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Taxes: Government Financing In A Free Society

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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

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?

Only if you believe that people should have the right to property. But since you don't seem to have a problem with the idea of taking away soemone's property by force, expulsion shouldn't be an issue either.

Just don't be ridiculous, and think that someone can be moved against his will from let's say Topeka, Kansas all the way to Mexico, Canada, or across one of the oceans, all without the use of force. That would be against the laws of physics.

Yes, both taxation and expulsion are initiation of force, and Ayn Rand was explicitely against them. You started out with a dubious claim about Ayn Rand admitting to not thinking something through, and you twisted and rationalized, until you have found a supposed justification for things she was very explicitely against.

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

No! -- You're synonymizing "his share" with "himself" and "vanishingly insignificant" with "meaningless." Your first statement, about "enough people" wanting to fund government backs up what I said. Which is not that a rational person would think himself meaningless.

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

Here, you even use 'quotes' to imply that I used a word I didn't. I said "hope," and yes, that's the basis of giving what you think is a fair share towards government. If he gave $1000 for defense, would he be confident that $1000 would provide him with meaningful defense, or would he "hope" that others would give a similar amount so to fund collectively a defense capable of protecting them all?

A rational man would want to buy injustice?

Of course not, he'd want to buy "justice." Objective courts are integral to an Objectivist society for precisely the reason that objective individuals differ in their evaluation of justice. If Objectivists' view of justice were invariant, there would be no need for courts, police or laws.

You nipped around the edges of my argument, but failed to address my main point, that an Objective tax code is compatible with an Objective code of laws.

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Irrational people voluntarily surrender 10% of their income, or more, to irrational institutions, out of a needless sense of guilt, out of a desire to help, out of any number of reasons (rational or irrational).

I believe that suggests strongly that rational people would, therefore, voluntarily surrender whatever it took to protect their own liberties, so long as an Objectivist Government provided the services its supposed to, didn't do what it wasn't supposed to, and provided proper accounting to prove it.

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You started out with a dubious claim about Ayn Rand admitting to not thinking something through, and you twisted and rationalized...

I wrote that she did not have it fully thought out, not that she did "not think it through." The latter implies shallowness of intellect, which was not what I intended.

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.

...

This particular "plan" is mentioned here only as an illustration of a possible method of approach to the problem- not as a definitive answer nor as a program to advocate at present. The legal and technical difficulties involved are enormous...

- Ayn Rand, Government Financing in a Free Society, 1964

Clearly, Rand was working towards an implementation of her asserted principle, and had not fully thought it through to a demonstrably viable concrete implementation.

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.

-ibid

This statement implies that the nature of a fully free society can not be fully determined until it comes into (or close to) existence. Which consequently leaves open the possibility that a perfectly voluntary method may not be attainable, even in an otherwise fully free society.

The notion of voluntary government financing is an Objectivist ideal, and its potential efficacy a theory of governmental philosophy. That theory is contradicted, at a very abstract level, but the Objectivist tenet that only government may be trusted with the wielding of (retaliatory) force in the enforcement of laws. A governmental monopoly on law enforcement necessarily entails the use of force against those individuals whose moral code does not exactly match that set down in an objective body of law. The "retaliatory" nature of that force is based on the law, not necessarily that individual's morality. (As an example, a person who makes claims as the properties of a product, which claims are found to be false by a court, and thus representing fraud, thus the initiation of force.)

Similarly, a person who does not feel compelled to pay the government for a service provided to his benefit, may be judged to have taken the implied benefit of an implied governmental contract, without providing compensatory reimbursement for that service.

I'm not necessarily advocating that tack, just asserting the possibility that voluntary funding may not be possible, but that a morally grounded code of taxation might be.

Edited by agrippa1
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Hmm, I'm not sure if this has been mentioned before, (Sorry, don't have time to read the whole thread), but I just got done listening to an interview with Ayn Rand (Titled on ARI's website as "Politics in a Free Society") where the issue of taxation came up. She mentioned (Albeit very tentatively) a sort of "insurance tax," where, if you wanted to use a service of the government, you would first pay a sort of insurance premium in the possible event that you would need to use government services.

She was talking specifically about courts upholding the fidelity of contracts, where you could choose to opt out of paying the tax, but then you would not be able to take your partner to court were he to violate the contract. I could see a few situations where this might cause problems -- for instance, criminal justice. But perhaps, along with voluntary contributions, it could work.

What do you guys think?

Oh, and if you want to listen to what she said yourself, just register at ARI's website, go to the "Ayn Rand Multimedia Directory," and choose the interview mentioned above. It's the last question she answers in the interview.

(If this is redundant, I apologize, a mod can go ahead and simply delete it if they wish).

Edited by Sarrisan
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I wrote that she did not have it fully thought out, not that she did "not think it through." The latter implies shallowness of intellect, which was not what I intended.

The latter implies the former. Through means all the way, which means fully. B)

This statement implies that the nature of a fully free society can not be fully determined until it comes into (or close to) existence. Which consequently leaves open the possibility that a perfectly voluntary method may not be attainable, even in an otherwise fully free society.

You quote her as saying: "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."

Then you contradict her by saying: "Which consequently leaves open the possibility that a perfectly voluntary method may not be attainable, even in an otherwise fully free society."

The question of implementing the principle of voluntary government financing leaves open the possibility to implement it on a not voluntary basis?

.....

I'm not necessarily advocating that tack, just asserting the possibility that voluntary funding may not be possible, but that a morally grounded code of taxation might be.

Grounded in who's morality? Ayn Rand's morality is pretty clear on that, and fully, entirely, completely, tought through, all the way and indeed to the last detail:

What is the basic, the essential, the crucial principle that differentiates freedom from slavery? It is the principle of voluntary action versus physical coercion or compulsion.

Freedom, in a political context, has only one meaning: the absence of physical coercion.

A “right” is a moral principle defining and sanctioning a man’s freedom of action in a social context.

(quotes are from the free Ayn Rand Lexicon, which in turn quotes Capitalism: an Unknowm Ideal, and VoS.)

You nipped around the edges of my argument, but failed to address my main point, that an Objective tax code is compatible with an Objective code of laws.

If by objective (no need to capitalize) you mean that it applies to everyone equally(which is what it means), then no, a law that allows for forced taxation is not objective: person A has power over some of person B's property. Person B therefor does not have the same property rights as person A.

Edited by Jake_Ellison
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Response to Sarrisan:

As I remeber, that hypothetical tax was voluntary, and it only referred to one specific service of the government: the enforcement of contracts. And I agree that such a tax would be fine, if it is necessary.

As far as all the other services, defence, law-enforcement, justice, I have plenty of arguments to suggest that voluntary contributions would be enough to allow the government to protect everyone's rights.

For one, history is full of institutions which lead a lavish existence supported by nothing but such contributions: their purpose is to further fields such as arts, religion, charity, sciences. That's proof enough that applying the game theory according to which everyone would just expect others to contribute, to his unearned profit, doesn't hold up.

Another: in better times (philosophically), this country saw young men sign up by the millions to defend freedom and the homeland, in WW1 for instance they put their lives up against the odds. Surely, if the culture of this society will one day allow for a moral political system, it will allow for its citizens to show half the conviction and sense of justice those young men showed, and pay for what the government needs to protect those same ideals.

It astounds me that despite all the evidence to the contrary, some people(not you Sarrisan) look at the human race with such malice that they assert that a society, even at its best (as an Objectivist society would have to be) , would refuse to pay for the good, and instead live with the evil.

And, of course, therefor needs the good forced upon them, which is the starting point for all arguments tyrants make.

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

I realize I'm responding to a first-page reply, and I acknowledge I've yet to read the 6 pages of posts. But I will do so.

I've given the GET RID OF TAX situation a great deal of thought, and just recently considered how best to raise funds voluntarily in order to achieve a particular purpose.

First of all, bear in mind that the TWO best ways to voluntarily fund proper government services are Lotteries and Contract Insurance (LACI for short.) Lotteries are an easy way to raise money, especially if those playing the games know going in that half of the money they spend is going straight to fund proper government services. Contract Insurance would enable there to be plenty of funds to pay for the court system (and I think by extension the police force and jails, etc.)

So, if there is a spate of litigation, there would be commensurate monies to pay for the use of courtroom and court-related services.

The situation of having a need to ask for money for a specific project would in my view simply require asking for the money for that project. I would advocate special project lottery, for one, as well as something like a Bond Issue for another. Basically - what is the project? If it is something like "We are being threatened by Japan," for example, then people would have to be told the nature of the threat, and given some ballpark figure for how much money is needed to counter the attack, as well as some details on how the government plans to spend the budget. If the project is one that people perceive as a rational objectively sound project - one that is, in their individual judgments, is worthy of their money, time and other resources - then they will do what they can to contribute.

How about "Climate Change?" That's a project and a half, and governments today in Canada and US, along with others around the world, are busy throwing mega-bucks at something they actually cannot change. It is like trying to prevent a solar eclipse (or cause one.) While some may be taken in by the outlandish claims, as long as the government cannot force you to contribute to a hare-brained scheme, there is protection individually against wholesale investment in ludicrous undoable projects.

Bottom line: if the government cannot convince enough people to fund a project because they cannot proffer enough objective evidence, then the project must go unfunded.

(Apologies if this has already been said. I'll go look back at the previous 6-7 pages now.)

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The latter implies the former. Through means all the way, which means fully. :D

"Implies?" No, you inferred the former from the latter, incorrectly. There's denotation and connotation. Uncompleted = half-baked by denotation, but not by connotation. Anyway, are you now claiming, in light of her own words, that she did in fact think voluntary taxation "all the way through?" (Remind me not to hire you as an engineer :huh:)

You quote her as saying: "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."

Then you contradict her by saying: "Which consequently leaves open the possibility that a perfectly voluntary method may not be attainable, even in an otherwise fully free society."

The question of implementing the principle of voluntary government financing leaves open the possibility to implement it on a not voluntary basis?

Perhaps then I should have questioned whether a fully free society is, in fact, possible. Since a society is made up of not just government, but individuals, perhaps "fully-free" presupposes that all members of that society are Objectivist, and would therefore voluntarily donate to government. How would you implement such a society, given the reality of non-Objectivist tendencies in most, if not all, people. By oath, a la Galt's Gulch? No, because if someone refused to take that oath, what recourse would you have, that would not constitute force? So, in fact, perhaps "fully free" is an ideal unattainable by normal human standards, and therefore voluntary taxation represents "the final step" to an unattainable ideal...

Maybe she did think it all the way through...

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a morally grounded code of taxation

There is no such thing. Taxation by definition is a method of funding that operates by means of the initiation of force.

If you would like to discuss a rational and moral method of funding government services, then there is neither room nor reason to invoke the method of taxation.

The COSTS of proper government services can and must be paid by voluntary methods. In fact, it is the only civilized option.

Taxation may have been around a long time but that doesn't mean it's the right way to get the job done.

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... Since a society is made up of not just government, but individuals, perhaps "fully-free" presupposes that all members of that society are Objectivist, and would therefore voluntarily donate to government. How would you implement such a society, given the reality of non-Objectivist tendencies in most, if not all, people. By oath, a la Galt's Gulch? No, because if someone refused to take that oath, what recourse would you have, that would not constitute force? So, in fact, perhaps "fully free" is an ideal unattainable by normal human standards, and therefore voluntary taxation represents "the final step" to an unattainable ideal...

Maybe she did think it all the way through...

For starters, stop thinking in terms of "donating" to government. Think instead of ways that government can offer "value for value."

Why do people play Lotteries? Because they hope to win a big prize. The value of spending a dollar or two or 5 is well worth it to a lot of people.

Now, how about Contract Insurance? What one is buying in essence is "peace of mind." The value is in knowing that one would have the wherewithal to sue in the event of breach of contract, and/or to have the means to defend oneself were one sued by another party to the contract in question. In fact, I am convinced this method of funding would produce more funds than can be visualized at present, simply because left to their own devices, people would tend to want to create their own safety net, especially when its cost is so much cheaper than the current tax system. Think first of the large corporations, the ones that enter into mega-million dollar joint ventures, and the legion of documentation on which they would no doubt elect as a matter of course to buy contract insurance. Most of those agreements/joint ventures proceed without a hitch. Then think of the many arenas of an individual's life for which one could want to buy an insurance policy - marriage, for one. It's a contract, too. Buying marriage insurance could be a way to provide for funds in the event of a breakup while children are young.

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

I don't know that a refund would be appropriate. Rather, what WOULD be appropriate is producing a balance sheet.

Hoard the surplus? Sure, why not? I think a proper government would want to have a savings account, putting money away so that there is enough to pay for defense against attack by foreign armies, which I think an Objectivist government would definitely need to plan and save for. Eventually someone is going to be pissed off when the first True Civilization is born and shows them all how it's done.

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She was talking specifically about courts upholding the fidelity of contracts, where you could choose to opt out of paying the tax, but then you would not be able to take your partner to court were he to violate the contract. I could see a few situations where this might cause problems -- for instance, criminal justice. But perhaps, along with voluntary contributions, it could work.

This is Contract Insurance, not Tax. And the way I see it, buying Contract Insurance means buying some level of protection in the form of a certain amount of money to pay towards launching a lawsuit. Not buying the insurance would not translate into prohibition from litigating but rather the cost of doing so would have to be borne fully by the person bringing the suit. I could see many levels of insurance being developed. For example, large companies may be able to negotiate policies that would cover general litigation costs, with special extra insurance being purchased for elements of the transaction, etc.

* * *

I've now read the preceding pages, and I want to address one issue that jumped out in particular. It's the idea that government taking ANY part in the economy somehow constitutes interference. I disagree with that idea. Government lotteries would be for the purpose of funding basic government services, and would be in competition with lotteries run by medical research, space exploration, local police, federal armed forces, just to name a few. Once people begin to understand how important it is to HAVE contract insurance, I think the problem of not enough money will soon be eclipsed by the problem of how to invest the surplus.

In addition, government hiring a private investment portfolio manager to oversee investment of its surplus is not necessarily interference. It is just one more investor in the market. It is ONLY when government abuses its power to make laws that it begins to interfere. It is only when it begins dictating to those makers of potato peelers and growers of wheat how & when to go about their business that it becomes a health hazard.

I really think the key to winning over more people is to have them understand that government should offer value for value, and that it's not about catching a free ride, or preventing others from allegedly catching a free ride. It's really about one's own level of safety and peace of mind.

What tax has done is rob most people of the means to provide their own safety nets, while at the same time doing a really shoddy job of providing that safety net in their stead (which btw and don't forget was the very purpose for which it SAID the vast sums were being expropriated.)

Asking people to buy a lottery ticket, or to look out for their own interests with contract insurance means changing the way we view government. It should not be an adversary or a pitiful beggar, pleading for scraps. Government - good government conducted on sound principles - is vital to secure peace and enable individuals to achieve prosperity.

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For starters, stop thinking in terms of "donating" to government. Think instead of ways that government can offer "value for value."

Why do people play Lotteries? Because they hope to win a big prize. The value of spending a dollar or two or 5 is well worth it to a lot of people.

Now, how about Contract Insurance? What one is buying in essence is "peace of mind." The value is in knowing that one would have the wherewithal to sue in the event of breach of contract, and/or to have the means to defend oneself were one sued by another party to the contract in question. In fact, I am convinced this method of funding would produce more funds than can be visualized at present, simply because left to their own devices, people would tend to want to create their own safety net, especially when its cost is so much cheaper than the current tax system. Think first of the large corporations, the ones that enter into mega-million dollar joint ventures, and the legion of documentation on which they would no doubt elect as a matter of course to buy contract insurance. Most of those agreements/joint ventures proceed without a hitch. Then think of the many arenas of an individual's life for which one could want to buy an insurance policy - marriage, for one. It's a contract, too. Buying marriage insurance could be a way to provide for funds in the event of a breakup while children are young.

Thanks, you've helped reveal the contradiction here.

I assert that the only means of voluntary funding is the explicit exchange of value for value. This is true for the market and it is true for the government (so my assertion goes). The problem with government funding is with those services whose value can not be objectively determined (because values are different for every individual), but which nevertheless benefit all individuals. The free market price mechanism does not measure the value of an item, it simply measures the point at which the number of items desired at or above a certain price point equals the number of items willingly offered at or below that same price point. Those who would pay more benefit, as do those who would ask less, from the equilibrium price. The reason I point this obvious fact out is that those who are willing to pay more than the equilibrium price do not; they pay exactly the market price, i.e., the lowest price at which they can receive the good purchased. This is a fundamental principle of capitalist economics and it flies directly in the face of the concept of voluntary government funding.

The problem with insurance fees of any kind is twofold: First, it assumes that the government is capable of providing the most efficient service in any given example, otherwise the efficacy would depend on the government preventing, by force (i.e., law), any other entity from providing that service. Second, those services provided for the "common good" (the most obvious, and perhaps only, example being national defense) must be covered by profits from the sale of other "value for value" services, such as insurance, courts, etc. This requires that the price charged for these services must be higher than what an equally efficient private provider could charge, so the first assumption above is necessarily invalid (barring some change in typical gov't efficiency).

So, unless you entail force in the selling of insurance and other services, you can't fully fund all of gov't's requirements. Since you can't initiate force, that means you must rely on the donations voluntary contributions of the citizenry for the funding of a fully free government.

Now, perhaps you will find that enough recipients of government services value those services higher than the cost of their share of those services, and are willing to contribute a corresponding amount, but perhaps you won't. Perhaps you will find that is the case one year, but not the next. Or with one party (or preferably, person) in control of the government but not with another. (not sure that last point is valid in a "fully free" society, but you get the point).

The problem for "common good" services is that, unless enough other people also contribute to the service, your contribution will fall far short of the amount necessary to return to you a commensurate value. You are left to hope that enough others also value that service as much or greater than you do. Necessarily, there will be some who receive more value than they contribute, and some who receive less value. Those who receive less value than they contribute will be obligated by selfishness, to reduce their contributions the following year to the value received, thus reducing the total contribution and adding to their own number. Only in a case where the ratio of value to price is so great that all contributors receive greater value than their contributions, can the system be stable. Unless someone can show that to be true in a viable, stable scenario, the successful implementation is an open question, and is rightfully confined to the sphere of theoretical political philosophy.

The fundamental problem here is that the philosophy of law, from an Objectivist standpoint, covers what a government can, should, must or cannot do, not what the citizenry must or should do, outside of the codified definition of "initiation of force." You cannot plan a fully free society and include in that planning the required will and actions of the citizenry, whether as a whole or as individuals.

on edit:

The "out" for an Objectivist, "fully-free" society, is to not depend on voluntary funding, but on consensual funding, that is funding obligated, by consent, from each citizen in return for citizenship in that society (and benefit from the services of that government). This is a contractual payment agreement, rather than a "voluntary" (in the sense of being voluntary each time it is given). Objectivist philosophy does not eschew consensual contracts between citizenry and government, it is, in fact the basis of the Objectivist principle that laws, enforcement, justice and defense are properly provided by the government. It is what separates us from the anarchists. (not the only thing)

Edited by agrippa1
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First of all, bear in mind that the TWO best ways to voluntarily fund proper government services are Lotteries and Contract Insurance (LACI for short.)
These are actually of questionable propriety. A basic principle is that the government should not compete with private businesses, e.g. it should not sell milk, shoes, real estate etc. Lotteries are a legitimate business. Second, it would not be proper to fund government in general via a specific governmental service, shifting the burden of paying for police protection to businesses, just because businesses write a lot of contracts. Contract insurance should cover the cost of contract enforcement, not the cost of contract enforcement plus everything else the government does. The government should not refuse to protect the rights of parties to a contract if they have not subsidized general police protection -- they are separate matters. Susidizing government through a contract tariff would be essentially the same as refusing to protect an individual's rights if they have not voluntarily made a donation to the state.
How about "Climate Change?"
Which is not anything the government should be involved in, at all.

Except for actual-cost payments for enforcement, I think that the only moral method of financing government is contributions.

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The problem with government funding is with those services whose value can not be objectively determined (because values are different for every individual), but which nevertheless benefit all individuals.

Can you give an example or two of the kind of services you mean here?

The problem with insurance fees of any kind is twofold: First, it assumes that the government is capable of providing the most efficient service in any given example, otherwise the efficacy would depend on the government preventing, by force (i.e., law), any other entity from providing that service.

In the case of providing court services, settling disputes - there are at present privately-owned & run arbitration / dispute resolution companies. The point about insurance is that the rates are arrived at based on a number of factors - actuarial tables for one, your own use of your insurance company for two.

Whether we are talking about making a government insurance company profitable or working out how to apportion premiums taken in for contracts (or for the annual fee) which sums are not used to pay for court-related services, should be a lot easier in a political climate committed to rational principles.

Second, those services provided for the "common good" (the most obvious, and perhaps only, example being national defense) must be covered by profits from the sale of other "value for value" services, such as insurance, courts, etc.

Must they be covered in total by such profits? I do not think so. In part, they could and should be, but there must come a point where the best method is a straightforward request for contributions of all kinds in respect of a particular event or situation.

Given the very high level of free-riding going on at the moment, which free-riding extends in my view to the thousands of pointless government jobs that exist for the sole purpose of interfering in business, being concerned with whether or not someone manages to go through life without once buying a lottery ticket or an insurance policy is really overdoing and belaboring the point.

Here's another thing to consider. No matter how much money there is, people can always think of what they'd do if only they had X amount more.

One of the bonuses that I see with Contract Insurance is that when the number of civil, family, estates, etc cases increases, the money will be there to help pay for the extra staff needed to deal with the extra workload.

We're just starting to think up ways to get the job done of paying for PROPER government services through voluntary methods. The sooner we actually get started convincing people that this is the right direction to go in, i.e., the right principle on which to base a system, the faster we will actually get to the point of being there.

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Perhaps then I should have questioned whether a fully free society is, in fact, possible. Since a society is made up of not just government, but individuals, perhaps "fully-free" presupposes that all members of that society are Objectivist, and would therefore voluntarily donate to government. How would you implement such a society, given the reality of non-Objectivist tendencies in most, if not all, people. By oath, a la Galt's Gulch? No, because if someone refused to take that oath, what recourse would you have, that would not constitute force? So, in fact, perhaps "fully free" is an ideal unattainable by normal human standards, and therefore voluntary taxation represents "the final step" to an unattainable ideal...

Maybe she did think it all the way through...

No. All that's needed for a society to be fully free is laws that limit the government to its proper functions (as described by Ayn Rand) and sufficient (voluntary) funding.

I believe you aren't doubting that such a system of laws can exist. It obviously does, we know all the principles it should be based on. So you're only doubt is regarding the idea that there will be sufficient funding. That, in the end, comes down to interpreting history. I believe there's plenty of evidence in history to suggest that people would indeed contribute sufficiently.

Edited by Jake_Ellison
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No. All that's needed for a society to be fully free is laws that limit the government to its proper functions (as described by Ayn Rand) and sufficient (voluntary) funding.

I believe you aren't doubting that such a system of laws can exist. It obviously does, we know all the principles it should be based on. So you're only doubt is regarding the idea that there will be sufficient funding. That, in the end, comes down to interpreting history. I believe there's plenty of evidence in history to suggest that people would indeed contribute sufficiently.

Are you saying that the system of laws has been implemented? Or that it exists as a proposed system?

Also, what evidence can you point to? I don't know off hand of any system of government that existed on voluntary contributions.

------

On further thought, a conditional request for contribution might work. This would be a budget provided to each individual for consideration. The individual would give what he thought was appropriate for the value received, and only if the budget goal was reached by total contributions would he send his check in to the government. This would guarantee that a person received value for value, and would provide incentive for contributions as the total pledged neared the goal amount. Over-contribution would result in down-scaling each person's contribution proportionately (or some other mechanism)

This scheme would be self-stabilizing as it would guarantee value back exceeding value given (subject to the person's ability to judge the value of the proposed budget item),and it would incentivize legislators to propose only services whose value exceeded costs, on a societal and individual level.

This concept could be tried as a pilot, even under our current system, and expanded. If so, the extent of its adoption would serve as a measure of the freedom of a society.

Edited by agrippa1
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Also, what evidence can you point to? I don't know off hand of any system of government that existed on voluntary contributions.

The United States government exists solely due to the voluntary contributions of the men who defeated the British occupation and established it. It also has been defended plenty of times, with millions volunteering to fight for it.

Given that today the US is a far greater nation, with far weaker adversaries, what makes you think that a similar contribution wouldn't be made? (Not by American society as it is today, but by an American society that is able to accept and appreciate a Capitalist political system)

As for the laws upon which this society would be based, I can't just list them here, to prove that they could exist. Ayn Rand described the basic principles upon which a Capitalist state ought to be established, but the concretes depend on the circumstances to which those principles will apply.

Do you have any specific objections, have you discovered specific contradictions in her political system?

Why do you say such a system cannot exist, other than that it's never been put into practice?

The individual would give what he thought was appropriate for the value received, and only if the budget goal was reached by total contributions would he send his check in to the government. This would guarantee that a person received value for value, and would provide incentive for contributions...

Where would that incentive come from? If the service you are suggesting is law-enforcement, then the government has to enforce the law on everyone.

Or are you saying that it doesn't?

If you are, what would then this non-contributing person's options be, in case something is stolen from him, by someone who is paying his fees? Pay the taxes or be attacked, right, since if he tries to bring the attacker to justice himself, he comes in conflict with the government, which has a monopoly on retributive force? That's more than indifference on the part of the government, it is extorsion: pay ypur taxes or you will actively be denied justice and as a consequence your rights.

Or, if the person is allowed to seek his own justice, that's anarchy. Cheaper governments would step up and compete for the business of protection for cash.

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Part of the problem some of you are having with the idea of where the funds will come from, stems perhaps from an inability to visualize how much extra money people will generally have at their disposal in a taxless society. In our world at present, a great deal of the cost of each & every item we buy at the retail level is bloated with tax. Since most manufactured goods involve many different sources of raw & semi-processed materials, the tax drain is more staggering than most people seem willing to acknowledge. That the government, after having stolen so much money from the people for so long, is STILL in debt, even worse debt than before, should be the biggest indictment of all of the not for profit, thieving mentality.

Cigarettes and booze are well known commodities that are heavily taxed, where the actual product if not so overly taxed, would likely cost about 25 cents, instead of 50 dollars. On a sliding scale from that are all the other products. In total, no matter how much you think the taxes are, they're more. Much much more.

Therefore, at the outset, when just one or two taxes are abolished, people will at once begin to have more money at their disposal. As more and more taxes are removed, the real net value of paycheques will increase. The amount people actually have to spend to provide themselves with both necessities and luxury items will STILL provide most people with growing savings. And this will be so even with the fact that people will have to spend some time and money on making decisions that were previously left to the government to make for them. Actually, it may well be because of having to spend time on such decision-making that people will find their savings growing. There just won't be enough time in the day to spend all of one's earnings.

Therefore, putting a request to a population generally possessed of savings accounts that have accrued easily, will be much more likely to find willing subscribers to a new lottery, or buyers of bonds designed to amortize the costs of a given project or undertaking over 10, 15, 20 or more years.

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Therefore, putting a request to a population generally possessed of savings accounts that have accrued easily, will be much more likely to find willing subscribers to a new lottery, or buyers of bonds designed to amortize the costs of a given project or undertaking over 10, 15, 20 or more years.

Again, the lottery idea is flawed because it implies the use of force, and bonds are money borrowed by the government - to be repaid, how?

I take Jake Ellison's point about the history of volunteerism in the United States. However, applying the example of military volunteerism to voluntary funding of the government has two weak points that I see: First, it ignores that most military volunteers are young, and presumably still idealistic, with not much to lose, while the wealthy are overwhelmingly older citizens with diminishing earning potential, and so are averse to unnecessary spending. Second, wars are periods of intense fear and risk, and instill in all a feeling that drastic action must be taken. Year to year running of a free society does not entail the same level of urgency. One risk that results from this recognition is that government might find the need to create urgent conditions in order to extract the desired amount of contributions from the citizenry. (Sound familiar?)

Where would that incentive come from? If the service you are suggesting is law-enforcement, then the government has to enforce the law on everyone.

I would restate that to say "the government has to protect everyone from the initiation of force." The value given is protection to citizens, the means to that end is law-enforcement on criminals. If your contribution is only accepted when the total of all contributions meets the requirements for an effective law enforcement service, then you are assured an expected value for your contributed value, that is, both you and your fellow citizens realize a profit from the transaction. I believe that's an important principle of voluntary funding: The value realized by your fellow citizens from individual contributions must be greater (in aggregate or on average) than the value they give up to include the individual in the service, and the value you realize from the service must be greater than the value of your contribution.

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Again, the lottery idea is flawed because it implies the use of force, and bonds are money borrowed by the government - to be repaid, how?

How on earth does the idea of lotteries imply the use of force? Please show the path you took to arrive at this conclusion.

Obviously if you reject lotteries as a valid method of raising VOLUNTARY funding (since nobody is forced or would be forced to buy a lottery ticket), then you would not see one means by which bonds could be repaid.

Lotteries strike me as a flawless method of funding government. People voluntarily choose to spend $5, $10 or more PER WEEK these days for a chance to win anything from $3 million to $45 million and more.

User fees for things like passports is another way to raise cash. What about paying a fee to take high school examinations? That would defray the costs of having the tests administered & graded.

Some fees, some lottery money, contract insurance - already we have a good beginning.

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How on earth does the idea of lotteries imply the use of force? Please show the path you took to arrive at this conclusion.

Obviously if you reject lotteries as a valid method of raising VOLUNTARY funding (since nobody is forced or would be forced to buy a lottery ticket), then you would not see one means by which bonds could be repaid.

Second point first. If you are implying that bonds would be paid back with funds from the lottery, then your argument for bonds devolves into an argument for lotteries.

Fine. So let's limit this to lotteries, and why they imply force.

For the government to run a successful lottery, they must compete with private lottery firms. In order to do that, they must be as or more efficient than private lottery firms, or the private firms will drive their profits down to the point that government makes no money on the lottery, and goes out of business.

Replace "lottery" with any other business in the above argument and you have exactly the same principles at work.

Why does the government use lotteries, rather than, say, bottle brush manufacturing to make money? Because they control the operation of lotteries - by force. If you don't believe that, try running your own lottery and see how long it takes them to come with guns pointed to take and put you in a cage.

If government did not use force to limit access to the lottery business, the profit margin of running a lottery would drop precipitously, so that, even if the gov't could compete with private entities, the funding available would be far, far less than what is currently realized. If you don't believe that, look at the programmed payoffs for lotteries and calculate the odds of actually winning. For instance, in California, the starting payout for megamillions is $12 million, but that's the unamortized total of 20 future payments. The actual current value is closer to $7 million, but that's before an apx 40% tax cut which brings the actual winnings down to about $4 million. The odds of winning are 1 in 175 million. That's a heck of a vigorish (97.7%), and it will plummet as soon as there's competition (by comparison, race tracks, which have significant operating expenses, have a top vig of 17%, a probability of 1 in 10 pays back an average of $8.30 per dollar) (fine print: that's a shorthand analysis, doesn't account for other ways of winning, nor for the parimutuel mechanism that kicks in when bets exceed the base jackpot, but the general idea holds true)

So the only way for a gov't to effectively run on funding from lotteries is by establishing a coercive monopoly of same.

That holds true for any business venture the gov't might enter to raise funds.

If you argue that most people would play the gov't rather than private lottery because it's "for a good cause," I'd answer that that's equivalent to playing the private lotteries, and just donating the extra money to the government.

There's no way around the principle of voluntary contributions as the sole option for force-free government funding.

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However, applying the example of military volunteerism to voluntary funding of the government has two weak points that I see: First, it ignores that most military volunteers are young, and presumably still idealistic, with not much to lose, while the wealthy are overwhelmingly older citizens with diminishing earning potential, and so are averse to unnecessary spending. Second, wars are periods of intense fear and risk, and instill in all a feeling that drastic action must be taken. Year to year running of a free society does not entail the same level of urgency.

I disagree with the first point: there's no basis for that statement. Young people have plenty to lose in a war (more than older people actually), and old people have plenty to lose if crime goes up (more than young people probably). They're also not less moral or willing to contribute to what they believe in than young people. If you look at the source of money for non profit organizations (charities, museums, schools, churches etc., it's mostly older people)

Look at it this way: if Bill Gates didn't have to pay taxes, he'd have hundreds of billions to give away-and he's actually giving away a lot of his wealth.

To the second point, I would reply that having crime increase, or having foreign threats grow is plenty of cause for fear. Our current government by the way acts on the same fear, and if anything, they are slower to react to it, because the fear of the population first needs to turn into political pressure, and then government will to act.

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