact to the police that showed up in a timely manner (especially considering there wouldn't be any taxes, people would have far more disposable income).

Does anyone have an objection to this idea that is not something I already addressed?

Yes, I object to protection rackets. Can't you see the economic motive here to stage fake crimes in order to raise money? This already happens with the drug war, both with property forfeitures and arrest quotas.

Edited by Grames
Link to comment
Share on other sites

I am not proud of it, but in that hackneyed case sounding like those Objectivists who can only implicitly quote Miss Rand would be necessary. All the arguments I am going to be refuting are highly similar to those of the average anti-capitalist:

Why is taxation immoral?---
Briefly, man has to rely on his judgment to rationally contend with the facts reality, thinking is a volitional process. But the momentary whims of an incidental thug are not facts of reality; man can neither predict nor rationally handle them. His only way to survive them is therefore to avoid them ahead. Distinguished principle to describe a proper avoidance may be found in the concept of individual rights. There are no rights but the rights of the individual, and such rights contain, among others, the right to property: As it causally and naturally is, a man can do whatever he pleases (speaking within a limited context) with the goods he produced and the wealth he created. If one planted the seeds of an apple tree, they would not disappear for no satisfactory reason. Thus, the right to property is the corollary of the recognition of Law of Causality. In the field of ethics, rights mean your chance to live for the sake of your life. In the field of epistemology, it is your alternative of thinking or not thinking. It is your rational self-interest to recognize the nature of other human-beings like yourself, and to act accordingly to yours. It is your rational self-interest to live in a society where the initiation of physical force is completely denounced, no matter on what grounds it is used. It is your anti-rational "self-interest" to live by plundering others. I suppose that's no news to you.

But how can Society / the Nation exist without collecting any sort of taxes?---
Whether or not that statement is true in itself, I intentionally mentioned life as an end in itself right above. It is utterly evil to sacrifice the rights and the choices of the individual for some "higher good." This statement is somewhat similar to the voices made by Zionists in Israel: Faith kept the Jewish People alive.

But such a society would be impossible! / No such state has ever existed!---
Not as in the inanimate, in man, 'possible' is a logical default. Possessing a faculty of volition, everything is possible for man to do except what contradicts the metaphysical-given in a specific manner---and as such its consequences. Proposing that something is "impossible" requires more of evidence. But in this case it is not based on any evidence, but on the arguer's habits. You are used to this kind of system, and therefore conclude that it is of some metaphysical necessity.

I say that an absolutely taxless society is impracticable because of some concrete reasoning.---
The right to property, or the right not to be robbed, is a principle. Hierarchically, ideas have primacy over practical applications, for the same reason (objective) abstractions work in reality, and that thinking necessarily leads to objectivity. How to solve the problem is one question, a question that might be probably easily solved---but first one has to understand that the principles that will later make the answer possible and determine its course. In any case, the moral is the practical---otherwise what would the point in being moral be?---theoretical considerations regarding man's guide of action are applicable in reality, which is compatible with the fact that all crises thus far have been the consequence of governmental policies---not of the acts or liberties of the individual.

And what if individuals wouldn't pay any voluntary donations for the protection of individual rights? ---
In spite of the fact that it is highly unlikely given that we hypothetically managed to convince people about the need of an absolute, consistent freedom, yet the equation is not this complex at any rate: People don't pay for it ==> they won't have it. Neither is self defense a 'human right' in the Marxist sense, and individual-rights need realization before than can be obtained. But it most certainly does not grant any right to exploit them for your needs. Is that what you want freedom for?---This semi-dictatorship that allegedly promotes freedom?

But I *need* to force taxes upon people in order that I can defend myself from threats! ---
Too bad, that's none of their fault.

I just want minor taxes, not something to serious. What's the problem with that? ---
Well, it is compulsory and, in essence, dictatorial, the same way F=am applies to my 400-pound-car. There is no principle that can possibly praise that and yet condemn any other system of taxation. Now you are forcefully taxing people. Tomorrow you will "generously" prevent a workers revolution, by rewarding the non-productive and the freak for being non-productive and freak, just "a little bit." From then on it is just a matter of time until the crisis is here and you will have to "acknowledge the failure of free market" and all that follows. Your system will hold more than the Founding Fathers', but shall still eventually crash and turn collectivist, and will never get perfection either.

That's all, folks. As simple as that.

Link to comment
Share on other sites

I was not too focused and careful while writing this post. My editing in []:

Briefly, man has to rely on his judgment to rationally contend with the facts reality, thinking is a volitional process. But the momentary whims of an incidental thug are not facts of reality; man can neither predict nor rationally handle them. His only way to survive them is therefore to avoid them ahead. Distinguished principle to describe a proper avoidance may be found in the concept of individual rights. There are no rights but the rights of the individual, and such rights contain, among others, the right to property: As it causally and naturally is, a man can do whatever he pleases (speaking within a limited context) with the goods he produced and the wealth he created. If one planted the seeds of an apple tree, they would not disappear for no satisfactory reason. Thus, the right to property is the corollary of the recognition of Law of Causality. In the field of ethics, rights mean your chance to live for the sake of your life. In the field of epistemology, it is your alternative of thinking or not thinking. It is your rational self-interest to recognize the nature of other human-beings like yourself, and to act accordingly to yours. It is your rational self-interest to live in a society where the initiation of physical force is completely denounced, no matter on what grounds it is used. It is your anti-rational "self-interest" to live by plundering others. [And if your practical stance differs from it, you do not have the right to criticize a case where people will treat you the same way you treat them.] I suppose that's no news to you.

Well, it is compulsory and, in essence, dictatorial, the same way F=am applies to my 400-pound-car. There is no principle that can possibly praise that and yet condemn any other system of taxation. Now you are forcefully taxing people. Tomorrow you will "generously" prevent a workers revolution, by rewarding the non-productive and the freak for being non-productive and freak, just "a little bit." From then on it is just a matter of time until the crisis is here and you will have to "acknowledge the failure of free market" and all that follows. Your system will hold more than the Founding Fathers', but shall still eventually crash and turn collectivist, and will never get [to] perfection either. [And that is a real waste of a situation in which people actually hold the right ideas.]
Link to comment
Share on other sites

I cannot believe how often I see supposed individualists relying on peer pressure to make their ideal society work. It's ridiculous.

Isn't that how issues such as discrimination would ideally be solved, though? It was my understanding that in the case of discrimination, Objectivism rejects laws banning the practice (because they restrict the right of a business owner to hire whom he pleases to) in favor of what basically amounts to the same as what I was talking about (i.e. businesses that are discriminatory should be shunned, and market forces will take care of the matter in the longer term). Why is the only possible solution something that is mandated to everyone by law?

Yes, I object to protection rackets. Can't you see the economic motive here to stage fake crimes in order to raise money? This already happens with the drug war, both with property forfeitures and arrest quotas.

You can come up with these types of scenarios for pretty much any situation. Yes, it's possible for people to be defrauded in this way, but this is hardly unique to the police. You could make the exact same argument when talking about any business transaction. This can easily be addressed by various means, whether that is judicial review or some other way isn't really relevant at this point.

Why would a police officer be much more likely than any tradesman to try and rip you off? And why wouldn't existing mechanisms that deal with these issues be sufficient in this case? If the local police department is staging fake crimes everywhere, sue them. That's ultimately what the judiciary is for.

Link to comment
Share on other sites

I am not proud of it, but in that hackneyed case sounding like those Objectivists who can only implicitly quote Miss Rand would be necessary. All the arguments I am going to be refuting are highly similar to those of the average anti-capitalist:

Who are you quoting? It looks like you’re talking to yourself and it belongs on another thread.

Yes, I object to protection rackets. Can't you see the economic motive here to stage fake crimes in order to raise money? This already happens with the drug war, both with property forfeitures and arrest quotas.

I’m all for levying fines against perpetrators, but charging fees to victims doesn’t sound right. There’s a conflict of interest problem, and it goes against Rand’s characterization of paying for police and national defense for the same reason you pay for insurance. If you get robbed or raped, if anything you ought to be expecting compensation from the police for not having protected you. For being negligent in their work.

Link to comment
Share on other sites

Who are you quoting? It looks like you’re talking to yourself and it belongs on another thread.
Besides the second paragraph which provides the general overview of the issue, it is based on arguments you and Grames (from the other thread, though I have not read it all) made the way I remember them. I could just make a comparison, but let's make it simpler: With which of the above statements do you disagree? Furthermore, is there any argument for taxes that did not appear in my reply?
Link to comment
Share on other sites

Besides the second paragraph which provides the general overview of the issue, it is based on arguments you and Grames (from the other thread, though I have not read it all) made the way I remember them.

The way you remember them? You have this wonderful technology in front of you, which makes it so convenient to quote the person you want to reply to, and you're just making shit up, having a dialogue with yourself. Start your own thread, call it Tomer vs. strawmen (so there's truth in advertising), and I'll ignore it in the order presented.

Link to comment
Share on other sites

As far as your rebuttal of the historical examples, well now you're changing the terms of the argument. All I was saying here is that there are historical examples of voluntary government financing, which you asked. I make no claim about their applicability to modern America.

You complain that I want to know more about the historical examples of voluntary taxation that you cite “off the top of your head”? If you know that your examples are irrelevant or don’t stand up to scrutiny, why offer them? Here’s a good counter example I’ll accept without evidence: there were hunter gatherer tribes on the plains of Africa 100,000 years ago that had no system of taxation, voluntary or compulsory, whatsoever. No doubt true, so what?

Now, Iceland. I checked Wikipedia, and it says “The followers of the goðar [the chieftan] owed them military service” and “At first the chieftains relied primarily on peasant levies”. Sounds like there wasn’t a central government imposing taxes, but military service coupled with “levies” paid to a local strongman doesn’t sound like a voluntary government financing system to me.

From what I gather about Hamburg, you were obliged to pay ¼ of your assets (!) annually to the state, and payment was on a kind of honor system, so you drop an envelope into a chest, and your name is crossed off a list. What happened to the people who didn’t have their names crossed off? Not clear. This does seem like the best counter example to my claim that no voluntary system has ever been instituted, though it lacks the key feature Rand calls for: “tying government revenues directly to the government services rendered.” FWIW, I think this example speaks volumes to the German cultural values of honor and oath keeping*, coupled with aversion to the intrusive means of tax collection then used elsewhere in Europe. Obviously it didn’t last, at least not past Bismarck. I can’t find info on how long it lasted or what brought it to an end. I’d like to know more about it, and am a bit suspicious since I’m having to learn of it from an American theologian whose bio states that he lived briefly in Bremen, not Hamburg.

* One of the features of German culture William Shirer cited critically in The Rise and Fall of the Third Reich; this cuts both ways.

While I’m thinking of it, there was a case in British history, I think it was in the mid 1700’s, when an income tax was instituted to finance a war. After the war, the tax was repealed and Parliament ordered all the records burned. Ah, the good ole days.

Edited by Ninth Doctor
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
 Share

  • Recently Browsing   0 members

    • No registered users viewing this page.

×
×
  • Create New...