Objectivists: How can we have a government without taxes? Is this the weak point of this philosophy?

Question

Ayn Rand was against anarchism but she was against any kind of imposed taxes.

Answer 1

It is possible if the government have other means to get money. In some oil rich countries, there are no taxes.

The government get the money from oil revenue.

In some small countries, the process of collecting taxes would cost more than the taxes collected. Therefore, it is not practical. The government create some government run companies to get money.

Answer 2

a government can't be run without taxes/ funds, perhaps if taxes were voluntary then few one would give thus eliminating fair share.

The selfish will keep his money, while the generous will give (rich/poor)

Answer 3

Remember, Rand didn't want a huge government like we had. Believing that the government's sole duty is to protect the rights of the citizens, she believed that the government should consist only of the police, the military, and a court system to resolve disputes and enforce contracts.

Rand had a few notions of how to pay for this, and dozens have risen from the ranks of Libertarian economists after her. An overview of some of the main ideas:

1 - Voluntary donation.

This argument is that you have most to gain by living in a free country. Those who had the most to lose by having it taken over militarily, or having it fall into anarchy, would have a vested interest in paying to have military, police, and judicial safeguards. This security is an investment against groups that would take over the country and tax them more heavily. As the rich stand to lose the most, they would likely invest the most on a strictly voluntary basis.

An argued corollary is that a lack of taxes would free money, which would lead to more private investment, which would, in-turn, create more jobs and thus raise the standard of living for all citizens. As all the people gain more, there would be a larger incentive to invest in the government. Thus, the longer the taxes are gone, the more the people are willing to give. This point is debatable (I don't really see it happening on any but negligible scales), but I thought I'd put it up for consideration.

2 - Voluntary corporate donation.

Companies could charge a small percentage cost on their products to donate to government services. Like Method #1 above, they stand to lose the most by having our country undefended, so this would ultimately be to their advantage. This could be a marketing ploy as well...maybe you'd pay another 2-3% on a cup of coffee that goes to the military, and you get the slogan, "Starbucks: the coffee that defends America." My brother and I came up with a more amusing idea one day: "Sir! We just got f#*%ed by something sponsored by Trojan Condoms!"

3 - Sale of government assets and management into a trust fund.

If the government were to sell the property that would be deemed unnecessary for services, this could be organized into a multi-billion dollar trust fund. Managed properly, this money would provide not only transitional costs, but also an emergency fund in the case of war.

4 - Fee-based services.

Instead of receiving a "pot" of money on occassion, government services receive money for those voluntarily using the service. For example, two parties bring a case to court, they owe fees to the courthouse. When first transitioning, this helps the government pay down debts.

Finally, while Rand didn't talk about the specifics of the transition process, she did think that the government should only scale back slowly, first balancing the budget and cutting services. Lowering taxes would be a very late step, to help ease the burden of the transition costs. I am personally unaware of any theorist that would do it any other way.

Answer 4

the government agents works for free?

i'll get the concrete, you drive the bulldozer to built the road during off work.

Answer 5

Here's Ayn's answer, slightly paraphrased to give only the relevant info:

"In a fully free society, taxation ... would be voluntary."

However, she goes on to say that such a problem would only have to be resolved when society is truly free. The problem is very much theoretical right now and would have relevance only when the time came for voluntary taxation (which she likened to paying for insurance) to be implemented.

And, as was said earlier, Rand was against taxes that were based on how much you made. A flat tax rate would be much preferable.

Answer 6

While I think the question is a good one, I first want to caution people by saying that objectivism's merit as a philosophy is not contingent upon any singular notion of tax policy.  While Rand advocated laissez-faire principles, she would be the first to indicate that nobody should get something for nothing.  It would be quite the strawman argument to suggest that Rand wanted to have her cake and eat it too by asking for some (albeit limited) government that would cost her nothing.

Indeed, I suspect Rand would concede that government requires funding to provide those services that are necessary to preserve society.  For example, a military may be necessary to protect individuals from foreigners who would act to restrict their rights.  Similarly, some form of law enforcement and court system would be necessary to protect individuals from infringements on their liberties here at home.

Voluntary taxation essentially amounts to a payment of value for value.  The clearest example is well known.  If you want to drive on public highways, you have to pay a toll to help fund their maintenance.  The principle is that the cost of most government services can be allocated to those members of society that choose to benefit from them.

Some would argue that this cannot work in all cases, and it may be that these people are correct.  For example, Rand would argue that the government should protect people's property rights, but surely this suggests that property owners should pay for this service, does it not?  And if it does, how does one impose a tax upon those property owners who want to pay for the protection of their property rights while leaving untaxed those who do not?  In the end, some taxes would have to be viewed as implicitly voluntary (i.e. by assuming that anyone who owns property would want his rights to that property protected), but that is a slippery slope indeed.

In my view, maximizing the use of user fees makes sense, but purely voluntary taxation, though an admirable goal, may never be achieved.  However, I do not think purely voluntary taxation is necessary to uphold the spirit of Rand's ideals.  Indeed, many of us view taxes as necessary evils, and perhaps involuntary taxation on a comparatively minor level is something that we must accept.  Just keep involuntary taxation to a minimum.

  

I do think Rand's philosophy is at its weakest in areas of politics and economics, and I think you have accurately called her on an area where her principles seem logistically difficult to implement in their purest form.  However, her principles are largely positive when applied in an aspirational manner, and so I hesitate to throw out the baby with the bath water by condemning objectivism for the difficulty of implementing Rand's favored tax policy.

Thanks for your question.

Answer 7

I believe her only concrete proposal was a lottery.

Answer 8

When I attended "Ayn Rand's Atlas Shrugged and the Moral Foundations of Capitalism," hosted by the Clemson Institute for the Study of Capitalism, I had several discussions with one of the staff, professor Richard Ebeling.[1]  

One of the questions asked (whether by me, or someone in the group) was how could the government be paid for voluntarily?  Not speaking ver batim, but he basically said that it might be possible to fund the government voluntarily in the same way that religious organizations (like churches) are funded.  People are persuaded to believe in certain ideas, and voluntarily give their money and support to organizations which reflect their beliefs, such as churches.  I think I agree with him, as I find no problem with this.

Basically, the means to a voluntarily-funded government involve two broad steps:

(1) Reduce the functions of the government to their proper role: the protection of individual rights.  The means suggested by Economist George Reisman in his book "Capitalism: A Treatise of Economics" would be helpful in this area.[2]

(2) Intellectual activism.  People who believe in minarchism should argue persuasively why it is the correct system to have, and what it will offer citizens if they chose to uphold it voluntarily.  The evidence that minarchism is the system geared for human life has been piling up since America's founding, and the failure of other types of governments (and anarchy) is only more proof of the efficacy of minarchism.

Answer 9

In small communities, government is really more a symbolic status. In this kind of small communities more than administrating goods or so, government served more as arbiter and as counsellor for public matters. The governmental issues require so little time that government heads could actually work as everyone. Interestingly also, people with governmental functions tend to be the better workers of the group.

Even more, there were small communities in the Pacific Ocean, in which to have political power, people needed to pay their people usually meals and stuff. So the people would deposit trust in them to rule some public issues.

What is really interesting about this question is what it can be inferred about the nature political power. There is no government without political power, and also, there cannot be political power without impacting society somehow systematically, i.e., being a de facto influence in society. Government or some forms of government surely can survive without taxes, but it cannot survive without genuine and strong legitimacy.

Answer 10

Flat tax on consumption would be a rational solution.

In a democracy if you vote for this then and it passed then it would be voluntary.

Answer 11

"supporters of minarchism counter that a government could survive on private donations and the creation of trust funds without any form of taxation whatsoever."

that's a quote from wikipedia.  I don't necessarily agree with it, but that is the argument