A government is supported under capitalism through voluntary financing methods.
The removal of all taxation would be the last step to implement in the transition to a free capitalist society. The costs of a proper government — with an army (engaged only in self-defense and not imperialism), a court system, and a police force — are very small, and easily paid for by voluntary financing methods, such as insurance on contracts. Other methods are used by nonprofit agencies, like churches, to raise billions of dollars. Observe how one “know nothing capitalist” Ted Turner recently gave a billion dollars to a useless, anti-capitalist organization like the United Nations.
Comments Ayn Rand in “Government Financing in a Free Society”:
Any program of voluntary government financing has to be regarded as a goal for a distant future. What the advocates of a fully free society have to know, at present, is only the principle by which that goal can be achieved.
The principle of voluntary government financing rests on the following premises: that the government is not the owner of the citizens’ income and, therefore, cannot hold a blank check on that income—that the nature of the proper governmental services must be constitutionally defined and delimited, leaving the government no power to enlarge the scope of its services at its own arbitrary discretion. Consequently, the principle of voluntary government financing regards the government as the servant, not the ruler, of the citizens—as an agent who must be paid for his services, not as a benefactor whose services are gratuitous, who dispenses something for nothing. [The Virtue of Selfishness]
Only if one wants to turn government into an engine of the welfare state/new world-order (‘one country, with one big leash tied around its neck’, with the untouchable bureaucrats of the ‘United Nations’ holding the leash), do voluntary methods fail to work.
Most people (not all) would voluntarily give 5 or 10% of their income to support a government that protects rights; practically no one would give 50% to 90% of their income to support a mixed economy/welfare state, which is why the government threatens the use of force to physically take your wealth away from you.
Who would want to voluntarily pay for that? Perhaps a few people would, but they are the ones who think that they will get to hold onto the leash.
“A heavy progressive or graduated income tax.”– Plank 2 of the Communist Manifesto
”It must be remembered, that the rich are people as well as the poor; that they have rights as well as others;that they have as clear and as sacred a right to their large property as others have to theirs which is smaller; that oppression to them is as possible and as wicked as to others.” — John Adams
“Fairness”, as used in today’s political discourse, is an “unfair” word that can have many contradictory meanings. The proper meaning of fairness is the application of justice. Justice is not what advocates of “fair taxation” are asking for. What they are asking for is not equal treatment under the law for all individuals, regardless of race, gender or income. What they are asking for is unequal treatment before the law. They are asking for the state to violate the inalienable rights of some individuals, to discriminate against them, because they are “rich.”
What so-called “progressives” mean by fairness is a form of injustice known as egalitarianism. According to egalitarians, it is unfair that some people are richer than others — regardless of whether that person honestly earned their wealth through hard work and industry, or whether they robbed a bank; whether they obtained their wealth through economic production or political graft. This does not matter. The fact that some people are richer than others is proof of unfairness, since in their view everyone should be equal — not politically, but existentially. Equal, that is, not in their right to life, liberty and property; but equal in results.
As people are not of equal ability — some are more intelligent, some are more ambitious, and some are more hard-working than others — under a system of equal rights and equal freedom — capitalism — some people will become more wealthy than others. According to progressives, it is the government’s job to remedy this “defect.” Or, in the words of Karl Marx and Frederick Engels: “From each according to his abilities, to each according to his needs.” In practice, this means in today’s “mixed economy” a progressive government’s job is to “redistribute the wealth” of those with ability to those who can garner enough votes.
A progressive “fair” tax is nothing more than “Jim Crow” reasoning applied to wealth creation. It discriminates and punishes an individual, by treating people differently not based on the color of their skin, race or religion, but based on how much money they make. It is thus a clear violation of their property rights. Or, in the words of American Founding Father, John Adams:
It must be remembered, that the rich are people as well as the poor; that they have rights as well as others; that they have as clear and as sacred a right to their large property as others have to theirs which is smaller; that oppression to them is as possible and as wicked as to others.
Yet it is the principle of equal treatment under the law that a progressive “fair” income tax violates. Writes Arthur Mode,
Most Americans accept the idea that if two men commit the same crime, they should receive the same punishment. Equal treatment under the law for criminal offenses is considered just. If a Congressman were to propose that, for the same offense, Hispanics should be given longer jail terms, or that Catholics should never be subjected to capital punishment, he would be hooted down.
When the subject changes from criminal to tax law, the concept of equal treatment under the law suddenly goes halfway out the window. Halfway, because there would be no support for taxing some groups differentially, e.g., higher rates for certain religious groups, racial groups, or genders. Such unequal treatment is still viewed as wrong. But equal treatment does go out the window when one group is mentioned: the rich.
The graduated “fair” tax is in fact an envy tax, not motivated by love for the poor, but for hatred of those who are not. Or, in philosopher Ayn Rand’s words, “hatred of the good for being the good.” If progressives were truly concerned with the poor they would cry out for more freedom. Instead what they have created is a spoils system where pressure groups battle politically to decide what to do with other “people’s” money.
One feasible alternative tax system, in today’s intellectual climate, is a just tax. A more just income tax system would not be a “progressive” discriminatory tax, but proportional, i.e., a “flat” tax. Under such a system, a wealthy man would pay the same percentage as a man less wealthy man. Now in total amount the rich man would pay more, i.e., at 10% tax rates a millionaire would pay $100,000, whereas an unemployed person would pay nothing, but both would be treated equal under the law.