by Jason Stotts
The pivotal essays for the Objectivist position on taxation are “Man’s Rights,” “The Nature of Government”, and “Government Financing in a Free Society”, all of which can be found in The Virtue of Selfishness. In these essays the Objectivist position is clear: each individual person has inalienable rights from his nature and that it is the function of the government to protect these rights. As a consequence, the Objectivist position on taxation is that it is a violation of the function of government, as it is an initiation of force on the very citizenry that it is supposed to protect. This essay will seek to analyze this position to ascertain whether it is, in fact, self-consistent, rational, and whether it can justify a blanket condemnation of taxes.
Let us begin with the essay “Man’s Rights.” Rights, Ayn Rand argues, are the “extension of morality into the social system” (109). This is important because she wants to stress that “a ‘right’ is a moral principle” (110) that “pertains only to…freedom of action” (110). This puts the Objectivist theory of rights into the camp of what is called “negative rights”, or rights which cause no obligations on others except for their non-violation. This is contrasted in philosophy with systems of positive rights that do cause obligations on others. For objectivism, rights are the “conditions of existence required by man’s nature for his proper survival” (111). It is important to note here that Ayn Rand does not mean that rights are the necessary conditions for mere physical survival, but intends a richer conception of what it means to be alive as in the Aristotelian tradition of flourishing. Thus, the Objectivist position on rights is that they represent a negative obligation on the part of people not to violate the necessary conditions for the flourishing of others.
In order to make these rights a reality and to preserve these conditions, men need a government to institute these rights as law (more specifically, they would be the basis of law). For this reason, Ayn Rand insists that: “the protection of individual rights is the only proper purpose of government” (128). The way in which the government is supposed to do this is through prohibiting the use of force, whether initiatory or retaliatory, since the use of force is the only way to violate the rights of others. For Objectivism, this puts the government in a different position that most other political theories: “the government is not the ruler, but the servant or agent of the citizens” (129). In order to achieve its end of protecting rights, a government needs to perform certain functions that “fall into three broad categories, all of them involving the issues of physical force and the protection of men’s rights: the police, to protect men from criminals – the armed services, to protect men from foreign invaders – the law courts, to settle disputes among men according to objective laws.” (131).
Now, obviously in order to fulfill these functions, the government will need to spend money and in order to spend money, the government must first raise money. But how can the government do this? This is a problem for Objectivism because “the imposition of taxes does represent an initiation of force” (135) and this would defeat the very function of government. Thus, Ayn Rand had to maintain that: “in a fully free society, taxation – or, to be exact, payment for governmental services – would be voluntary” (135). In order to show how such a voluntary system might be effected, she gives the example of a government paid through the use of optional percentages on contracts. In her example, only those contracts that paid the specified percentage would be legally enforceable in courts. The problem with this is that if it is necessary that the government perform certain functions, then they need to do this in all cases as a matter of principle. To not enforce a legal contract because the parties did not pay a fee is like not prosecuting a rapist because his victim did not pay for governmental rape insurance. A government that only sometimes protects rights is not a true government.
We have seen that rights stem from the necessary conditions for human survival and that a government is necessary in order to secure these conditions. If this is the case, then it seems as though there could not be a blanket condemnation of taxation, since it is in the rational best interests of each citizen in order to pay taxes so that his rights are protected. To me, it seems that Ayn Rand was on the right path when she suggested a fee on contracts. The simplest way to achieve this would be to levy a percent tax on all sales, since sales are legal contracts that must be upheld by the government. This tax should be sufficient only to cover the costs of the governmental operations in protecting the rights of the citizens (in all three functions) and to maintain a small treasury that could be expended in case of an emergency. In this way, the tax would only represent a payment to the government for necessary services that all citizens objectively need.
While it is clear that redistributionary taxation is immoral, and is clearly the initiation of force by the government against those it is supposed to protect, it is not clear that taxation for supporting the government in its necessary functions is morally problematic. If the initiation of force is the only way to violate rights, and rights are moral principles that represent the necessary conditions of human flourishing, and it is necessary that a government exist to protect rights, then it seems that a government is also a necessary condition of human flourishing. If this is the case, then it seems as though reasonable people would want a government to protect their rights.