Taxes: Government Financing In A Free Society

[gags]

I would be interested in why you think other taxes are rational, but yes Rand did oppose all taxation.

Did she really? Then how would one fund a government for which she saw a legitimate role?

[softwareNerd]

This previous thread (link) is relevant.

Also, a search for posts that contain the words "taxes" and "voluntary" brings up a few others. Use "+" signs to show you want posts that contain both words. The search term should look like this:

+voluntary +taxes

[JMeganSnow]

Did she really?  Then how would one fund a government for which she saw a legitimate role?

Voluntarily. Taxation does not refer to ANY form of government financing, but to FORCED government financing. Voluntary financing would be along the lines of "service fees".

[gags]

Voluntarily.  Taxation does not refer to ANY form of government financing, but to FORCED government financing.  Voluntary financing would be along the lines of "service fees".

Ok. Makes sense. How about to raise the money necessary for a national defense. Did she address that specifically?

[JMeganSnow]

Ayn Rand offers an example of voluntary government financing in the essay studentofobjectivism offers above.

[Cole]

Was Rand just opposed to the income tax, (Her justification is obvious), or was she against all taxes, as I feel that other taxes are rationally justified, (school tax, property tax).

How are they rationally justified? Do you not believe in property rights? How is it consistent with property rights to forcefully take money from a person that they would not have given voluntarily?

[whatisjohngalt]

Well, in saying that some taxes are rationally justified, as mentioned before, I was just implying that the government wasn't just taking your money. In terms of a school tax, I believe that one is necessary, in order to fund the schools, obviously. However, you may argue "why should the elderly pay a school tax, if they have no kids in school?" This is a valid point, but once one examines the benefits of a school besides the obvious ones, like education. These elderly people are paying their school tax in order to build the community of tomorrow, one in which they will live. Indirectly, by paying school taxes, they shape the youth of the community, ultimately building a better community for themselves.

I mean, how could Hank Rearden or John Galt have gotten educated without the taxes that funded the public schools which they attended? Doesn't a public school system benefit Dagny Taggart as she hires competant engineers or conductors? Even though Dagny has no children of her own, by paying these taxe,, she recieves benefits as well.

[JMeganSnow]

The purpose the money is intended for is a moot point. The point is: can the government expropriate money from its citizens at gunpoint?

If the answer is yes, the PRINCIPLE of property rights, and thus of individual rights, has been violated. Violating a principle means tossing it out all together. This is how we ended up where we are; the fact that our collapse into totalitarian dictatorship is happening slowly over the course of decades does not change the fact that it IS a collapse or the CAUSE of said collapse.

If the answer is no, then the rest is immaterial.

[Crow]

About public education: the state takes children by force from their homes at the point of a gun and glues them into whatever seat they deem fit teaching them whatever is whimsically approved by state legislatures to be worthy of force feeding the young minds without the consent of the parents. I would rather burn my money then mail a copper coin to such institutions.

[whatisjohngalt]

I would rather burn my money then mail a copper coin to such institutions.

But how do you expect to make that money without a public school system?

[LaVache]

Contract enforcement fees pretty much hits the nail on the head. We need a government as an insurance policy to ensure that justice is maintained between transactions between individuals; so, no matter if you're buying a house or a candy bar at a local store, in each transaction, a fee could apply that would insure your transaction so that you would not be defrauded. The "insurance policy" would be voluntary: if the store owner wishes to sell his products at cheaper prices than his competitors, he may forgo the extra cost of having his products insured. You, as the consumer, have the choice to purchase the cheaper products; but, you run the risk of being defrauded: your choice.

So you think that a business that defrauds it's customers will be able to stay in business...interesting theory.

Besides the uncanny resemblance to a stamp tax, sans the harsh enforcement thankfully, you really need to take into account that the vast majority of contracts depend on non-legal sanctions for their "enforcement." Industrial and consumers both aren't motivated by legal repercussions to withold their end of a contract, but by the fact that if they don't the person on the other side will either not uphold their end in response, or if it is too late for that they will at the very least never do business with that person again. Building a business around the alienation of your customer seems to be a pretty unsound business model. In some situations where the non-legal sanctions fail an arbitor can be brought in to help resolve the issue further.

On the topic of government lottery etc... I think that you have to take into account the fact that governments are historically very bad at running any sort of business enterprise, so what makes you think that it could compete against other private lotteries...unless you want the government to make non state run gambling illegal, which you don't.

While I agree that taxes are immoral, I find it amusing that many people seem to find it rational to think that they will be able to convince others to abolish taxes without presenting a viable replacement for government funding.

[JMeganSnow]

So, you're saying that it's perfectly all right for the government to expropriate your money and children?

We're not going to argue this on the terms of "better for society". Only that which is based on rational principles can be good for society in the long run, and putting children against their will and their parents will into mediocre state-run propaganda machines isn't good for ANYONE.

The Nazis were always GREAT supporters of public education. Ditto for the Soviets.

[Cole]

Well, in saying that some taxes are rationally justified, as mentioned before, I was just implying that the government wasn't just taking your money. In terms of a school tax, I believe that one is necessary, in order to fund the schools, obviously. However, you may argue "why should the elderly pay a school tax, if they have no kids in school?" This is a valid point, but once one examines the benefits of a school besides the obvious ones, like education. These elderly people are paying their school tax in order to build the community of tomorrow, one in which they will live. Indirectly, by paying school taxes, they shape the youth of the community, ultimately building a better community for themselves.

Education does not depend on the existence of taxation. Your argument rests upon the premise that there is significant demand for education. If this is true (and it is), then this demand for education also premises the conclusion that private schooling would be a successful investment. Since the fact that education has many benefits and that many people demand it is not being refuted, you do not need to bother proving it. The existence of the demand is a given. What is up for debate is the best way to supply education; either by competing providers subjected to the forces of supply and demand, or as a centrally-controlled government monopoly.

Edited June 14, 2005 by Cole

[HaloNoble6]

While I agree that taxes are immoral, I find it amusing that many people seem to find it rational to think that they will be able to convince others to abolish taxes without presenting a viable replacement for government funding.   

Funding the government is the last problem to be solved and giving this problem any level of significance or considering it some kind of major hurdle ahead of the development toward laissez-faire capitalism is bordering on mindlessness. It's like questioning the sanity of building an olympic stadium simply because the builders have not considered the angle at which the grass on the field is to make with the ground on a windless day.

Consider the kind of changes in character and ideology the present citizenry needs to experience before reaching a state of mind conducive to full-blown laissez-faire capitalism. "Staggering" doesn't even scratch the surface in describing this problem. Once there, however, "the problem of funding" is a non-problem because the government would be so small and the existence of insanely productive men so large that funding the government would be like me funding a lemonade stand. You notably wonder why no one in the literature has provided as extensive a solution as you demand and the answer is simple: The problem is irrelevant. More often than not this "problem" is used to show the "nonviability" of LFC.

Rest assured, when the time comes for LFC, the tenner of the men present at that time will be such that it will hardly be necessary to coax or provide "a convincing case" as to why funding their own protection is in their self-interest.

[LaVache]

Funding the government is the last problem to be solved and giving this problem any level of significance or considering it some kind of major hurdle ahead of the development toward laissez-faire capitalism is bordering on mindlessness.  It's like questioning the sanity of building an olympic stadium simply because the builders have not considered the angle at which the grass on the field is to make with the ground on a windless day. 

 

Consider the kind of changes in character and ideology the present citizenry needs to experience before reaching a state of mind conducive to full-blown laissez-faire capitalism.  "Staggering" doesn't even scratch the surface in describing this problem.  Once there, however, "the problem of funding" is a non-problem because the government would be so small and the existence of insanely productive men so large that funding the government would be like me funding a lemonade stand.  You notably wonder why no one in the literature has provided as extensive a solution as you demand and the answer is simple: The problem is irrelevant.  More often than not this "problem" is used to show the "nonviability" of LFC. 

Rest assured, when the time comes for LFC, the tenner of the men present at that time will be such that it will hardly be necessary to coax or provide "a convincing case" as to why funding their own protection is in their self-interest.

I would never say that LFC is non-viable simply because it is presently unclear how one part of it, and yes this probably would be the last part of it, will be implemented.

I just get frustrated whenever this question gets brought up, because no one tries explain it at all like you, but instead keep throwing out the same heavily flawed answers without trying to back them up. It is things like that that tend to give the impression of the existence of Objectivist Dogma.

Your point about the character of the citizenry is extremely valid. I'm having problems remembering the quote right now, but essentially it has been said that the quality of the government is a direct reflection of the quality of the citizen. Character might be substituted for quality, but the general idea is the same.

I will have to disagree with you somewhat about the size of the government, however. Unless the rest of the world becomes rational at the same time our country does we will still need to have and maintain the world's best military. While a government concerned mainly with national defence would be amazingly and wonderfully smaller than our current government funding it would most likely not be equivilent to funding a "lemonade stand."

Even when we come to the time of full blown LFC, and giants of industry, and those less giant, and etc... acknowledge the need to fund defense for their own self interest it doesn't completely solve the moral problem of freeloaders in the system.

[JMeganSnow]

::dons Moderator hat:: Please don't quote the entire post directly above yours, LaVache, it's not necessary and it bogs the forum down. ::removes Moderator hat::

Why are "freeloaders" a problem in the system? If you make less than a certain amount of money or you're on welfare NOW you don't have to pay ANY taxes. In fact, you probably get money FROM the government instead. It doesn't matter philosophically how many people pay for government financing or what percentage they pay as long as it's voluntary, just like it doesn't matter philosophically whether the government protects your patent for eighteen years or twenty-five, as long as it recognizes the principle of rights.

Heck, if you want to talk about bizarre financing schemes, why not make the president fund the government out of his own pocket? That would be an interesting scheme. It might have some technical problems, though.

Or we could make Congress sell cookies! It works for the Girl Scouts . . .

[HaloNoble6]

"The problem of freeloaders" is another gimmick to counter LFC. It's like saying we could never live in a free society because we can't solve the problem of criminals. I'm not saying freeloaders are criminals, they aren't, but the claim is similar.

Since man is fallible, he can be corrupt, mindless, and immoral--this will never change. However, consider the fact that for LFC to even be a popular option among a citizenry most of the people must consist of moral men.

Don't make the mistake of testing the viability of LFC with the kind of man most common today because doing so brings up these problems you're discussing (funding, freeloaders, etc.) which in the end are irrelevant. Always consider the singular nature of a man that supports LFC and then remember that for LFC to be even be possible, this kind of man must exist in the majority population of a citizenry.

[LaVache]

::dons Moderator hat:: Please don't quote the entire post directly above yours, LaVache, it's not necessary and it bogs the forum down.  ::removes Moderator hat::

Sorry about that...I get excited about what I'm typing sometimes and then I don't take the time to trim quotes, but I will watch that more carefully from now on .

The key moral issue is definitely is the funding of the government without coersion, but it just seemed to me like that system would just create a new class of second-hander: the one that reaps the benifits from others' donations to the government without themselves donating. We would most likely be left with the highest income earners still paying the majority of the governments expenses, albiet for different reasons thank Rand, and that looks like it may just be another way to get some people to carry the world on their shoulders again. I realize that the motives would be different, but it still looks like a bit of a three card monte, and one that makes it moral to carry others on your back, even if the carrying is a byproduct of the system as opposed to being the point of the system.

Also, any feedback on the issues I raised with contracts, lottos, etc... and the appearance of dogma would be appreciated.

[LaVache]

Always consider the singular nature of a man that supports LFC and then remember that for LFC to be even be possible, this kind of man must exist in the majority population of a citizenry.

I see what you are saying, and have to agree with its validity. I guess where I'm getting off at, so to speak, is on the way that this all sounds a little like the communist withering of the government. It all sounds nice, but it is almost inconceivable to put into practice. I'm not taking anything away from the morals here, but saying that the way to achieve LFC is to fill your country with essentially perfect people is not a practically useful excercise.

I think that by arguing against some of the proposals for government funding that I am falling into that same logical pit, and that I should be spending my time trying to figure out ways to push our government/intellectual community/culture in the direction that may one day result in that country filled with mostly perfect people. It's kinda like trying to build a bridge starting at the opposite bank, when you can't actually get to that bank without the bridge having alread being built. That analogy was a bit on the lame side, but it's all I've got at the moment.

[Captain Nate]

In my reading I haven't yet reached the part where Rand talks about how to fund government. I would imagine that some kind of tax would be necessary. For instance if the proper organizations of government were dependent on voluntary donations, then wouldn't the same dangers of a "mixed economy" come into play? What if the biggest donators decide that the military, law courts or police, only get funding as long as they side with them?

I know you're beginning with the premise that a LFC system would be made up of a majority of moral men, but that doesn't exclude an immoral person from gaining some influence, or a moral person making a human error.

I'm not proposing a large tax, or taxing certain people at the expense of others. Perhaps some kind of flat tax where everyone contributes (thus everyone definitely deserves equal protection), or a user-fee on those activities that the government will be enforcing (contracts? Deed transfers? etc.)

[HaloNoble6]

I think that by arguing against some of the proposals for government funding that I am falling into that same logical pit, and that I should be spending my time trying to figure out ways to push our government/intellectual community/culture in the direction that may one day result in that country filled with mostly perfect people.  It's kinda like trying to build a bridge starting at the opposite bank, when you can't actually get to that bank without the bridge having alread being built.  That analogy was a bit on the lame side, but it's all I've got at the moment.

Yes. Remember, the existence of a moral system of government ultimately depends on the existence of moral men. If LFC is achieved but then the numbers of moral men diminishes and thugs or criminals take over, is it the fault of the system? Obviously not. The logical progression is this: If a culture of moral men exists then LFC is viable.

Notice that these "problems" are only problems because you are trying to enforce personal morality onto citizens, i.e., because you are trying to keep a moral system of government safe from a culture that could possibly be dominated by immoral men. But a government is a reflection of its people, and if LFC fails it will essentially be the fall of the culture, not the system.

[The Guru Kid]

Donations?

If everyone was following objectivist principles, who would donate their money to the government?

[HaloNoble6]

Kid, I suggest you read some of the literature and first find out what Objectivist principles really are before asking a question that presumes you already understand them.

[JMeganSnow]

In truth, most men are moral, or at least try to be. The system as it exists now actually CREATES immorality; to paraphrase from Atlas Shrugged, when the tramp is telling Dagny about the 20th Century Motor Company's "ideal system"; who would care to be moral when the choice is between being a sucker and being a blood-sucker?

Keep in mind that, when we're talking about voluntary financing here, we're not talking about a situation similar to your office coming around with a can and saying "it's time to donate to the U.S. government again!" Instead, what needs to happen is that the government will start charging for services it supplies free. It will become an agent of the people, and, as Ayn Rand said, the most important thing to recognize is that it has to be seen as a paid agent. Nothing that comes from the government can be seen as "free" if men want to retain the right kind of relationship with the government.

So, Captain Nate, user fees are quite appropriate, but taxes are NOT; if you're going to pay for something, you need to GET a real, immediate benefit, such as a secured contract. Things like a government lottery, etc. are also appropriate. Saying that everyone needs to contribute is falling into the trap of egalitarianism, though. Will the great productive minds in the population carry most of the load for financing the government? Of course. One of the points of Atlas Shrugged is that these men DO carry the load of the world; nothing is going to change that. The important thing is that they do it not because they are altruistic or self-sacrificing, but because they love what they do. The ONLY thing they ask from the rest of us is that we stay out of the way and let them produce as much wealth as they can. Under LFC, with the world open to limitless achievement, they won't even notice that they're carrying the weight of the world along with them.

It is attempts to enforce fairness, not of opportunity, but of outcome that have led to some of the greatest swaths of destruction and mayhem in American history. I suggest you try the following experiment: ask ANYONE if they'd mind paying more government fees after they're rich than they do now. ASK them. I'm betting the response will be along the lines of: "but I'll be rich, right? Who cares! I can afford it!"

Okay, enough of that. LaVache, you won't find dogmatic Objectivists. Thinking in terms of principles requires that you apply your own thinking to validating and applying said principles. The philosophy itself is its own protection against dogmatism. Sometimes you may encounter rationalist Objectivists, but that tends to fade over time as they realize that their ideas are impossible to apply and Objectivism doesn't countenance any ideas that are impossible to apply.

[The Guru Kid]

Kid, I suggest you read some of the literature and first find out what Objectivist principles really are before asking a question that presumes you already understand them.

You're right. I was just looking for a quick reply right now. I should probably read VOS first right? I don't understand how taxes are immoral. Then again, i used to be a theist so i'm sure ms. rand's literature will once again change my opinions on issues and help me look at them rationally.