No taxation equals no government?


Samson Corwell

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I ran across this idea recently and it's left me scratching my head. One person I was reading said that no taxation means that there is no government. This seems a little counter-intuitive to me. Do you think taxation is an necessary to that government exists? I can easily imagine, say, a small town with town hall meetings that might not have taxes. Likewise, I wouldn't be surprised if some or many of the initial settlements in America were without taxation given the lack of infrastructure.

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According to Objectivism, government has only one proper function and that is to protect rights. Taxes are a violation of rights. Therefore an Objectivist type government does not impose taxes. Ain't no such thing as taxes in an Objectivist world. What are the alternatives? Voluntary donations.

If you think people would not voluntarily donate to government, well maybe that would be good. Maybe the government is so bad that it's not worth donating to. Government would shape up or shut down.

But if it's a good government (almost a self contradiction), people probably would donate to it like they donate to zillions of charity organizations. If you think I'm exaggerating by 'zillions', Google finds a list of zillions, or at least a whole shitload crapload bunch.

I'm not sure about fees. Seems to me that would mean government is running a business. Should goverrnment run a business?

One point can be added to what Yaron Brook says. I think it is likely that a deal would evolve that you would be able to specify which department of government your donation goes to. From the point of view of the people donating, this deal would give them more control over where their money goes. From the point of view of government, government would get more money. So it would be a win-win deal and probably would be done.

For example if there is an unpopular war, you would have the option of not donating to the department of war, while donating to other departments. In the current setup, people are forced to give their hard earned money to support mass murder war that they may be opposed to.

Someone will say taxes are necessary to fight a modern war, and the war is necessary for survival. Taxes are theft. Theft is immoral. You will say to hell with morality; survival is more important. Or there is a higher morality, called survival. Then you must have a low estimate of the intelligence and rationality of the people that they can't understand why such large donations are necessary.

A modern war supported only by voluntary donations and no taxes would require government to explain why the war is necessary. This would be good. The explanation probably would need to be damn good; else insufficient support for the war. In the current setup, government takes your money by force to support the war and has no need for your approval and no need to explain to you why the war is necessary. Weapons of mass destruction, where are they, that is a secret, maybe there are none, no matter, go to war anyway, no need to justify it.

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Regardless of Objectivism government will continue to tax. The problem is just as much in Objectivism as in government. In the quest for purity anarchy, logically, rears its ugly head, making it one up on Rand, which sure in hell pissed her off. She was not about competition, aka criticism.

--Brant

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The trouble with Brook's (and Rand's) idea that the government could be financed through fees to support enforcement of contracts is that it arbitrarily distinguishes between contract-breakers and other violators of property rights.

Let's examine two cases involving jewelers.

  1. In the first case Jeweler A invites Customer B into his shop to examine a $12,000 diamond necklace. While A's back is turned, B snatches the necklace from the counter and disappears into the crowd on the street outside.
  2. In the second case, Jeweler B invites Customer C into his shop to examine a diamond necklace, and, after some negotiation, the two reach an agreement whereby the customer will take the necklace with her and pay the jeweler $12,000 at the rate of $500/month for the next 24 months. However, after two months, C refuses to make any further payments and also refuses to return the necklace.

Now, under Rand's contract-enforcement fee plan, in the second case Jeweler B cannot use the power of government to recover his property unless he has previously purchased a contract-enforcement stamp. The government will not protect his property rights in a particular sales transaction or loan unless he has already "insured" those rights with government.

Yet in the first case, Rand and Brook would, presumably, call for the government to enforce laws against theft and use its police force to track down the necklace thief, make her return the merchandise or appropriately compensate the rightful owner, and perhaps also serve a prison term. Furthermore, Rand and Brook would call for these justice-providing services to be rendered to Jeweler A at no cost to him. The expense of investigating, solving and adjudicating robberies would be covered by the fees that financial institutions and merchants such as Jeweler B must pay to have their contracts enforced.

But surely it is completely arbitrary to demand payment to protect a citizen against one form of theft, while rendering justice to another victim of equal or greater theft at no charge.

Rand might as well have argued that everyone in society must pay a fee in advance to have any of their property rights enforced. We won't track down the thief/vandal/rapist/murderer unless your contract fees are paid in advance. Such a position would be no less moral than the one she put forth in "Government Financing in a Free Society."

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Rand must have known she was on weak ground with her "voluntary taxation" to finance government, for she was in and out of the subject in a flash. Objectivist politics is the weakest thing about the philosophy, with the ethics the most incomplete. (In respect to the latter what's there is choice but it needs more meat.) Objectivist politics doesn't well support the absolutism she was so in love with, but the libertarians kept the absolutism--the purity--and dumped the rest qua libertarian philosophy. That's why so many libertarians are anarchists which Objectivists really can't stand. I don't think libertarians give a hoot about the ethical/moral underpinings of their politics as long as there is NIOF. Objectivist politics is "A City On A Hill" and should be treated as such. It's a goal you move toward, but cannot obtain. If you did get there you wouldn't stay long, for it's too easy to fall out of heaven and start a trip to hell. That's the trip we're on now. The ship needs to be turned around.

--Brant

the proper role of government is to piss enough people off so they do something about it

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I don't think libertarians give a hoot about the ethical/moral underpinings of their politics as long as there is NIOF.

You could say that 98% of the population gives not a hoot about "the ethical/moral underpinings of their politics."

Ayn Rand does not have a monopoly on formulating the ethics of liberty. John Locke, Adam Smith, Herbert Spencer, Ludwig von Mises, Friedrich Hayek, Murray Rothbard, Andrew Galambos, and Robert LeFevre have all addressed the ethical dimension.

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What are "the ethics of liberty" that libertarians talk about x-NIOF? All politics is ethics but not all ethics is politics. And where in there is the morality aside from the morality of NIOF? Morality is the broader foundation of ethics, but with great overlapping. Lastly, what is the epistemology and metaphysics of liberty--I mean, libertarianism? As a philosophy libertarianism always struck me as 98% politics, aka a political philosophy, under the umbrella of which will flourish voluntarianism from the natural good(?!) of people. "Liberty" is more French than American and "freedom" more American than French. I think there's likely more liberty in America, as an idea, than freedom in France, also as an idea--that is France more influenced America than America influenced France. Regardless, "liberty" has been reduced to a one-word slogan. It lost its head when Rothbard died. Libertarianism peaked in 1972 with Hospers' book and presidential campaign, squabbled to death by Libertarian Party politics with 1980 as the last hurrah thanks to David Koch money, which didn't do the trick.

--Brant

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What are "the ethics of liberty" that libertarians talk about x-NIOF? All politics is ethics but not all ethics is politics. And where in there is the morality aside from the morality of NIOF? Morality is the broader foundation of ethics, but with great overlapping. Lastly, what is the epistemology and metaphysics of liberty--I mean, libertarianism?

Why not read works on ethics by some of the men I listed? A number are available online at the Liberty Fund's Library of Liberty.

See, for example:

Wilhelm von Humboldt, "Of the Individual Man"

John Locke, The Works of John Locke in Nine Volumes

Adam Smith, The Theory of Moral Sentiments

Herbert Spencer, The Principles of Ethics, 2 vols.

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I haven't read those. Have libertarians? Do you have any idea how well read you are compared to probably over 95% of them? I only know of George H. Smith who matches up with you. Thanks for the reading list. I'll also re-read Rothbard's For A New Liberty. I don't think, however, that "self-ownership" is a very strong tree. But are we talking about libertarianism or liberty-tarianism?

--Brant

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The following was posted on the Rebirth of Reason forum and I think it is relevant to the current topic here. The resultant discussion wasn't heated but there were no outright dismissals of the proposal. I believe that this complies with all of the values of Objectivism and, indeed, Libertarianism.

A Proposal to Completely Eliminate Federal Income Tax
by Paul Hibbert

In order to make my case consider the purest and cleanest conditions — the more general case can be expanded later. Libertarians will generally agree that the only legitimate form of government is one that protects individual rights, that is: a system of justice, including courts of law, police, judges and prisons, and defense of the nation from invasion and imminent threat. Therefore, for the time being, consider just those two branches: Justice and Defense.

Two funds for each of those branches will be set up, the “More” Fund and the “Less” Fund. Donors can make contributions to the ”More” Fund of Justice or the “Less” Fund of Justice and the corresponding ones of Defense. Contributions to a More Fund stay in that fund but they also cause an equal amount in the Less Fund to be transferred to the More Fund. Similarly, contributions to a Less Fund stay in that fund but they also cause an equal amount in the More Fund to be transferred to the Less Fund. Thus, for instance, if a donor wishes that there be more federal money spent on justice he will get his wish, with double benefits, and vice-versa. The operating budget for a program is the surplus of the More relative to the Less fund. Note that this process is equally fair if one is a progressive or a conservative.

Money that resides in a Less fund acts as a reserve for future necessities, emergency, or as a savings account for things that the government (in less enlightened times) would have borrowed or floated bonds for. For instance, if in world affairs war clouds appeared in an otherwise peaceful climate, public opinion would cause large donations to be made to the More Defense fund, thus making even larger amounts of money immediately available by drawing money from the Less fund and transferring it to the More fund. If this principle was applied at the municipal level and there was a program to build an ice arena, for example, donors might initially react negatively and donate to the Less fund. As time goes on they might say, “Yes, we have the money and it’s a good addition to the community” and donate to the More fund thus releasing money from the Less fund. The ethic would be, “If you want it … save for it.”

Norms for donations would spring up quickly with pundits, analysts, commentators, bloggers, politicians, and the media providing opinions and facts to the citizens. If a fund were to be judged under-funded or over-funded the donations would react accordingly. Thus there would be a dynamic, real time reflection of the wishes of the electorate. Donors could make their contributions whenever they wished. If, in the happy event that the funds were judged over-funded, donors would refrain from contributing anything. Withdrawals from the surplus to fund ongoing operations would deplete the More fund until the program was judged under-funded.

It would be naïve to think that this could be accomplished without some other motivation on the part of the donors, and that motivation is that their donations would be of public record. Only the amount of their donation would be revealed (unless they requested otherwise) so that their political position could be respected. Charities routinely publish a list of their donors classified as to the amount of the gift and for good reason — the donors are proud to be recognized for their generosity and it encourages further donations. My own opinion is that there shouldn’t be any sense of “duty” associated with donating and that donors should be just doing what they “want” to do. There would be many free-loaders but there are many at the present time: the underground economy with cash transactions, criminals not reporting drug money, loopholes, off-shore income, and on and on. Furthermore, only about one third of the population pays any federal income tax at all. A whole industry exists devoted to minimizing or avoiding federal income tax. Think of what this does to the mentality of those participating in this endeavor. It fosters antagonism towards government even among those most inclined to view government as a benevolent agency and they still take advantage of every loophole, subsidy, grant, incentive, deferment and concession that the government provides in its programs of social engineering, the result of which transfers the tax burden to others who are not as adroit.

In my opinion, donating would become a source of pride that one’s friends and neighbors could appreciate rather than it being a duty. Undoubtedly there would be some “discrimination” against those who don’t contribute in the sense that those who donate appropriately will naturally tend to associate and do business with those who do.

I don’t think that corporations or businesses should be allowed to contribute, as employees and stockholders might not hold the same views as the entity and they shouldn’t have to contribute to programs with which they may disagree. This is similar to unions forcing members to contribute to programs that they are opposed to.

Imagine, just imagine, what this would do for both the economy and ethos of the nation. No longer would there be any, I mean any income tax with its stultifying burden on the citizens. Perhaps a million or more smart, well-meaning people could be freed up from trying to do the best they can within the system and instead allocate capital and resources where they can best be used — for the good of everyone. Currently, every business decision has to consider the tax implications and this distorts all the signals that the free market depends on. The IRS could be relegated to a tiny fraction of its size with its only duties being to ensure that the donations get funneled to the right bucket and to keep an on-line ledger of all the donors and their amounts so that the data are available to anyone at the touch of an iPad. Of course fraud might be a problem so the identity of donors would have to be protected.

The examples of Justice and Defense are just that but the principle of publicly visible donations could be applied to other (less legitimate, in my view) functions of government such as social policy, environment, consumer protection, and so on. Surely, one can visualize the complex interactions affecting the funds as donors react to the changing “market” forces. Some donors might put all their contribution into the More Social Policy Fund, for instance, and others the Less but what will result would be a dynamically stable system that reflects the mood and aspirations of the citizens as to the direction the country should go. In this sense the government would be under control of the citizens rather than the opposite, as it seems to be now.

If you believe that a civilized country can’t exist without coercion and that taxation is moral even though it is coercive then you are stuck and can’t move forward. You are reduced to being a pragmatist believing that the present system works — kinda, sorta. Without ideals to provide a framework for all your beliefs then you are inevitably confronted with all kinds of contradictions. The perpetual, vicious fighting between political parties regarding who should be taxed, and by how much, that fosters class warfare would completely disappear with those decisions being made automatically by each citizen when he votes with his pocketbook. Citizens would tend to take more interest in current events and they would feel, justifiably, that government is responsive to their opinions and needs.

So, no matter whether you’re a progressive or conservative the benefits of a publicly open donation system of funding government should be apparent. In spite of my arguments you might still regard this scheme as impractical, pie-in-the-sky utopianism but nevertheless it’s my contribution to what I think is a means of leaving this world in a better state than when I was brought into it. In my mind, this proposal could release the repressed energy and usher in a whole new era of pride and prosperity to the USA that could rival the industrial revolution. That’s my position and I’m stickin’ to it.

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Wherever you find government however "legitimate" it is it will be doing some illegitimate things. As "evil" in action it can serve as an inoculation against much greater government evils.

--Brant

this search for purity is like searching for virginity in a whore house

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Hibbert wrote:

I don’t think that corporations or businesses should be allowed to contribute, as employees and stockholders might not hold the same views as the entity and they shouldn’t have to contribute to programs with which they may disagree. This is similar to unions forcing members to contribute to programs that they are opposed to.

Perhaps we should have laws prohibiting corporations from making contributions to any charity, for surely there is bound to be at least one employee or stockholder who will dissent from that donation. In fact, why not make all corporate decisions subject to the veto of a single employee or stockholder?

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Good points which I am not going to defend too strongly, as they aren't central to my proposal. However, lets look at the motives as to why a corporation might want to donate to a charity. It might do it as public relations or advertising play to make it's products acceptable to their clients or to the public at large in order to forestall regulations. An example would be a tobacco company donating to cancer research. On the surface that action seems to be benign but in fact it is a form of lobbying and influencing government regulations, whereas my proposal argues that all the influencing of government should come from the opinions (donations) of individuals. I think there could be confusion over corporations donating to charities vs. donating to government. Government is not a charity when government is defined as protecting individual rights. Using the word 'donation' just refers to it being voluntary rather than coerced.

And why shouldn't all corporate decisions be held hostage to a single stockholder? Because the stockholders voluntarily bought into an enterprise that is democratically run — at least according to each stockholder's stake. This is in contrast to a union where, if someone is capable and trained as a pipefitter, for instance, if he is to be able to make a living, he is forced into joining a union.

Sam

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I ran across this idea recently and it's left me scratching my head. One person I was reading said that no taxation means that there is no government. This seems a little counter-intuitive to me. Do you think taxation is an necessary to that government exists? I can easily imagine, say, a small town with town hall meetings that might not have taxes. Likewise, I wouldn't be surprised if some or many of the initial settlements in America were without taxation given the lack of infrastructure.

Back in those days,. the men were required to served in the militia and to drill regularly. In case of fire everyone who could was required to be in the bucket brigade.

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Good points which I am not going to defend too strongly, as they aren't central to my proposal. However, lets look at the motives as to why a corporation might want to donate to a charity. It might do it as public relations or advertising play to make it's products acceptable to their clients or to the public at large in order to forestall regulations. An example would be a tobacco company donating to cancer research. On the surface that action seems to be benign but in fact it is a form of lobbying and influencing government regulations, whereas my proposal argues that all the influencing of government should come from the opinions (donations) of individuals. I think there could be confusion over corporations donating to charities vs. donating to government. Government is not a charity when government is defined as protecting individual rights. Using the word 'donation' just refers to it being voluntary rather than coerced.

And why shouldn't all corporate decisions be held hostage to a single stockholder? Because the stockholders voluntarily bought into an enterprise that is democratically run — at least according to each stockholder's stake. This is in contrast to a union where, if someone is capable and trained as a pipefitter, for instance, if he is to be able to make a living, he is forced into joining a union.

Sam

Since government regulations of the free market are an encroachment on property rights, pro-liberty people should be in favor of giving corporations and other property owners the means to stop or short-circuit those regulations. Treating "influencing" or "lobbying" as uniformly bad requires one to ignore all context. In fact, we should celebrate as a hero anyone who successfully influences someone else to mind his own goddamned business.

As for making all corporate decisions subject to unanimous approval of all stockholders, as soon as that insane proposal comes to pass, we shall see the end of the corporation in any meaningful sense. All it would take to put GM out of business is for a Ford employee to buy one share of GM and demand that "his" company cease automobile production immediately.

And unions, both in theory and historical practice, do not always coerce membership.

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Since government regulations of the free market are an encroachment on property rights, pro-liberty people should be in favor of giving corporations and other property owners the means to stop or short-circuit those regulations. Treating "influencing" or "lobbying" as uniformly bad requires one to ignore all context. In fact, we should celebrate as a hero anyone who successfully influences someone else to mind his own goddamned business.

I would agree with you if that were all lobbyists did, but I've seen too many cases in which the lobbyists lobby for special privileges for their business that other businesses don't receive. For example, GE lobbyists might succeed in reducing the taxation of GE while leaving the taxes paid by every other corporation at a higher level. In the end, only small corporations end up paying the full corporate tax rate because they're the only ones that can't afford good lobbyists. The result is a government in bed with the giant corporations.

I'm not sure what the solution is, but I'm not going to laud the enormous supposed good done by lobbyists.

Darrel

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Perhaps we should let people vote based on the size of their contribution to government.

Government would not receive any funding from any other source. There would be no taxation or fees.

In each cycle, each person would be allowed a number of votes equal to the number of dollars contributed to government less any payments received from the government since the beginning of the cycle.

That would make government similar to corporate governance except that one's influence would have to be renewed each cycle.

Contributions would have to be made public in order to give people with opposing views time to react.

We could keep the current system with representatives having 2 year terms, presidents having 4 year terms and senators having 6 year terms so that one faction couldn't completely change the system in one cycle. Keeping the system in which judges are appointed for life would also help the stability of the system.

Any attempt to wield undue influence would be costly as it would require a large contribution to the operation of the government and would likely reduce the influence of that faction in the future.

People on welfare and corporations that received government contracts would have their influence severely curtailed, leading to small, efficient government.

Would this lead to too much influence by wealthy individuals or corporations? What would they gain by attempting to have their candidates elected? They could vote themselves government contracts, but would give up much of their voting power in the next election cycle by doing so. Besides, they'd be paying for their own contracts if they donated large amounts of money to obtain influence.

Would anyone bother to contribute at all? Contributors could build monuments to themselves, as suggested above, but would they donate enough to pay for the national defense?

Darrell

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It's the intervention that needs banning, not the lobbying, which is simply a expression of free speech.

It's the same distinction we make in opposing Marxism but not the sale of The Communist Manifesto.

I agree that government intervention in the marketplace is the practice that needs to be banned. I'm just not wild about lobbyists.

Darrell

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Darrell:

Because the stockholders voluntarily bought into an enterprise that is democratically run — at least according to each stockholder's stake.


Yeah, that's what I said.

Francisco:


Since government regulations of the free market are an encroachment on property rights, pro-liberty people should be in favor of giving corporations and other property owners the means to stop or short-circuit those regulations. Treating "influencing" or "lobbying" as uniformly bad requires one to ignore all context. In fact, we should celebrate as a hero anyone who successfully influences someone else to mind his own goddamned business.

As for making all corporate decisions subject to unanimous approval of all stockholders, as soon as that insane proposal comes to pass, we shall see the end of the corporation in any meaningful sense. All it would take to put GM out of business is for a Ford employee to buy one share of GM and demand that "his" company cease automobile production immediately.

And unions, both in theory and historical practice, do not always coerce membership.

Lobbying is almost always done behind closed doors with the big money of special interest groups and is contrary to my opinion that the 'influence' on government decisions should be proportional to the amount of money contributed by individuals.

In re-reading my response I can see how you came to the conclusion that you stated. If I was of that opinion I should be treated as a troll. Of course they shouldn't and I provided an example of citizens electing Aldermen to represent them. Each and every citizen doesn't get his views executed by the mayor.

I'm not aware of any unions not requiring dues for membership. I've been a member of two unions.

Sam

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