Objectivism and Paul McKeever’s Theory on Taxation

April 3, 2008 by · 11 Comments 

In response to my reply concerning the issues of government employment and government hand-outs, my facebook friend wrote, in part:

…I was also inexplicitly referring to your YouTube video on taxes and government where you, as far as I can remember, argued that charging people for protecting them could not be considered immoral.

I replied as follows:

I think I know the video (youtube title: “In Defence of Ayn Rand #4: Rand, Anarchism, and Taxes“) to which you are referring [NOTE: my facebook friend might have been referring, alternatively, to my Freedom Party video titled “Taxes, Justice and Wolfe“, in which I discuss the difference between sales taxes and other taxes]. In it, I briefly outlined some thoughts I was having (and continue to have) about whether there is a kind of tax that is not immoral. The general thrust of the rationale there was that:

1. According to Ayn Rand’s philosophy, one is likely not to make an objective assessment of the facts, evidence, guilt/innocence, and nature/degree of penalty where one is a victim of the wrong in question. Hence, government has a monopoly on law-making (and, as a result, on the justice system), thereby putting the retaliatory use of force under objective control. According to Ayn Rand’s philosophy, you should not go after the guy who you think is responsible for the theft of your TV. You should instead call the police and file a report.

2. Because Ayn Rand’s philosophy regards it as wrong to take the law into your own hands (except in the case of defending yourself from immanent harm/loss), it is right for the task to be delegated to others who have no personal involvement in the wrong in question; people who will be more likely to judge objectively and dispassionately. The people who fill those roles, in Ayn Rand’s philosophy, are part of the government.

3. According to Ayn Rand’s philosophy, it is wrong to trade the value of ones productive efforts for (a) a disvalue, or (b) no value at all. Therefore, it is wrong to act as police officer, judge, or warden without getting paid, and it is wrong to force someone so to act. In short: members of government should be paid to do the work that morality requires be done by them instead of by the victim.

4. This is where my theory of taxation/government finance enters the issue:

(a) if the victim can choose and pay for his own police officer, judge/jury, warden etc., those people’s continued living will depend upon delivering results that their payors – i.e., victims – want. The police, judge, warden etc. – to whom their tasks are delegated only because they are presumed to be unbiased, impartial, dispassionate, reasonable, etc. – would be paid in a way that discouraged them from being unbiased, impartial, dispassionate, reasonable, etc.. In legal lingo: they would be place in a conflict of interest (I use that phrase to represent a different conflict than that discussed by Ayn Rand in her essay about “conflicts of mens interests”). In short: if the victim is the person paying the delegates, the purpose of delegating is defeated.

(b) if, on the other hand, the police, judges, etc. are paid from a single fund, controlled by the government, then the purpose of delegating is not defeated: the police, judges, etc. have no particular reason for being biased in favour of the alleged victim or the alleged criminal.

(c) if it is morally required that we delegate; if it is morally wrong to require delegates to work without being paid; and if the purpose of delegation is defeated when the victim pays the delegates, but not when the government pays the delegates, I propose that it is right to pay into the government fund that pays the delegates.

(d) It is wrong, in Ayn Rand’s philosophy, to mooch or loot. To receive the value of policing, judiciary, etc. services without paying into the government fund that pays them would be morally wrong.

(e) Therefore, in the video, I propose the germ of a theory that it may be morally right to use force to obtain from such a moocher/looter his portion of the monies paid to the judges, police, etc.. This does NOT imply that it would be right to use force to require a person to pay for non-justice matters (e.g., health care, education, etc.): such use of force would be wrong.

(f) Finally, in the video in question, I discuss what sorts of taxes might achieve that result without resulting in an injustice. In that video, I exclude every tax except one: a sales tax. The reason: every sale involves the formation of a contract, and it is wrong for the contracting parties to take the law into their own hands should a dispute arise concerning the contract. In other words: it is a proper function of government to resolve such disputes (i.e., in the courtroom, pursuant to objective laws). Therefore, a sales tax amounts to a fee paid for the right to use the government’s services to resolve any dispute that might arise concerning the contract of purchase and sale. If one buys little, one creates few contracts and fewer possible demands upon the court’s services, so one pays little. If one creates a great many contracts, or creates contracts that are more likely to be litigated (e.g., purchases of land are more likely to be litigated than purchases of bubble gum) one pays more. Yet the “more” is achieved without arbitrary rates: a sales tax typically involves a single rate being applied to any price.

(g) For the greatest certainty: Ayn Rand did not make the argument I propose here in point 4. If it is a rational implication of Ms. Rand’s philosophy, it is to my credit. If it is not a rational implication of Ms. Rand’s philosophy, it is to my discredit alone, not to hers and not to the discredit of her philosophy.