The Proper Financing of Government
While I consider myself a small “L” libertarian, I primarily follow Ayn Rand’s philosophy of Objectivism. Since doing so it has provoked me to ask questions about legitimate taxation (if any).
The three essays central to Ms. Rand’s ideas on this matter are encompassed in 3 essays: Man’s Rights, The Nature of Government, and Government Financing in a Free Society.
In each essay, the Objectivist position on taxation is clearly outlined: each individual human being has inalienable, individual rights from their nature and the function of government is to protect them.
That being said, the Objectivist position on taxation further states that taxation of any kind is a violation of an individual’s rights since it is an infringement on the life, liberty and property of the individual government is supposed to protect.
In Man’s Rights, Ms. Rand states that rights are a moral principle that pertain to freedom of action in a social context and are an extension of morality into a social system.
One way to look at this is that rights, as outlined by Ms. Rand, are negative in that no one is obligated to see to the welfare of others and government is to stay out of human affairs save instances of a person’s rights being violated.
This as opposed to a positive rights outlook (such as what is seen in religions) where people are assumed to have a duty to care or tend to the welfare or needs of others.
Rights, in the Objectivist context, are seen as negative in that an individual will be secure in the knowledge that their rights will not be violated by others (including government itself) and is also necessary in the Aristotelian tradition in order for people to live and flourish (i.e. eudaimonia).
In order to secure these rights mankind needs government as rights would be (and in many casis are) the basis of law while prohibiting the involutary use of force since the use of force and fraud is the only way to violate the rights of others.
All of this being said, it is clear the most obvious answer in which to adequately finance government while respecting individual rights is by a lottery of some kind and even user fees paid upon completion of a service provided such as a crime investigation or arrest of a criminal.
Libertarians tend to agree with Ms. Rand’s views on this as well.
I have developed a manner in which government could be financed along Objectivist and even libertarian lines.
Since mooching or looting of the productive for the benefit of the non-productive is evil, it would also be wrong for one who does not or will not pay into government funds to recieve the benefit of police or usage of court systems or even services that are not proper government functions.
At the same time it would be wrong to force anyone (even a moocher or looter) to pay taxes or fees to government if they clearly have no need to utilize it.
Therefore, if the lottery finance method is not successful in it’s application, the only logical method in which to finance government while, simultaneously, respecting an individual’s rights is a method similar to a sales tax.
A fee paid at the point of purchase when one buys products or services is the best manner in which to ensure that people who wish to utilize government police and court services can do so.
When one purchases products or services, it is a voluntary contract entered into by two or more parties for the utilization of exchange in the marketplace with the motive of each party profiting from the trade in some manner.
The proper function of government is to resolve disputes in the courtroom, pursuant to objective law.
Therefore, sales taxes paid today could be considered a fee paid for the right to use a government’s services to resolve any dispute that might arise concerning the contract of purchase or sale or in cases of the violation of individual rights so long as they are paid for the services rendered and not for things that government is not supposed to be involved in (like education and health care).
National defense is another issue entirely. Since it is logical to assume that, overall, people would want to be defended by government in times of war or armed foreign invasion, therefore a mandatory payment utilizing the fee-for-service method I outline above for government in order to provide military services is warranted.
Simultaneously, if one has no need, does not want to use or is too poor to afford paying the said fee in order to use government police and court services (under my scenario) the buyer could be refuded by the merchant or by applying for a refund at a government’s revenue office.
Either scenario could result in either the merchant or citizen being reimbursed and government remaining out of the affairs of those who do not wish to associate with it.
This puts government in a different position that many other philosophical and political theories so that government is, as Ms. Rand points out, not the ruler, but the servant or agent of the citizens.
Confiscatory taxation (such as the income tax) and the initiation of force by the government against those it is supposed to protect (as in the case with the Phoenix food tax) is immoral and should be peacefully resisted at every opportunity.
Under Objectivism, and even libertarianism, it is not clear that taxation for supporting a government in its necessary functions is morally problematic.
Yet Ayn Rand suggested a fee on contracts as a method of government financing if her voluntary financing proposals did not work.
I agree with her. And the simplest way to achieve this would be to levy a small fee (or tax) on sales, since they are legal contracts that must be upheld by government.
A point of purchase tax used only to finance a police force, court system and national defense would be sufficient only to cover the costs of all three governmental operations in order to protect individual rights.
Government could, in turn, maintain a small treasury that could be used in case of emergencies and to provide it’s three proper functions.
In this way, the fee would only represent a payment to government for it’s necessary functions that all citizens objectively need.