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Taxes: Government Financing In A Free Society

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I don't think you can conflate paying for insurance with paying taxes. In the case of insurance, there is the tacit agreement that the insurance company will pay to fix your car, pay your medical bills, etc., in exchange for your premium. So there is a direct incentive to keep paying into the system. In the case of voluntary government funding, if you don't pay, you still get use of the benefits of the government. The ever-present free rider problem.

I understand where you're coming from, and you make a valid point, but the free-rider problem is an economic issue, and is best applied to a system where players are in fact acting for profit.

In other cases, like the functioning of the Catholic Church, or charities, political campaigns (Obama raised 1 billion with a B dollars), it really is not a problem: the question is what would motivate people when deciding to contribute:

Is it profit, in a closed system-(I'm not an economist, the word closed is just a guess, might be a different system entirely), like in the "free rider problem" of economic science? I'd say far from it, in fact it is closer to the other examples, the ones I gave.

There are a lot more factors involved in our case, it's about raising children in a safe environment, a sense of community, moral considerations, peer and cultural pressure(not to be underestimated, when it comes to something like this), therefore, in my opinion, it would not be scientifically proper to apply the free rider peoblem here: it would be like trying to multiply a circle and a matrix, using the rules for numbers. ( I know that analogies are not helpful to further one's point, I'm just using it to ilustrate the point I made before )

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

One argument liberals often use when discussing public schools is "But it's in your interest to ahve an educated population!"

Which is, of course, perfectly correct. It is in my interest that people in general be able to read, do simlpe math, and know at least the fundamentals of history, philosphy, the arts and sciences (among other things). It's also in my interest that enough people go to college in certain fields, like medicine for example.

But then if it is in my interest, wouldn't I pay for it?

As a matter of fact I do. I contribute to charities that set scholarships for private schools (not necessarily for the poor, but I suppose the poor benefir most from such programs).

As a side note, Mexico's best engineering school, the Insitute for Higher Technological Studies of Monterrey, was set up by a group of industrialists who wanted to create a pool of local engineering talent. By now it's also the best highschool in the country, and among the best in Business studies. and it has extensive scholarship rpogrmas for students who perform well.

So there.

But the argument then goes something along the lines of "But most people are too stupid to realize this and must be forced to pay for the education of the poor." Not in so many words, but that's what it amounts to. the counter-argument that businessmen set up schools to meet their needs for an educated populace, and that they also set up charities for such purposes along with other people, falls on deaf ears; or I'm told "but that's not enough!

So, I know I'd pay for a proper government coluntarily because it is in my best ineterst to do so. Yes, I could protect myself with a gun, and I might anyway, but the deterrence created by a good police force and a court system not intent on punishing victims makes me a lot safer than any amoung of guns ever could. Not to mention that it takes an army to repel a foreign invader.

I suppose the argument then is: "But most people wouldn't!"

Maybe. the thing is "would enough peopel pay voluntarily for government?"

Not so long ago, before the New Deal and the New Society government growth binges, people did pay for most of their needs out fo their own pocket. Back then, to hear people who lived in those times talk about it, a lot of people, and I dare say the majority, were proud of being able to pay their expenses and debts, and spurned charity as an insult.

That's the kind of people who'd volunteer to pay for a government.

Right now there aren't enough such people, not even close. Too many have grown used to hand outs, and far from spurning charity they embrace it as a right dearer than free speech or freedom from coercion. If you made taxes, for lack of a better term, voluntary now, the big majority would refuse to pay.

That's one reason the culture needs to change first.

Now, as for plan B, I see two answers:

1) Taxes wouldn't be voluntary, or not completely. Consider that at today's prices a proper government would run with less than one trillion dollars (say about 500 billion for the US military, and I doubt more than 250 billion for all police and courts, plus maybe another billion in salaries for the inevitable ancillary government employees like congressmen and their staffs). Yes, that would be coercive, but the tax bill would be much lower and, presumably, the tax code would be much simpler and fairer (as in a flat tax). Or maybe all the needed money could be collected int he form of fees to insure court abitration of contracts (consider every credit card transaction is a contract). Whether we get to an all volunteer tax system or not, we'll pass through just such a stage.

2) the whole thing falls apart, and a country unwilling to pay for its own protection will get taken over by larger, better armed neighbors. Speaking of this, suppose not enough people volunteered fro the armed forces? Then the same kind of thing might happen (it is risky to invade a country with working ICBMs tipped with megaton warheads, army or no army).

So there.

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Vice Presidential Libertarian nominee for president Wayne Allen Root brings up and interesting idea of federal tax reform that I haven't thought of before. He proposes for all federal taxes to be abolished and replaced with a single tax upon the states levied in proportion to their population, thus leaving the actual responsibility of administering taxes to the states. If states were voluntarily financed under such a federal tax proposal, then it would even be consistent with the concept of a fully free society. I typically don't care for petty libertarian short term goals, but this is one that caught my eye and deserves recognition.

Edited by Miles White
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Vice Presidential Libertarian nominee for president Wayne Allen Root brings up and interesting idea of federal tax reform that I haven't thought of before. He proposes for all federal taxes to be abolished and replaced with a single tax upon the states levied in proportion to their population, thus leaving the actual responsibility of administering taxes to the states. If states were voluntarily financed under such a federal tax proposal, then it would even be consistent with the concept of a fully free society. I typically don't care for petty libertarian short term goals, but this is one that caught my eye and deserves recognition.

I've been chewing on this problem since I first discovered O'ism (2 yrs) and none of the solutions proposed for funding the federal gov't seem feasible, or, at least, introduce a contradiction that is tough to overcome. The free rider problem is a problem because greed is a primary motivator for individuals, as well it should be, so free riding would maximize a persons wealth accumulation (all other things equal, of course). That means that voluntary funding of the federal gov't by individuals would likely rely on altruist tendencies of a few... Or would it? More likely, the few who ended up footing the bill would be recognized as the funders and would necessarily receive favorable treatment from the govt servants, who would be financially beholden to the funders, and afraid to piss them off. This situation would be self perpetuating and amplifying, as those who did not receive favorable treatment would become even more reticent about volunteering hard earned money to fund an unfair system, etc.

Two solutions present themselves, and either would work, but perhaps combined they would be most effective.

The first is to have the populace consent (that is, vote by a large majority, with appropriate demographic conditions to protect against free riders gaming against the rich) to a taxation plan that funds the government. This would be "voluntary" in a way similar to the armed forces, in which you volunteer to serve, and then are bound by law to obey all lawful orders of superior officers.

The second is to reorganize government representatively, from the neighborhood up. In this case, each neighbor would voluntarily donate an amount to fund his local government. The neighborhood representative would likewise voluntarily donate part of the neighborhood funds to the city coffers on behalf of his constituents; cities to states; and finally, states would donate to the federal government. This establishes a chain of donations requiring justification and accountability at each level, rather than the federal system we have now, in which your taxes are set by a group of self-interested bureaucrats who vote based only on how much they can personally gain from taxing all of the constituents, not just their own. This system would also allow non-payers to be directly recognized by their neighbors, whether those non-payers be local individuals, neighborhoods, cities, or states. (although I'm not sure what moral recourse there might be in that case)

Combining these two approaches would probably be the best way to go. It would be up to the states to decide, as a body, in Congress, what the fair allocation of taxes would be, and how the government programs would be divided between states. (for instance, and only for instance, the amount a state paid in taxes would be indexed by the amount of funding of federal programs that operated in that state.)

Edited by agrippa1
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The free rider problem is a problem because greed is a primary motivator for individuals, as well it should be, so free riding would maximize a persons wealth accumulation (all other things equal, of course).

It's nice to see one's points being ignored. In a previous post, I explained exactly why wealth accumulation is rarely a "primary motivator for individuals". (if by primary you mean the most important, if you mean something else, say there is a hierarchy of motivators, and by som criteria this qualifies as "primary"-please do tell)

I did that to combat this specific problem being raised("free rider problem"), too.

The second is to reorganize government representatively, from the neighborhood up. In this case, each neighbor would voluntarily donate an amount to fund his local government. The neighborhood representative would likewise voluntarily donate part of the neighborhood funds to the city coffers on behalf of his constituents; cities to states; and finally, states would donate to the federal government. This establishes a chain of donations requiring justification and accountability at each level, rather than the federal system we have now, in which your taxes are set by a group of self-interested bureaucrats who vote based only on how much they can personally gain from taxing all of the constituents, not just their own. This system would also allow non-payers to be directly recognized by their neighbors, whether those non-payers be local individuals, neighborhoods, cities, or states. (although I'm not sure what moral recourse there might be in that case)

Now that would certainly create a free rider problem, at higher levels: low level politicians would not pass the money along, they would use it themselves, because it is in their interest to do so, and have specific achievements to show for themselves: what good it does to a politician to cite the feds' work during a campaign?

When you leave these desisions up to professionals(politicians), that takes away the exact factors because of which the free rider problem doesn't apply: patriotism, moral conviction, peer and cultural pressure etc., which are all making individuals donate to things they consider important for everyone, rather than their political career.

Can you imagine for instance if the Vatican decided not to accept direct donations from catholics, or make money in any other way, but just get by on money passed along by priests and mid-level "management"(whatever they're called)? Now imagine if they did that, but all the managers were self interested and cynical-and up for reelection: would the Vatican have more money or less?

Edited by Jake_Ellison
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I'd just like to address the question of defence spending for a moment.

While it is true that the US has enough nukes to glass over most of it's enemies that fact alone is not enough to provide for the defence of the nation. Conventional forces are and would still be required.

Having said that though I would not expect the US to continue to have either the number of troops or the current level of troop deployments world wide that it does today. I am not speaking of operational deployments but the majority of bases and stations in places like Germany, South Korea, Holland, Kosovo, Japan... The list goes on and on.

In addition I would think that the USN's deep water navy would be similarly scaled back especially the number of carrier groups.

So in my opinion the defence budget would be drastically reduced under normal circumstances. In the case of war, then funding would have to be reconsidered and even Rand did not rule out taxation as an option in that case.

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In addition I would think that the USN's deep water navy would be similarly scaled back especially the number of carrier groups.

So in my opinion the defence budget would be drastically reduced under normal circumstances. In the case of war, then funding would have to be reconsidered and even Rand did not rule out taxation as an option in that case.

If you mean the number of operational carrier groups, you may be right. A ship in mothballs is cheaper to maintain than an active one. That was done with some WWII-era battleships like the Iowa.

America needs a large blue water navy, particularly the aircraft carriers. No other nation comes close to matching it, for one thing, and it's the main instrument by which the US wields its power abroad. Maybe carriers can be mothballed, too. If not, then the numbers will remain rather high.

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If you mean the number of operational carrier groups, you may be right. A ship in mothballs is cheaper to maintain than an active one. That was done with some WWII-era battleships like the Iowa.

Absolutely. I'm not talking about tuning the USS George Washington into razorblades :)

America needs a large blue water navy, particularly the aircraft carriers. No other nation comes close to matching it, for one thing, and it's the main instrument by which the US wields its power abroad. Maybe carriers can be mothballed, too. If not, then the numbers will remain rather high.

What I am saying is that some of the US's tangible demonstrations of power abroad will necessarily have to be reduced. I'm not saying scrap the blue water navy, but rather reduce it.

Because this level of funding is probably not realistic...

For 2009, the base budget rose to US$515.4 billion, with a total of US$651.2 billion when emergency discretionary spending and supplemental spending are included.[1] This does not include many military-related items that are outside of the Defense Department budget, such as nuclear weapons research, maintenance and production (~$9.3 billion, which is in the Department of Energy budget), Veterans Affairs (~$33.2 billion) or the wars in Iraq and Afghanistan (which are largely funded through extra-budgetary supplements, ~$170 billion in 2007) - the United States government is currently spending at the rate of approximately $1 trillion per year for all defense-related purposes.

Emphasis mine...

Edited by Zip
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It seems that we all agree that voluntary funding is the preferable method of funding, the question being asked is would people do it. Well the best way to get people to do something is to make it easy.

So what you do is when someone gets a job you send them a form to fill out and sign which when signed automatically deducts a specific % from their pay to help fund the government. Or better yet you could even allow people to determine the percentage themselves.

I also do not have a problem with the Government charging a small portion of profit from the services it does provide as long as that profit went right back into the funding of the government.

Jake makes a really good point about what the Government "owns" right now. Here is another idea.

Once the national debt is paid and the infrastructure and land are sold the money left over is deposited into banks and invested into the market to provide for the future funding of the nation.

In order to keep the government "out of the market" investments in the market would be done blind, with all publicly traded national companies (American owned and operated) having an equal amount of $ invested by the government. Yes, some of the investments would fail but the market shows that there is ever more money being made and therefore such an investment would produce an overall return for the government equal to the % rise of the market itself.

I believe that if this were done properly then through interest and investments you might actually get to the point where the government was self funded through it's own impartial investment in the nation.

Another idea, would be that in order to run for public office a person would have to contribute to the funding of the nation. This might also help keep the free riders out of the government system and reduce the chance of some looter or moocher legislating themselves and their kind "benefits".

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Once the national debt is paid and the infrastructure and land are sold the money left over is deposited into banks and invested into the market to provide for the future funding of the nation.

In order to keep the government "out of the market" investments in the market would be done blind, with all publicly traded national companies (American owned and operated) having an equal amount of $ invested by the government. Yes, some of the investments would fail but the market shows that there is ever more money being made and therefore such an investment would produce an overall return for the government equal to the % rise of the market itself.

I believe that if this were done properly then through interest and investments you might actually get to the point where the government was self funded through it's own impartial investment in the nation.

Another idea, would be that in order to run for public office a person would have to contribute to the funding of the nation. This might also help keep the free riders out of the government system and reduce the chance of some looter or moocher legislating themselves and their kind "benefits".

I don't know about the market investment thing. I have considered it myself, but what it does do is have a form of government competition with the private sector. After all, they would be competing against normal investors for those shares. I am not so sure if that is a good idea, because it is still a form of government interference in the economy (however slight). Kind of like the little baby brother of today's investment in every bank ;)

One fun thing I saw mentioned the other day as a way of transitioning towards a better society as far as taxes go, is to allow people to decide where their tax dollars go towards. I think that would get rid of ridiculous programs (the ones small groups lobby for) real quickly, and it would furthermore get rid of (or severely downsize) programs people who pay very little taxes benefit from. Then, you can add a provision that says that any surplus a department gets has to be returned to the taxpayer, and that any budget cuts, so to speak, have to become permanent. So every year that people give less money to programs, they will end up getting smaller, unless there is consistent interest to maintain it by the people who actually share the burden of taxes.

At the same time you could reduce taxes every year because there will probably be a massive overflow (I can imagine that many people would support the actual functions of the government in favor of welfare stuff, because the people that pay for taxes generally do not benefit from that anyway).

I think it'd be somewhat more politically viable to do something like this than just getting rid of it altogether. You'd basically get a sort of pruning process that shrinks down the government depending on what people choose to fund. After all, it is your money, so why shouldn't you have some say over what it goes towards?

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I don't know about the market investment thing. I have considered it myself, but what it does do is have a form of government competition with the private sector. After all, they would be competing against normal investors for those shares. I am not so sure if that is a good idea, because it is still a form of government interference in the economy (however slight). Kind of like the little baby brother of today's investment in every bank ;)

I see your point but the involvement I had envisioned would be a silent partnership in which the government would not have any control or say in running the company in spite of it owning part of it through shares.

One fun thing I saw mentioned the other day as a way of transitioning towards a better society as far as taxes go, is to allow people to decide where their tax dollars go towards. I think that would get rid of ridiculous programs (the ones small groups lobby for) real quickly, and it would furthermore get rid of (or severely downsize) programs people who pay very little taxes benefit from. Then, you can add a provision that says that any surplus a department gets has to be returned to the taxpayer, and that any budget cuts, so to speak, have to become permanent. So every year that people give less money to programs, they will end up getting smaller, unless there is consistent interest to maintain it by the people who actually share the burden of taxes.

At the same time you could reduce taxes every year because there will probably be a massive overflow (I can imagine that many people would support the actual functions of the government in favor of welfare stuff, because the people that pay for taxes generally do not benefit from that anyway).

I think it'd be somewhat more politically viable to do something like this than just getting rid of it altogether. You'd basically get a sort of pruning process that shrinks down the government depending on what people choose to fund. After all, it is your money, so why shouldn't you have some say over what it goes towards?

Neat idea, but could you imagine the list you would have to sort through to determine where your money went? ;)

I would be worth it to me though.

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I see your point but the involvement I had envisioned would be a silent partnership in which the government would not have any control or say in running the company in spite of it owning part of it through shares.

That would still mean subsidizing those companies, by provoding them with capital that was intended for defence and police, by it's donors. It would lead to those companies getting involved in the campaigns of politicians in exchange for the same political favors we have today.

Plus, if someone intended to have their money risked on the stockmarket before put to use, they could do it themselves, and then send it in to the government-they could even set it up to go thre automatically, after a number of years. Having the gov. use their money for something they didn't intend would constitute fraud, which is force.

Of course it would also be counter-productive to have unqualified politicians playing the stockmarket, even if they were honest: this is btw. the practical (non-moral, but valid within the practical) argument most conservatives and libertarians make against big government today. It falls on deaf ears because it doesn't account for morality, but it still holds perfectly true: money(value) is better kept and multiplied by the people who produced it than by those who are spending it.

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Neat idea, but could you imagine the list you would have to sort through to determine where your money went?

Which would make it shink real fast, wouldn't it? Only thing things that people really care (military, police, courts) about would get funded and the others would very quickly lose all funding and be closed.

I also agree with the problems being raised as far as systems that allow corruption, favors, etc. I think the only way you'll eliminate that is to go with a federal government that gets revenue through fees for it's services and that's it. Consider criminals having to pay fines, court fees for filing suit, contract fees was another good sugestion. I also liked the diea of politicians paying a fee when elected. What about abolishing politician's receiving a salary altogether? I know they should be compensated for their work, but there has to be a better way to remove the "career politicians" and corruption that results.

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That would still mean subsidizing those companies, by provoding them with capital that was intended for defence and police, by it's donors.

I disagree. Yes the government would be investing in companies... each and every company in the market. The capital that they would be investing with as I said was the money left over from the sale of infrastructure and government land in the pairing down of government to it's proper functions. That money was not earmarked for police, military or courts, nor was it generated through taxation.

It would lead to those companies getting involved in the campaigns of politicians in exchange for the same political favors we have today.

Why? There would be no favour to be gained. An proper government could not do anything that it was not explicitly permitted to do by law. The program I'm talking about is completely blind, there would be no way to curry or impart favour.

Plus, if someone intended to have their money risked on the stockmarket before put to use, they could do it themselves, and then send it in to the government-they could even set it up to go thre automatically, after a number of years. Having the gov. use their money for something they didn't intend would constitute fraud, which is force.

Of course it would also be counter-productive to have unqualified politicians playing the stockmarket, even if they were honest: this is btw. the practical (non-moral, but valid within the practical) argument most conservatives and libertarians make against big government today. It falls on deaf ears because it doesn't account for morality, but it still holds perfectly true: money(value) is better kept and multiplied by the people who produced it than by those who are spending it.

Perhaps I wasn't clear. There would be no "playing" the market. The government would take a certain portion of the money derived from the sale of property and infrastructure (NOT TAXES) it currently owns and invest it across all American companies in the open market at the same rate. With this sort of blind investment the dividends from the government shares would become a source of revenue for funding police, military and courts.

As for your moral disagreement I would agree if the money I was talking about was taken through taxes but I have specifically said that this money is from the sale of currently owned land and infrastructure. Unless you are contemplating a retroactive reimbursement of taxes. If that is the case how far back do you go? What if there's money left over even then?

I don't think retroactive payments would be sensible. Even if the idea of the government involvement in the market isn't adopted, having all that money in the bank generating interest would be a more valuable (to the nation and it's people) stable funding alternative to a purely voluntary system.

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To Zip: Agreed, I misunderstood you. Under those limitations (money left over from the sale of public property, invested evenly and left alone until it's time to spend it), your plan is the proper course of action. (since it would likely be better than the alternative: buying gold which would be kept in a safe somewhere)

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To Zip: Agreed, I misunderstood you. Under those limitations (money left over from the sale of public property, invested evenly and left alone until it's time to spend it), your plan is the proper course of action. (since it would likely be better than the alternative: buying gold which would be kept in a safe somewhere)

Mark this day on your calendar ;) ;)

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I see your point but the involvement I had envisioned would be a silent partnership in which the government would not have any control or say in running the company in spite of it owning part of it through shares.
The government will have to keep some wealth aside in order to smooth out funding. Any such investment has some impact on someone: even if it is in gold. So, I think a blind-trust type of set-up can work if it has the right checks to see that it is indeed blind and to ensure that it does not grow beyond a certain size.

There is also a downside with smoothing over volatility in funding: the government becomes less dependent on those funding it. This is fine if one is tackling short-term volatility, but not good if the government ends up with enough funds to run (say) for 10 years without recourse to citizens' contributions. This is another reason to have a limit on the amount of wealth the government can retain in this way.

In order to create an element of longer-term security of funding, while also keeping the government dependent on citizens, I would think a legal structure like a private endowment would be a better approach. That way, investments are managed by private custodians on behalf of private contributors (and people who left money as part of their wills), and the trustees can also have discretion as to when they should or should not send some money to the government -- with each endowment having whatever rules they want. Private endowments can also have specific purposes: imagine an endowment that does not contribute at all in times of peace, but simply keeps re-investing its trust fund. Then, if war is declared, the trustees are allowed to fund the government within certain parameters.

[science-fiction alert for much of the above.]

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*** Mod's note: Merged with an existing thread. - sN ***

Correct me if I am wrong, but it is my understanding that Rand opposed “involuntary” taxation as an initiation of physical force, but I know for a fact that she mistrusted contemporary libertarians because she suspected them of being anarchists. Objectivism presumes the necessity of an armed state with the power to check aggression and defend rights, yet Rand’s proscription of involuntary taxation begs the question of how an actual Objectivist state would pay for itself. I’d like to hear some ideas on this.

Georgism in Hong Kong has allowed for an enormously free economy that does not tax exchange or production, merely the occupation of territory. It seems to me that, while perhaps not involuntary, such a tax does not directly interfere with the actual carrying out of non-agricultural market transactions.

I suppose that an Objectivist state could constitute nothing more than a militia, with the government paid for by the labor of citizen-soldiers defending their rights. I must say that I cannot see such a militia being able to seriously defend against invasion; the quasi-state in Gaza fares poorly against the Israeli state apparatus.

Thoughts? Denunciations?

Edited by softwareNerd
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Yet "Government Financing in a Free Society" (ch. 15 of VOS) discusses the question. Are you familiar with it?

I'm not, I'll pick up a copy. I've browsed this thread, and while I now have a clearer idea of what an Objectivist state theoretically looks like, I have concerns about its viability, particularly the notion that "voluntary taxation" could support and sustain an Objectivist state. Government is expensive. It costs a lot of money to catch bad guys and to keep them locked up. It costs even more to maintain an army able to beat back invading foreigners.

I can imagine a scenario in which private charity would be unable to pay for police and soldiers, leading to state failure and with it, lost freedom. Conversely, the state could easily come to rely upon the charity of a small number of extraordinarily wealthy private interests; a collusive relationship between business and government that trades wealth for influence would degenerate the Objectivist state into a fascistic, social democratic tyranny.

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I have concerns about its viability, particularly the notion that "voluntary taxation" could support and sustain an Objectivist state. Government is expensive.
I suggest reading that essay. The main point is that talk of an Objectivism-compatible government presupposes a significant philosophical change in the citizenry, so that you can't magically abolish taxation and leave the culture of irrationality and entitlement in place. A rational man would realize that it is in his best interest to pay for protection against force -- which BTW does not include the altruistic war in Iraq or the war against drugs (to name a couple major money-wasters). Proper government is vastly less expensive than improper government.
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I'm not, I'll pick up a copy. I've browsed this thread, and while I now have a clearer idea of what an Objectivist state theoretically looks like, I have concerns about its viability, particularly the notion that "voluntary taxation" could support and sustain an Objectivist state. Government is expensive. It costs a lot of money to catch bad guys and to keep them locked up. It costs even more to maintain an army able to beat back invading foreigners.

Cato, eliminate all the stuff that government currently has it's fingers in and government becomes much, much cheaper.

I can imagine a scenario in which private charity would be unable to pay for police and soldiers, leading to state failure and with it, lost freedom. Conversely, the state could easily come to rely upon the charity of a small number of extraordinarily wealthy private interests; a collusive relationship between business and government that trades wealth for influence would degenerate the Objectivist state into a fascistic, social democratic tyranny.

Would you pay(donate) to ensure your continued freedom, and the continued existence of a Laissez Faire Capitalist State?

I would, who wouldn't? Don't forget, the difference here is a principal I think of as conscious citizenship.

Instead of everyone "knowing" that the government takes their money (by force) to provide for everything from Soldiers to standards for industrial potato peelers, leading to them going about their lives as unconscious citizens, not giving a thought to providing for the welfare of the nation.

In a LFC state everyone will know that the state exists only as long as they support it, as they voluntarily pay for their own defense, police and courts, that is conscious citizenship, and that is worth paying for.

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I suggest reading that essay. The main point is that talk of an Objectivism-compatible government presupposes a significant philosophical change in the citizenry, so that you can't magically abolish taxation and leave the culture of irrationality and entitlement in place. A rational man would realize that it is in his best interest to pay for protection against force -- which BTW does not include the altruistic war in Iraq or the war against drugs (to name a couple major money-wasters). Proper government is vastly less expensive than improper government.

It's a tough one, one that Rand did not have fully thought out (and admits as much). A rational man might well anticipate that his fellow citizens will pay enough for gov't and that his share is vanishingly insignificant to the overall budget. A rational man might, on the other hand, "hope" that by participating in funding the government, others will do the same. Another rational man might expect (and, indeed, find) that, by virtue of his extravagantly generous donation, he is owed a greater amount of consideration by the government in, say, a litigious conflict, than his scoff-tax neighbor, who paid zilch. Clearly there is an inherent instability in the concept of voluntary taxation.

The idea of voluntary taxation is, in my opinion, equivalent to the idea of voluntary obedience to objective laws. A just society must have just, equitable, objective laws that everyone who lives in that society must follow. Similarly, that just society must have a just, equitable, objective standard of determining what each person owes in return for the good the government provides. Fees can play a significant part in that scheme, but taxation for common-good services (e.g., defense) is almost certainly necessary.

Just as a member of an Objectivist society can not pick and choose which laws he complies with, based on his personal moral code, so such a member can not hope to choose how much of his productive effort he provides to support the governance of those laws.

The idea of imposing a "significant philosophical change in the citizenry" is anathema to the principles of Objectivism, n'est pas? (Unless you intend citizenship to be a purely individual choice, which would mean a significant departure from traditional, geographic/cultural citizenship. ---and, in which case, the choice to abide by Objectivist laws can just as well apply to abiding by objective taxation/fee schedules.)

edit: If citizenship required paying taxes and fees for government support, and failure to pay resulted in loss of citizenship (i.e., expulsion) would that necessarily constitute force?

Edited by agrippa1
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I don't know why people are even debating weather enough people would want to fund a government voluntarily.

Only anarchists want anarchy.

A rational man might well anticipate that his fellow citizens will pay enough for gov't and that his share is vanishingly insignificant to the overall budget.

A rational man would think of himself as a meaningless in the face of collective effort?

A rational man might, on the other hand, "hope" that by participating in funding the government, others will do the same.

A rational man would want to 'depend' on peer pressure to have his rights protected?

Another rational man might expect (and, indeed, find) that, by virtue of his extravagantly generous donation, he is owed a greater amount of consideration by the government in, say, a litigious conflict, than his scoff-tax neighbor, who paid zilch. Clearly there is an inherent instability in the concept of voluntary taxation.

A rational man would want to buy injustice?

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