Public Finance According to the Atlas Society

Am I the only person who finds it puzzling that people who insist that they believe in the legitimacy of government, but in five decades have not coherently been able to explain how they intend to fund it, insist on trashing the only mechanism that exists for funding it–while bitterly criticizing people who demand the unearned?

The title of the article in the second link is, “On Tax Day, What if Atlas Shrugged?” Here’s my question: On Tax Day, what if an article about taxation by The Atlas Society made minimal sense? How about any day (or any topic), come to that? Frankly, I’m not sure which event is more likely to take place.

Incidentally, I’d like to thank my accountant Vikrant K. Kapila, CPA for making Tax Day more bearable than it would be if I actually had to do my own taxes.

5 thoughts on “Public Finance According to the Atlas Society

    • How would I fund government? For the foreseeable future, by taxation. By the way, for all of their huffing and puffing, that is ultimately their answer, too. They can blather all they want about how taxation is theft, but someone should ask Ed Hudgins, “So should we abolish the IRS and all of the agencies of taxation and all of the state and local taxes tomorrow, and replace them all with a gigantic gluten-free bake sale for Uncle Sam?” I’d love to hear the answer.

      Even in the ideal future, I’d say government has to be funded by some form of taxation. The issue is not, as Hudgins claims, that taxation is theft. The issue is how to ensure the consent of the governed. My view is that it has to be done by some form of social contract, by analogy with (or on the model of) the naturalization of foreign born citizens (i.e., on the model of people born elsewhere who are naturalized into citizenship by an act of explicit consent or allegiance to the government). You specify what kinds of terms are permissible in such a contract, you pose the question of assent or dissent to the population, and you permit them to assent/dissent. The assenters are then taxed, and permitted the benefits of membership in the polity. The dissenters are not taxed, are excluded from the benefits of membership, and are left in a Lockean State of Nature. The bargain has to be hard enough to induce most people to consent to be governed (and taxed) but not so hard as to coerce anyone into it.

      The ideal scheme is an ideal scheme. It’s coherent as a sketch, but the implementation of such an ideal would require a sea change in attitudes and institutions before it could be implemented (or even publicly deliberated on). Precisely for that reason, someone holding a view like mine wouldn’t induce people to refuse to pay their taxes, or even resent the idea of paying them. If you cultivate the idea that there is virtue in tax refusal (as TAS constantly does), you’re simultaneously cultivating the idea that if taxes were in any sense dependent on consent, no one should choose to pay them. But then you create the obvious mystery: if no one should choose to pay them, and government funding was based on consent, how the hell would government be funded? And if it wasn’t funded, how would it exist?

      I know they’d actually like their readers to think that what they’re criticizing is the level of taxation, i.e., that it’s excessive. But the truth is, what they’re criticizing is taxation as such, not the level, but the institution. Pressed to explain how a government would fund itself, this is what they have to say:

      The underlying idea was that people could pay for each individual service provided by the government as they used it, and this has some practical applicability in the realm of contract enforcement. The question of financing foreign defense measures is more complex.

      Never mind that that is not actually what Rand said (not that what she said was much better than this, but it was certainly better).

      The use of a service presupposes that the service exists. Its existence presupposes that it’s paid for. So the thought here is: An entire government comes into existence on a pro bono basis, with no assured source of revenue; it then charges individual user fees every time someone uses its services–except if it has to deal with a world beyond its own borders, in which case it just generates an entire foreign policy on a pro bono basis.

      Never mind that you couldn’t fund a half-assed town council on this basis. Apparently, legislators, a legislative building, laws, enforcement officers etc. will just spring unbidden from the ground without reliance on pre-existing revenue; then they’ll wait around for someone to call them up and pay a user fee so that they’ll write and vote on some legislation.

      Even if you imagine all the legislation written, what would happen if it was discovered that user fees couldn’t fund half of the legitimate functions of government? I guess we’d just have to wave good bye as government crumbled and fell. I mean, the alternative would be taxation.

      I think the burden should be on them to explain how government funding would work. They’re the ones so critical about the funding mechanism that does exist. Suppose it didn’t exist, then. How do they imagine that the story would go? I don’t have a detailed picture of an ideal system of taxation, but that’s why I don’t get on my high horse about Tax Day to protest the very existence of taxation. It’s the people who do get on their high horse who should bear the burden of explanation.


        • Well, I like Danny Frederick’s work, so I’ll have to read and grapple with that paper at some point. But I think the real problem is that no one has fully articulated the right kind of social contract view, so that criticisms of social contract theory characteristically take the form, “I can’t begin to imagine how this is supposed to work.” The critic shouldn’t be in the position of imagining, but right now, she is.

          That government abuses its methods of taxation is too well known at this point to require belaboring in the kind of simplistic snippets that one finds at TAS’s website. No one at The Atlas Society can compete with, say, David Cay Johnston on tax policy. Nor is there any point in their doing so. Their supposed “competitive advantage” is supposed to be philosophy. The philosophical task they face is to explain how government can be funded without violating a ban on initiatory force. Instead of inserting themselves as polemical contestants in the presidential campaign, you would think that they’d be at work producing real philosophical work on that topic. But the myopia induced by the money behind the operation forbids such a perspective.

          No, they have to keep tossing red meat to their right-wing Republican political constituency to keep the whole TAS game going. The people with the checkbooks don’t understand what philosophy is, and wouldn’t know what it is if it hit them directly on the head. That means that TAS has to keep producing cheap, pointless propaganda–over and over and over, ad nauseam, until the cows come home and drop dead of boredom. And frankly, it sucks even as propaganda. But there’s no stopping some juggernauts–even low velocity ones lacking a destination.

          At the Atlas Society,” said Jay Lapeyre, Chairman of the Board of the Atlas Society, “we don’t preach to the converted. We hired Jennifer to lead our team in bringing Ayn Rand’s revolutionary vision to fresh eyes, in unconventional ways.”

          Well, that’s one way of putting things. Another is that they don’t just preach to the converted–they alienate the hitherto converted, and in doing so, induce them to apostasize. I always love how loudly they insist on “giving only the earned.” Well, they get credit for writing propaganda so bad that it eventually made me question the very foundations of Objectivist doctrine. My gratitude for that is one thing they’ve thoroughly earned.

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