If there has to be taxes...

Titan's picture
Submitted by Titan on Fri, 2005-12-30 18:32

IF there has to be taxes (for the sake of argument put aside Obectivisms stance on taxation) what would be the most 'preferable' tax, and at what rate?


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Domain of the Free

Wes's picture

Sam: I understand what you mean about tourism, but it is listed as one of the major criteria and seems to be emphasized in the example.

I guess the next step is to set up a PayPal account to accept contributions;)

No good faith

Wes's picture

Yeah it’s tricky how that goes. How words can be adopted by different groups and have their definitions subtly twisted. Then they're used as a screen to identify people. Cuts down on the thinking process for a lot of people. Pragmatist and liberal would be good examples. Individualist would be another.

The Military in a Domain of the Free

Sam Erica's picture

Wes: There's no requirement to be tied to tourism and yes, the Free State Project would always be subject to Federal instrusion. An African nation would be fine ... whatever the Administration would deem to be profitable.

As for the miltary, a standing army ewould not be necessary as long as a retainer with a mercenary army were available. Check the FAQ on the site.

Sam

I concede

sjw's picture

> That's fine with me, just as long as you realize that
> my use of the language also coincides with everyone else's.

I will happily concede that your whole way of thinking coincides with the culture in general. Not everyone else's, just most everyone else's.

That's fine with me, just as

Wes's picture

That's fine with me, just as long as you realize that my use of the language also coincides with everyone else's.

And it’s also disingenuous for you to try and encapsulate the argument to these two points, but I'm tired of doing the heavy lifting for you so go ahead and reread some of my posts. I've had to restate my position too often anyway.

I'm both

sjw's picture

> Because you’re going to have to prove you’re not a
> bully and a snob.

By your use of English, I'll happily call myself both a "bully" and a "snob". So I guess there's nothing left for us to argue about then?

And how did I misrepresent

Wes's picture

And how did I misrepresent you? Because you’re going to have to prove you’re not a bully and a snob. Scott made a better argument for the title of bully than I did and you’re a snob because you think I’m not worth talking to just because you think so.

And now you are a liar because you never were specifically complimented on incrementalism. But I’ll admit to some minor obfuscating in raising this point because you started out with a reasonable stance only to retreat into “[t]here's only one way”. Which was really surprising to me because I started off agreeing with you only to be accused of “operat[ing] on an opposite premise, antithetical to Objectivism” and being a “liberal.” You went from someone who seemed sensible to a Randroid just because you felt the need to lecture.

It’s cute how you end by trying to defend hypocrisy with hypocrisy, because of course condescension and mocking my intellect isn’t insulting. And what’s with the “we” statement? Apparently you’re more full of yourself than I thought.

And no Shayne being a bully doesn't imply that someone is weaker. Bullies get their asses kicked all the time. But hey, way to go on the "I'm not going to insult you thing." Or was it supposed to be "we're not going to insult you?"

Bully

sjw's picture

By the way, if you really want to insult me it might be better to pick a better insult. Only the weak can be bullied. In this context, "bully" just conjures up the image of a man being annoyed by a scrawny pathetic excuse for one, jumping up and down and screaming "bully" every time the man tries to brush the annoyance aside.

LOL!

sjw's picture

> You refuse to address points raised and purposefully
> misrepresent people.

He says, after grossly misrepresenting me...

> Sloppy use of language? How about some specific instances?

He says, as if my mention of this was to him and not Scott...

> At no point in this thread have you argued for incremental
> changes. You in fact stated just the opposite, that incremental
> changes are immoral.

He says, even though someone specifically complimented me on my point that incrementalism toward the right solution is not only good, but the only practical approach (well, assuming we don't "buy" some land).

Wes, there's really nothing I have to say to you that isn't an insult, so please, stop asking me for one. Yes, yes, we are all now aware of how aghast you are at what you see, with your oh so sharp mind, as my hypocrisy, you've made it clear repeatedly.

Its already been jacked

Wes's picture

I take it the New Hampshire experiment is out because you'd still be subject to Federal intrusion?

I don't like the idea of being so heavily tied to tourism. I'd prefer a more concrete industry.

How about an Africa nation?

And until the rest of the world catches up there would still be a need for a viable military. For things like self-defense and enforcing contracts. It'd probably look more like the CIA than an actual army though considering the size of the country. Hopefully we'd be less hated than say Israel and could get by with less.

Can I put a new perspective on this thread?

Sam Erica's picture

Can I put a new perspective on this thread without highjacking it?

The subject of 'buying land' strikes a chord with me. Please visit my site:

http://domainofthefree.com/index.htm

Sam

No Shayne you refuse to

Wes's picture

No Shayne you refuse to engage me because you can’t “win”. But at least now we can add snob to your list of titles.

And you’re a bully because you try to browbeat people into acceptance of your position or submission instead of actually engaging in discussion or considering other ideas. You refuse to address points raised and purposefully misrepresent people. I’ve already listed several times that you’ve done this.

Sloppy use of language? How about some specific instances? Are you referring to my attack on your “definition” of the moral/practical dichotomy? If so it’s hilarious that you’d attack me for aping your misuse of the language.

Here’s another recent example of your sloppy language; accusing me of being a liberal. Its wrong and I challenge you to find a word that is sloppier. It can be used to mean exactly opposite things.

And please point out where I was arguing that Rand’s ideas won’t work.

At no point in this thread have you argued for incremental changes. You in fact stated just the opposite, that incremental changes are immoral.

For the record

sjw's picture

Wes: Since you've pressed the issue: My refusal to engage you implies only one thing: that I don't think you're worth engaging. And you've proven that that's the right choice here by your wanton misrepresentation of my position. For one thing, I was the first one here to support incremental improvements, and I still do. Recently I was not arguing about an increment but about what we should be incrementing toward.

I know a liberal when I see one

sjw's picture

I'm a "bully"? Yeah, and Bill Gates "forces" you to buy Windows.

Your sloppy use of language is just an indication of the thinking behind it. And another indication is your arguing that Rand's idea won't work, while being grossly ignorant of it. You ought to be questioning yourself not me or Rand.

Andre's idea has some merit

sjw's picture

Assuming a group of rational individuals could get Canada to "sell" some of its land, and assuming agreements could be secured such that one could reasonably expect other governments to keep their hands off, then there's nothing wrong at all with that, it just might work.

The problem I have with Andre's approach is that he's going to base this country he sets up on the premise that the "buyers" actually legitimately own this land (they don't, since the "seller" didn't own it), and he bases his enforcement of laws on this false premise.

We could modify Andre's suggestion though to recognize that this "buying" of land is merely a way bribe another governments into recognizing a new government for a certain region, and then that new government could be set up to respect individual rights, one based on the correct premise that this land isn't owned by anyone except the individual property owners, but exists because the founders set it up, just as the founders of the US put their lives and property on the line for the new government but didn't declare that they owned the entire continent.

Come now

atlascott's picture

"No principled approach is "academic". This is just another instance of the moral/practical dichotomy. If you can't see how it would work, then you deem the solution "impractical" instead of coming to the proper conclusion: you lack vision."

An approach can be good on paper and impossible in practice.  It's called being wrong, making a mistake.  Appropriate context, and considering all relevant factors is not as self-evident and obvious as some people would have us believe.  People DO make mistakes sometimes, even very talented, educated and careful people.  It can easily be accomplished by focusing on the wrong things when designing the plan, by not heeding the appropriate context for making the plan.  Your position here is typical Objectivist intellectual bullying.  "If you do not agree, you lack vision.  You are a pragmatist."  Eh, poop.

You bet your ass I call plans that I do not think will work "Crappy Plans."  I always will, because I do NOT put the product of another man's mind before my own.  I will not suspend my judgment in lieu of another's based on urging, or what Ayn Rand wrote (in a completely different context, 40 years ago)  when I think he's making a mistake.  That's what individualism is all about.

Shayne,You've refused to

Wes's picture

Shayne,

You've refused to address my points directly and instead insist on putting words into my mouth. Your refusal to engage me has spoken volumes about your character. You are a simple-minded bully.

I proposed a consumption tax, what you call a "transaction" tax. In economics, they avoid calling it a "transaction" tax because it would be easy to confuse it with a "transfer" tax. Transfer taxes are more invasive, easier to avoid, and discourage transactions. Consumption taxes what people actually use, are easier to track, and encourage saving/thrift. How does switching to a consumption tax not fit with a principled approach?

To argue that things can only happen in one way shows an appalling lack of vision on your part. You are the only hypocrite in the room. I advocated Incrementalism because you're not going to change everything all at once. That doesn't mean the increments are immoral.

Rand's real idea

sjw's picture

Scott: I think you're misremembering Rand's idea. Or I am... In my recollection, the payment of the "tax" was made at the time of the transaction, and that served as a kind of "insurance" that would pay for the courts if the need arose. You don't pay at the time you use the courts (which I agree would be a very bad idea so I'm almost certain that Rand did not propose it).

My point is not academic. In the original US, in actual practice, they implemented something close to what I'm suggesting (frontier laws).

No principled approach is "academic". This is just another instance of the moral/practical dichotomy. If you can't see how it would work, then you deem the solution "impractical" instead of coming to the proper conclusion: you lack vision.

I agree that we have a huge problem and it would be nice if there were a shortcut solution to a free society. But there just isn't. There's only one way: convince a large enough set of people that individual rights are *right*, and then we can win through revolution or evolution. But we can't win if we don't have a coherent vision, and if we are hypocrites about individual rights!

It is going to take decades or longer, but it's the only way.

I think your tangent is the right thing to talk about.

Wes's picture

Scott(?), I think your tangent is the right thing to talk about in keeping with the spirit of the original post.

Taxing corporations in anyway discourages their existence. And if we tax them at all they will spend a considerable amount of resources trying to not pay them. We want to encourage corporations because they give more people jobs, which then provides a better tax base. Compare what a corp. makes in income to the wages it pays out.

Also the basic unit in the government should be the individual. The corporation should just be a way to organize work.

Did you mean to say that

Wes's picture

Did you mean to say that pragmatism IS practical?

Why would you want to argue semantics. Taxes have "worked" a very, very long time so according to you they're moral. (If you're around long enough to reach "ultimately" let me know how things turn out.)

Who was arguing for something that was immoral?

"I'm having a hard time

atlascott's picture

"I'm having a hard time seeing where I'm the bad guy here."

I don't think you're a bad guy at all!  In fact, I enjoy your posts tremendously!

"...not forcibly extracted."

I guess that's where our difference lies.  I do not think a tax MUST be forcibly extracted.  If payment of it is law, and is supported by the weight of the government, whether jail or citizenship status, then I'm calling it a tax.  Maybe a minor quibble:  I ~believe~ (could be wrong) that Rand argued for pay-as-you-go Courts.  Ie., if a corporation wants to sue another, it must pony up the Court's costs to enforce its rights.  I see problems with this that are beyond the scope of this thread.  That's why I think a 2% income tax is easier and is just an across-the-board solution.     No deducations.  No hiding income.  Flat 2%.  We'd have to figure out something with respect to coroporations, though, because: (1) If they were not taxed, individuals could incorporate and pay themselves a pittance while living an opulent, tax-free lifestyle; and if (2) we taxed corporations, it would essentially be double-taxation--pay once for corp income, and pay again on the percentage of that income paid to employees.  I guess you could do a corporate exemption to the extent of payroll, and that would about solve that.  Uh, oh, there I do on a tangent...

"

Something ought to strike you as wrong about this. Governments claim almost the entire earth's surface. If they really legitimately own this land, then they have the right to use it as the please, and therefore the right to declare any man who walks on it without their permission a trespasser. So where is a rights-respecting man supposed to live in this setup?"

I see your point.  But I find it to be somewhat academic.  For all intents and purposes, and for the purposes of this discussion (most relevantly), Canada DOES own its land.  It is a sort of historical trend that conquest and possession means ownership for governments.  Governments are simply aggregates of people.  I see no good reason why we shouldn't be able to buy some land and write our own laws.

I can understand why you might think this rather pragmatic of me.  Simply conceding reality, or the state of things as they are, is not pragmatism.  It is necessary to reach whatever goal there is.  Given the historical context of conquest and possession, and our values as Objectivists, then BUYNG land has to outrank taking it on the morality scale.  And if we do not have a clear delineation of OUR land versus THEIR land, then Free Men will not know where they may or may not habitate qua man.  A practical and somewhat unsatisfying answer for philosophers, I know, but simply the reality of the situation.  One man cannot be truly free on his own under any current government.  Ans the answer to your question is:  the truly free- and rights-respecting- man HAS no place in most governments and corners of the Earth.  THe US is still the best place for us, but that doesn't mean we cannot do better.

Pragmatism doesn't work

sjw's picture

By "practical" we mean "that which works." Since pragmatism works, it's not practical. Since the immoral ultimately does not work, it's not practical.

Ownership

sjw's picture

Scott: Thanks for clarifying what you meant by "strident". My point was that if you had specified where you thought I was being too tough, I could have probably explained my reasons. Perhaps you're referring to my intolerance of those who sanction innocent men being held at gunpoint by mindless thugs who cannot figure out how to fund their government programs by any other method than thuggery. I'm having a hard time seeing where I'm the bad guy here.

A voluntary "tax" is, as you said before, not a tax. But yours is voluntary. And it's almost exactly Rand's idea anyway--if yours is a tax, then so is hers. But I still think it's a quibble what we call it as long as we both know that it's not forcibly extracted.

I can't fathom how you might think I'm not an advocate of property ownership. And I'm not disputing Canada's borders. But these merely define the sphere in which it should be protecting individual rights. They don't define the land it owns. You can't legitimately acquire land merely by decreeing that you own it. You ask me to specify how Canada doesn't own it, but I think it's more justified to ask: by what natural right do you claim that it does?

Something ought to strike you as wrong about this. Governments claim almost the entire earth's surface. If they really legitimately own this land, then they have the right to use it as the please, and therefore the right to declare any man who walks on it without their permission a trespasser. So where is a rights-respecting man supposed to live in this setup?

In Objectivism, the moral is the practical.

atlascott's picture

"In Objectivism, the moral is the practical."

But what do we mean by practical?  Easiest?  More efficient?  If that's the answer, then the moral is NOT the practical.  This is pragmatism.

The moral is the practical, while respecting the rights of man.

I'm with Wes

Laure Chipman's picture

Shayne seems to be accepting the moral/practical dichotomy in the opposite direction; he thinks he is obligated to only put forth impractical ideas.  If anyone makes a practical (achievable) suggestion, he labels them as immoral!

Wrong again

Wes's picture

You're going to have to point out where I said all that. Incrementalism doesn't imply we're not moving towards the same goal. It's just that I'll be living in the real world while you keep day dreaming away in your philosophers hat.

And as far as thinking goes I haven't heard an original thought from you yet.

Intellect with no reason or maturity

Wes's picture

Shayne, you're intellect with no reason or maturity. Your stridency is apparent in your pompous lecturing tone and the fact that you keep repeating the same facts; taxes are wrong, government doesn't own anything, etc.

Your last comment on buying vast tracts of land is a slap in the face of reality. Go ahead and tell Canada they don't own anything. Excuse me; tell "Canada" that they don't "own" anything.

And it’s hilarious that you'd call another person presumptuous after what you implied about me. I hadn't realized you were so well read that you were already familiar with my resume, calendar, and reading list. Your pompous mentality astounds me. You're like a preacher trying to win an argument by being the first to quote a bible verse.

Shayne, I do not need to be

atlascott's picture

Shayne, I do not need to be "privy" to your reasons to judge whether you are being a little tough.  No harm in that, though.  It is faint criticism.  Being tough when necessary is a virtue.

I never said that I was suggesting anything that was appreciably different than what Rand suggested.  I was more specific insofar as I clarified what income would be taxed, and the consequences for not doing so.  I do not believe that Rand ever specified consequences for folks who do not wish to pay.

I disagree that my suggestion is not a tax.  That is precisely what it is.  It is a legal payment requirement backed by force of law.  It determines a person's legal status in the country.  I wasn'
t quibbling with you, just trying to distinguish between a purely voluntary payment and one required by force of law.

This Canada thing is really very interesting.  I assume that you are a proponent of property ownership, but I may be wrong.  As far as I can tell, no one is disputing Canada's borders, and it is recognized by about everyone as a nation, and its borders are generally respected.  Why doesn't Canada own the land, assuming the purchased parcel is not privately owned?  Why couldn't they sell a chunk to someone, who decided to become a sovreign nation?  I am very interested to read your ideas on this.  Thanks.

The moral is the practical

sjw's picture

I hope you realize that your philosophy--where alleged "practicality" trumps morality--is the exact opposite of Objectivism.

In Objectivism, the moral is the practical. It is moral to deal with men using voluntary exchange and immoral to initiate force; it is therefore practical to respect their rights and inpractical to violate them. That is a central principle of Objectivism. It is in fact a method that drives creativity: since the moral is the practical, if we can't immediately see a practical solution, we still know that there is one and should keep looking. If we are stuck, then it is because we didn't think hard enough.

You operate on an opposite premise, antithetical to Objectivism and common in our culture, the premise that what strikes you as practical trumps morality. You think that the ends justify the means, that if the only way you can quickly think of to fund the government requires pointing the gun at an innocent man, then that's OK--you are free to stop thinking, with the price paid by the innocent man who you force to stop living. If you are stuck, then someone else must pay.

Presumptuous--but good idea anyway

sjw's picture

Since you don't specify where I'm being "strident" for no reason, it's hard to respond to that but it is clear that you're being presumptuous for no reason--you're not privy to what my reasons are for something I might have said, now are you?

It's ironic that you quibble with my terminology. Your suggestion isn't a "tax" either. In fact it looks like a variant of Rand's suggestion to me, in spirit with her suggestion. I like it for that reason, but it's not any less "vague" than Rand's. In fact it's hardly different than Rand's: in her scheme, you tax every transaction; in yours, you're taxing transactions that constitute "income". Which is in effect--all transactions. Doesn't look to me like you've changed her idea at all. No wonder I like it.

Regarding why you can't buy vast tracts of land: you can't buy something from someone who doesn't own it in the first place. By definition, no one owns undeveloped land. "Canada" doesn't rightfully own any of the land in the first place, so "buying" land from Canada is a slap in the face to the concept of rights, not a method for implementing them.

Its more like a choice

Wes's picture

It’s more like a choice between different options on the continuum of choice versus force. With the realization that it’s very unlikely that there will ever be a purely voluntary system, we need to select the option that gives us the most choice.

I think a consumption (sales) tax would be better than an income tax because even in the case of a flat 2% income tax you still have to coerce some people into contributing. The people taking advantage of what is available are the ones burdened with the cost.

But I understand that any system would have to have some kind of enforcement mechanism and other shortcomings. For instance I think corporations should be exempted from this type of system because it becomes more of a transfer tax, which means they'll need to be audited to make sure individual purchases aren't made through a corporation to avoid the tax(Also corporations currently only contribute about 15% of total taxes paid).

But instead of just listing the pros/cons I've already researched I was hoping for some fresh insight here.

I too, think that Rand did

Titan's picture

I too, think that Rand did not develop her economic idea's well enough regarding taxation or government funding. Maybe if she lived longer she could have. If, for instance, there eventually was a government that was paid for by strictly voluntary methods, wouldn't that just be another institution of anarchy vying for its own power? In an anarchy you have thousands of power sects who would vie for the population's money so that they could be paid to do numerous martial and defensive functions. Each in their own way would say,"your money is best spent here for protection because we do X", or whatever. I see the same thing happening with the 'all voluntary' idea put forth by Objectivism. I understand it, but can it work, since every man is an end in himself, he may choose not to fund the all voluntary and put his money in another 'protective' service, which in turn may have disagreements with another. Another big question is funding. Would there realistically be enough money to fund the national defense, police, courts from only those who paid into it? Let's face it, there would be lot's of questions of equity eventually by those supporting the system while the others get a 'free' ride. Yes, I know it's in everyone's best interest, but eventually you'd have some angry rich people who may choose to stop supporting the government with their money.Unless humans are gods with with well nigh perfect Objectivist ethics, in my honest opinion there is going to have to be taxes through force. So, the question remains; which tax is the evil of two lesser's?

A tad strident

atlascott's picture

Shayne, you're a smart guy, but rather stident for no reason.

If tax is voluntary (i.e., no force of law), it is not a true tax.  A tax must be REQUIRED BY LAW to be a true tax.

I agree with the fellow who said that Rand's ideas about appropriately funding a moral government are vague.

If national defense, police, courts, and some compensation to elected officials and government employees are essentially the only legitimate functions of government, I am skeptical that completely voluntary contributions of any type would allow the government to sustain itself.

Rather than devise some elaborate scheme, I see no huge problem with something on the order of a 2% flat income tax.  Something should be written into the Constitution ensuring that it would always be the only form of government tax, it would alwyas remain flat, and could never exceed
a certain single digit percentage, except in times of war, at which time a national vote would be required every 6 months to maintain any increased tax rate. Citizens can either agree or not not be citizens.  Want to vote?  Have access to the Courts?  Have full access to the police and emergency services?  Agree to the tax.  It is a contract between the government and citizens.  Either you accept the tax or you have no citizenship rights (i.e., you are in visitor status).

Why COULDN'T someone with a few billion to play with buy some land from Canada, or somewhere in the Carribean or Central America?  Step One--sign a mutual defense treaty with Democratic neighbors.  Step Two--spend some of that tax money on a well-trained, state of the art fighting force. (See Israel).  I agree that there is a risk of invasion.  But it is small if you follow the two steps above.  WHY would the US or Great Britain be hostile towards a new, free nation?  Why wouldn't they do everything they could to be helpful to their tiny neighbor?

Bullet points bad?

Wes's picture

Wow, great argument. Wasn't Rand able to distill her entire philosophy into four bullet points?

Does my question about the criticisms of a consumption-based tax system at least have some merit? Of course the gov't shouldn't be coercing taxes and that it’s the worst agency for managing their dispersion, but incrementalism is the only way anything is going to happen.

?!

sjw's picture

My god man, it's in VOS! For the life of me I do not understand your mentality. Why read someone else's bullets when you can read Ayn Rand's own thoughts on the subject? For that matter, why read this site at all when there's all this wonderful material that Ayn Rand wrote that you haven't read yet?

Wrong theory

sjw's picture

Andre: You seemed to miss the point I made about this so let me try to state it more clearly.

The basic contradiction in your idea is between the nature of a government as being sovereign in a given geographic area (like the North American continent) and the fact that no human or collection of humans can legitimately claim to own such vast tracts of land. You might be able to try your idea out on a tiny island, but as a matter of principle it cannot work on a continent.

A little background please

Wes's picture

I know it was mentioned a few times but what are the bullet points for Rand's tax system?

What are the criticisms of a consumption-based tax system?

free society

Rick Pasotto's picture

A free country is a contradiction in terms.

The goal is a free society, i.e., one where private property is respected.

Very well.

Joe Idoni's picture

My argument, Andre, was against involuntary taxation. But since we are speaking in the hypothetical, IF 100% of the population were to agree to paying taxes, then no, it would not be wrong. However, you suggest penalties for those who do not wish to pay taxes. This could be viewed as a form of contract enforcement, but at the same time, you are not responding to my query about those who would prefer not to receive such services. Additionally, contract enforcement, as the proper function of government, is restricted to two civilian parties, therefore would not be subject to government. And as such this hypothetical is moot.

Secondly, I am a citizen, and in that respect you are correct that I am like almost everyone else today. I do not own land, but I do have property, which is a semantical argument. I am in no way, shape or form an equal partner member of any country. Our populace is far superior to early America, but I will not concede that our government is. And I did not help create this government, nor did I help write the constitution, nor did my ancestors. I am dissapointed that you would suggest that my citizenship implied a social contract.

Thirdly, it has already been explained that the percentage is scale-based. It has also been explained that as such, it requires the government to involve itself in your personal affairs, namely the amount of money that you make. This is nobodies business, as it involves a contract between my employer (or customers) and myself. It is a private contract and affects none but those DIRECTLY involved.

As such, I only pay taxes in the United States, because A.) I live here and do not wish to live anywhere else for the time being, and B.) Failure to do so will result in my incarceration at worst or at best, the seizure of my assets. This is most certainly not resultant of me signing a contract. To suggest otherwise implies that the government is in some way entitled to the fruits of my labor.

Furthermore, even if I were to agree to pay some form of voluntary governmental insurance for products and services that I do use or consider it possible that I will use, i.e., Police, Fire, Courts, Roads, etc, I would still not consider myself contractually obligated to do so. These would be services that I would pay for willingly and at such a time as I was able. The amount I pay would be up to me, much as any insurance would be, much like life insurance, car insurance and such others. This could conceivably be tailored to involve such things as deductibles and coverage amounts. For instance, if I had no contracts, then it is conceivable to me that I would not need insurance for governmental contract enforcement. I do need roads, which I do not recall ever being mentioned, but since they cross state and even country lines, I would willingly pay the fee to the government proportional to my usage. But since it would be their property (by proxy), it is in their right to determine the costs which they may charge.

Idoni

A Theory of Freedom

Kyrel Zantonavitch's picture

The issue here is hypothetical and not necessarily practical. It's an attempt to get the idea of a wholely free country right in theory. In my judgment, there's a strong argument to be made that even odious taxation is not necessarily coercive and evil. If it's written into the Constitution and 100% of the population agree with this, Where is the tyranny?

Joe I' wrote:

"If you engage in this hypothetical contract with the original land owner, then you are effectively signing a social contract. In said contract, you are agreeing to pay for a service that you may not even want, or not want to pay for. Perhaps you feel as though you could find a better solution to resolve grievances, such as independent arbitration (in so much as a contract violation) or self-defense (possibly degenerating to vigilantism). The problem is that under the terms you suggest, at best you are engaging in a partnership, in the middle it's a rental agreement, and at worst you are a prisoner."

As far as I can tell, you're a citizen of a country, exactly like everyone else today. There's no "partnership" or even "social contract" involved. You're a full normal land-owner. You're an equal partner member of a country which has a government which is far superior to even early America, and one which you helped create and in which you helped write the Constitution.

Joe I' also wrote:  

"If your contention is that those not wishing to abide by these terms need not purchase the land, does that not in some way invalidate your hypothesis?"

Not at all. I'm talking about a government/country which people freely join and immigrate to of their own will, and in which 100% agree to pay 2% in taxes to the government (which they in turn have full normal political rights to participate in, as America today).

Law a hypothesis does not make (fortunately)

Joe Idoni's picture

Andre,

Shayne is correct. If you engage in this hypothetical contract with the original land owner, then you are effectively signing a social contract. In said contract, you are agreeing to pay for a service that you may not even want, or not want to pay for. Perhaps you feel as though you could find a better solution to resolve grievances, such as independent arbitration (in so much as a contract violation) or self-defense (possibly degenerating to vigilantism). The problem is that under the terms you suggest, at best you are engaging in a partnership, in the middle it's a rental agreement, and at worst you are a prisoner. And all to your own agreement!

Maybe Ayn's ideas on correct taxation are not as complete as necessary, but they do far outweigh the aforementioned options as valuable (and viable) options.

If your contention is that those not wishing to abide by these terms need not purchase the land, does that not in some way invalidate your hypothesis?

Idoni

Further, that free rider is

Robert Malcom's picture

Further, that free rider is even more the myth when considered as 'illegal' immegrants, who come in this country, work, pay for their supplies [including the sales taxes, etc] and not otherwise pay out to the government... they're in effect an uncounted gain...

Where will this work?

sjw's picture

Andre: Just where are you going to do this? Most of the usable land on the planet is claimed by some government. If you "buy" some land and declare that you're your own country, you're just asking for them to bring in the SWAT teams.

Even if your solution were feasible for some tiny island, it's not going to work in general, and it's therefore not interesting. But if you want to go buy some tiny island or big boat and try to get some people to follow you there, be my guest, I wish you well in your experiment, and I promise to feel sorry for you when some government comes in and expropriates everything you built out from under you, but I won't say I didn't warn you. This isn't the 1700's.

No Entiendo

Kyrel Zantonavitch's picture

Shayne: I really don't follow. We're talking about legitimately acquired land in which the owners jointly declare themselves an independent and free country.

The Free Rider Propaganda

sjw's picture

The free rider "problem" is just propaganda statists use to further statism.

It is true that any capitalist system would permit these so-called "free-riders". Heaven forbid that a man would walk the earth on his own terms, without having responsibility to other men enforced at gunpoint! Can't have that now can we!

So what if some man decides to build a secluded cabin up in the woods on "your" continent, refusing to interact with the culture in general? So what if he benefits from the fact that he's mostly safe from the criminals who are in your jails or the enemy nations kept at bay? He benefits--sure. But he's not draining your resources. If the man didn't exist, it would cost just the same amount to keep your country secure. By what right are you giving him the "benefit" of his "protection" by sticking a gun in his back and demanding that he pay tribute to you?

Even with people who like to point guns at other men and demand payment, *I* still would not want to be cut off from society like this hypothetical man in the cabin (though I can understand why he would want to be when almost everyone--including "Objectivists"--are statists at heart). These "free riders" are definitely a tiny margin--most people would participate normally in a capitalist economy.

Again, the concept exists for a single purpose: to further statism, to further the evil altruist idea that a man has an inherent obligation to other men just because he is born and walks the earth. At root, the free rider propaganda is the worst kind of altruism.

Doesn't scale

sjw's picture

Andre: A country isn't a country club. No one can lay claim to an entire continent. Indeed, the *Objectivist* conception of land ownership requires *development* of that land. If you just declare that you own an island or continent and expect everyone to respect your declaration, you can expect a fight not a free country.

Sales Tax

Laure Chipman's picture

Erik, I can't put aside Objectivism's stance on taxation, because I think the idea of paying for any government services we use makes a lot of sense.  We are still left with a "free rider" problem in that many people would choose not to pay for national defense but would benefit from it nonetheless.

As for what I would personally prefer, if we don't go the route of "user fees", I would favor a national sales tax to replace the income tax.  Of course, the big practical problem is that we would probably end up with a plan to phase out the income tax while phasing in the sales tax, and we would end up with both! 

The thing that irks me the most about the income tax is all the minute details of my financial life, that are nobody's business, that I am required to submit.  Not only do I have to write a check every year, but it's MY job to figure out the amount!  I would prefer to just receive a bill in the mail!  So, practically speaking, I think a sales tax is much less onerous.  It's easier to figure the amount, and the burden of doing the figuring does not fall on the consumer.  Most states already have sales tax, so companies already have some systems in place to deal with them.  A sales tax does not punish people for making money.  We would not have to submit any personal financial information every year.  We wouldn't be in the uncomfortable situation every April of having to lie, or "inflate" expenses, in order to protect our own money.

Brazenly Causing an Uproar ;-)

Kyrel Zantonavitch's picture

Shayne W' writes:

1. I think it is misleading to claim that these people would ever own the land they bought. The original owner sets the terms of use, he therefore owns it and they use it with his permission. I also wonder what kind of laws are going to be put into place to make sure that the citizens are really paying the 2%. And I wonder what forms of expropriation of their property might happen when you kick someone off who only paid 1.9%. A big gaping hole here is the conflict of interest created by having the government also be the property owner and benefactor of everyone's 2%.

Once a Declaration of Independence is made, previous land-owner status becomes irrelevant. The state's 'creator' would have no special legal status or rights whatsoever. And all taxes would be paid to the government, not him. 

As for people who don't pay their taxes, I imagine normal penalties for theft and/or tax evasion would apply. Small-time thieves would maybe have their wages garnisheed or property seized (and then sold at fair market price to satify their debt). Big-time thieves would probably go to jail. Outright traitors would likely be deported. In every instance, justice would prevail. Even America largely gets the above right, so I really don't see how underpayment of taxes would be a special issue in a purely liberal state.

And my initial challenge remains: Are taxes really and truly an act of robbery and tyranny if all would-be immigrants are informed of their legal obligation to support the government financially prior to immigration and they formally agree to this provision (which is part of the Constitution)?

I actually had this discusion many years ago on the old Atlantis/WeTheLiving.com website. I called it the "country as country club" argument. To me, at least, it certainly seems like the organizers of a country club have the right to create their own club rules and then enforce them. People who don't agree with the rules should never join in the first place, and are basically guilty of fraud if they do. In turn, if they come to disagree and can't get other club members to change the club rules, then it's incumbent upon such dissidents to respectfully quit the club or else be kicked out. Countries seem very similar.

As a matter of fact -- and not to create a ruckus or anything but Eye -- it's actually possible to argue that even a military draft is not coercion! All would-be immigrants could be informed that in addition to a legal obligation to pay 2% in income or sales or VAT, etc., they also have to serve one year in the military! 

Thanks

sjw's picture

Well that's quite a compliment, thank you. No, I don't have any book plans.

Proportionate

sjw's picture

Pete: It'd be proportionate, and I don't see that as being a problem, it's perfect for the reasons Andre pointed out (those who are transacting more values are getting more benefits, therefore they should pay more). And you don't have to reveal the transaction if you don't want to--only if you want it covered. To expect services without asking or paying for them isn't rational.

And really, you should read Ayn Rand's arguments on this before arguing about them here.

Wouldn't that be a de facto income tax?

Pete L's picture

Shayne,

Would the contract insurance charge be proportionate to the size of the transaction, or would it be a flat rate? In any case, I see some inherent problems.

If it's a percentage of the transaction, then it seems like it would likely turn into a de facto income tax. For example, I can't imagine a rational individual entering into a contract with an employer (or vice versa) without the insurance, and therefore the insurance agreement would have to reveal your income to the government, would it not? Same thing when you establish a bank account or hire a financial advisor.

If it were a flat fee, wouldn't this create a situation where insurance costs for a routine transaction at the grocery store would be same as those for a multi billion dollar coporate merger? Obviously, the cost to mediate a dispute the those two scenarios would vary greatly.

You seem like a sharp

Titan's picture

You seem like a sharp fellow, Shayne. Ever thought about writing a book?

Not compromise

sjw's picture

I don't see it as compromise. I mean, if a thief is going to take everything you own, and then you figure out some way to keep some of it from him, that's not compromise. It's not like you're declaring that thievery is good just because you kept some of your stuff!

Also I think it's pretty much a given in politics that incremental changes are all you can do unless you're going to start a revolution. So an attitude that incremental changes were "compromise" is really some sort of Platonic one not Objectivist since it puts the goal completely out of our grasp.

Two problems

sjw's picture

Andre: I see two problems:

1. I think it is misleading to claim that these people would ever own the land they bought. The original owner sets the terms of use, he therefore owns it and they use it with his permission. I also wonder what kind of laws are going to be put into place to make sure that the citizens are really paying the 2%. And I wonder what forms of expropriation of their property might happen when you kick someone off who only paid 1.9%. A big gaping hole here is the conflict of interest created by having the government also be the property owner and benefactor of everyone's 2%.

2. The island idea has nothing to do with the general problem Ayn Rand was trying to solve, comparing them doesn't make any sense.

Small Private Property Island or Tract

Kyrel Zantonavitch's picture
Shayne: The idea I had in mind was a small island or contiguous tract of land legitimately acquired and wholely owned by one person or one corporation. Then would then sell parcels of land to whoever they chose, and whoever wanted to buy it and agreed to obey 100% libertarian laws and pay 2% in taxes. All land would be private property (except perhaps for some tiny chunk where government officials worked) and all citizens would voluntarily agree to abide by the above two fundamental, founding rules (or they wouldn't be allowed to become citizens).

As for kids, they naturally possess lesser rights than adults (as today in the West), and would be somewhat in the power/control of their parents until about 16 or 18 (as today), after which the new adults must either formally, contractually agree to the above Constitution or else be deported, but not jailed.

Rand's solution

sjw's picture

Andre: I think Rand's solution was brilliant and would work just fine in practice. She did not put it forth as the best possible, but I don't think she was unconfident that it would work.

Regarding your chief question: The rights violation comes in because the government would lay claim to vast tracts of land (the whole continent), and put people in jail for living there without paying the tax. Then there are lesser issues, like a child being born and being forced to conform without actually having agreed to the terms.

You want to say: "Well, you don't have to live here if you don't like it"--as if the government *owns* the continent, and everyone lives there only by permission. So the basic problem is that in your system, no one owns his own property. The government owns all the property, and just gives permission to people to use it if they pay the tax.

Then there's the practical problem in the fact that you'd never get 100% of the people living on the continent to agree to your terms when you initially set up the government. I know I wouldn't agree. So what do you do then? Kick me off by majority vote? That'd be a form of dictatorship not Capitalism. If you just let me stay then it'd not be the system you propose.

No

sjw's picture

The basic solution involved paying "insurance" if you wanted a given transaction (e.g., paying a grocer by check) to be enforcible by the government. You wouldn't have to buy the "insurance" if you didn't want to, but for most transactions between strangers reasonable people would. It'd be a voluntary tax that most people would pay for most financial transactions.

Flat Income or Net Worth Tax

Kyrel Zantonavitch's picture

Shayne: I misspoke (mistyped): I do favor a flat tax (i.e. a uniform percentage tax). But Rand's government revenue solution was very brief and undeveloped -- and put forth with little evident force and confidence. Lotteries and contract insurance strike me as poor revenue raisers, as well as being rather inequitable and injust.

But my chief question and challenge remains: Is it really and truly tyrannical and thieving if a given group of people start up a pure freedom country, but then stipulate up front that there is a kind of maintainence or user fee of 1-2% (based on income or net worth) to be paid by all, or you can't enter the country or become/remain a citizen. In this example and system: Where is the coercion and individual rights violation?  

Was a lottery Rand's solution?

Pete L's picture

Shayne,

I don't have a copy of VOS on me right now. Was Rand's solution essentially a lottery? That's what I seem to recall off the top of my head.

Flat tax & Ayn Rand

sjw's picture

Andre: I agree that the rich have more to loose and are thus getting more value from government services in some sense. But A flat tax is a flat percentage not a flat amount, so it scales. I don't see why you're claming that it's unjust to the poor any more than it is to the rich.

Regarding the net worth taxation idea: For the life of me I don't know why you are ignoring Ayn Rand's suggestion. The problem you are trying to solve here is already solved by her solution, and unlike yours, does so without privacy violation or initiation of force.

Non-Punative Income Tax or Net Worth Tax

Kyrel Zantonavitch's picture

Rick P' makes the point:

"Can you name some good or service that is offered on the market that is priced according to your income? Of course not. The grocer doesn't charge you more because you have a high income (though you may spend more on groceries).

"The amount of my income is no one's concern by my own. An income tax is necessarily an invasion of privacy."

But is government really a good or service offered on the market? In my view, the more income you have, the more you have to lose. The more bad guys seek to attack your property, the more government protection you actually need to safeguard it.

The other alternative that occurs to me -- and here I'm really hoping other SOLOists have insights keener than my own -- is a tax based on net worth. This too, of course, results in a certain loss of privacy. But maybe this information could only be shared with the government -- not your friends and neighbors -- and a law passed to this effect, backed with serious jail time for any government agent that discloses confidential financial information. 

A net worth tax, like an income tax, seems to have solid logic on its side in that those with a fortune stand to lose a lot more if local criminals or foreign invaders come calling. The wealthy are simply more of a drain on the police and military than the poor, plus they have more resources to pay taxes, so it seems like a flat tax or per capita tax is highly injust. 

(By the way, I'm a great believer in the importance of proper language. That's where many, or even most, intellectual battles are won and lost, IMHO. Thus a "progressive" income tax is more accurately and truthfully called a regressive or punative income tax. Economic "protectionism" is more accurately called economic destructionism since virtually all people lose or are monetarily 'destroyed' a bit by this policy, etc.)

Good answer, Shayne. Even

Ross Elliot's picture

Good answer, Shayne. Even small changes in policy on the side of liberalism is a *good* thing although to many puritans it seems like an act of apostasy to even consider being involved in such shameless compromise. I've said it many times: the socialists got us where we are *incrementally*. They never took their eye off the ball. They lost a few battles along the way but there's no denying that they've been winning the war for some time. And just when we thought we'd shafted them with a crumbling Berlin Wall, the slippery buggers turned to environmentalism, political correctness and neo-Fabian "third way" politics to achieve their aims. It pays to be sneaky Smiling

Any compromise between good and evil results in a victory for evil. Sure, but it can work the other way too.

Bad question

sjw's picture

Contrary to popular opinion, there is such a thing as a stupid question. Arbitrary hypotheticals being a common class of them.

We don't have to have taxes--they are man-made not metaphysically given. There is no such thing as a "good" kind of rights violations. The only good thing would be to gradually repeal bad things. Repealing graduated taxation would be a good start, but that doesn't make a flat tax "good".

Rick, I was posing a

Titan's picture

Rick, I was posing a hypothetical question.

Good theft?

Rick Pasotto's picture

Erik, what kind of theft would be moral in achieving a free society?

Can you name some good or

Rick Pasotto's picture

Can you name some good or service that is offered on the market that is priced according to your income? Of course not. The grocer doesn't charge you more because you have a high income (though you may spend more on groceries).

The amount of my income is no one's concern by my own. An income tax is necessarily an invasion of privacy.

What would be a good kind of

Titan's picture

What would be a good kind of tax for the transition from the mixed economy to a Capitalist economy?

Ayn Rand already answered this

sjw's picture

Why put away Objectivism's position on this? Ayn Rand addressed how to properly fund a government. See VOS.

I think a better question is: what would be a good kind of tax for the transition from the mixed economy to a Capitalist economy. A flat tax would be less pernicious than the graduated income tax (which punishes success for being success).

Andre,I agree that a very

Pete L's picture

Andre,

I agree that a very low flat tax such as you describe would be much more preferable to what we currently have today. No matter what way you slice it - income tax, "sin" tax (such as I proposed) - it is coercion. What troubles me about the income tax is the tendency to make it progressive, thereby punishing the productive.

Income Tax

Kyrel Zantonavitch's picture

Virtually all libertarians and Objectivists that I know seem to consider an income tax an abomination -- but I really don't see why. If a person makes X dollars, it seems like he needs about X worth of protection for his life, liberty, and property. If he makes 100X, it seems like he needs about 100X worth. Seems equitable and fair to me...

But is it really clear that taxation is theft, coercion, and politically evil? What if someone started up a new pure freedom country and said no one could join unless he formally agreed to obey all the libertarian laws and pay 2% income tax as a kind of fee for services rendered?

  

I could live with the following....

Pete L's picture

Legalize all recreational drugs and put a sales tax on them, but not to the point that a lucrative black market is created. Perhaps do the same with prostitution.

Hmmm...

Summer Serravillo's picture

I would like to tax legislators for each piece of legislation they author, sponsor, support and/or vote for.  The amount of the tax would be equal to 10 times the cost of the of the new legislation, divided by the total number of legislators that voted for it. 

 

Then I would tax the executive that signed it into law, at a similar rate plus a month in solitary confinement at a federal prison of his choice.

 

I'm kidding, of course... but only half...

 

Summer

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