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In another question ("Is it irrational dogmatism to strive to refuse all government services?"), John Paquette says that one should "exploit every tax loophole you can, and get whatever you can from the government, as long as it isn't more than you expect to put in", but also says that one "cannot be a net financial drain on the government (in the real world as it exists today) and properly consider yourself just".

Is this correct? If so, how is one supposed to calculate their net financial drain on the government, and what should one do if there is an excess? Should you count in the value of no-cost government services, and at what value (fair market, cost, some other value)? Should you factor in the cost to you of government regulations, and which ones? Do you count taxes that are paid by others, such as employer-matched social security and medicare, employer paid unemployment taxes, corporate income taxes paid by companies which you own (completely, or shares of)? If you receive an excess, what should you do with it? Donate it to someone who does pay taxes? Convert it into gold bars and hold it indefinitely in case there is a new government? Invest it in a separate account? Refuse it? Roll it over into next year's tax refund?

Roughly half of American households owe no net federal income taxes. However, the vast majority of working Americans do pay social security and medicare taxes. There are also federal excise taxes (relatively small, and in most cases probably less than the fair market value of the use of the federal highway system), and state/local taxes. But then there are so called "refundable tax credits" - especially the earned income credit and the additional child tax credit, which in some cases exceed that paid in federal taxes (sometimes even federal, state, and local taxes combined). Recently the government gave an $8000 "refundable tax credit" to new homebuyers, and gave about $4000 to people who participated in the "cash for clunkers" program. Also there are government programs such as unemployment compensation, medicare, medicaid, social security, scholarships, etc. There are numerous ways for an individual, especially a small business owner with a family, to legally put himself/herself in a position where s/he is taking maximum advantage of the credits and minimizing taxes owed, even to the extent where one has a negative net federal tax liability.

Is it wrong to "Go Galt" (or, perhaps more accurately, to "Go Ragnar") in the real world as it exists today?

asked Jun 26 '11 at 20:25

anthony's gravatar image

anthony
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edited Jan 05 '14 at 14:13

Greg%20Perkins's gravatar image

Greg Perkins ♦♦
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I believe that in "The Question of Scholarships," reprinted in The Voice of Reason, Rand stated that in the proper context, it IS moral to take more from the government than you do pay in taxes.

(Jan 19 '14 at 18:33) El Manantial El%20Manantial's gravatar image

Did she? I know she said "the victims [of taxation], who opposed such laws, have a clear right to any refund of their own money". But that doesn't go to whether or not they have a right to a refund of their own money plus additional damages.

(Jan 19 '14 at 18:49) anthony anthony's gravatar image

Also, a new factor to add to the equation is health insurance subsidies.

(Jan 19 '14 at 19:42) anthony anthony's gravatar image

I recently saw that the essay is publicly available at https://campus.aynrand.org/works/1966/01/01/the-question-of-scholarships/page1 The relevant portion is "It does not matter, in this context, whether a given individual has or has not paid an amount of taxes equal to the amount of scholarship he accepts. (...) The same moral principles and consideration apply to the issue of accepting social security, unemployment insurance, or other payments of that kind." The essay discusses in more detail what constitutes the proper context.

(Feb 20 at 14:36) El Manantial El%20Manantial's gravatar image
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With all due respect to John Paquette, I don't think there's any obligation to limit one's receipts of government benefits to some fictitious and unmeasurable amount you "expect to put in." I agree that one should not be a parasite, shirking the responsibility to have a productive career, but that does not require you to somehow measure the amount you "put in" and weigh it against the amount you take out from the government.

There is no such thing as "the amount put in" to the government. Yes, there is a certain amount taken from you in taxes, but (as Anthony's question implies) there are many other ways in which the government takes away from individuals acting in the marketplace.

For example, suppose you are a young romantic-realist artist trying to make a living with your art. Of course, the government steals a part of each sale you make via direct taxation, but it does much more to prevent you from making a living. It funds "art" departments that propound the notion that only incomprehensible, meaningless, or obscene images truly count as "art." It funds NPR, PBS, the National Academy of Arts, and myriad art museums that elevate childish scribblings to the level of art, thereby poisoning the well for objective artists. Through taxation, it robs money from your potential clients, who would like to purchase your artworks but instead must use every penny for survival. Through inflation, it destroys market values and injects chaos into predictions of the future — and when the future is uncertain, luxuries such as art are the first things to go.

(See Ayn Rand's fascinating article, "The Establishing of an Establishment" for a discussion of the ways in which government can destroy the market for art without overt censorship.)

On the flip side, suppose you're a tax accountant. How much do you "put in" and "take out" from the government? The entire existence of your career is an artifact of the government, yet what you do is certainly objectively valuable.

Market prices are measured in dollars, but they are determined by innumerable value judgments made by innumerable members of a given society. When the government acts to skew those individual acts of valuation, it robs from you in a way that is even more insidious than overt taxation, precisely because it is non-objective and therefore unmeasurable. Whether you are an artist, or an engineer, or an accountant, your value on the market is skewed by the government.

Ayn Rand made the point that dictatorships never rule by draconian yet objective laws. Such laws, while unjust, leave the individual the ability to plan for them and avoid their reach. Dictatorships rule by nonobjective laws, which are impossible to understand, interpret, and obey. While the US is far from being a dictatorship, Rand's point applies in spades to the many ways in which the US government destroys economic value.

One does have a moral responsibility to be productive, but "productive" does not mean "adding more dollars to the economy than you subtract." If you are that starving artist, and a welfare program can enable you to produce objectively good art, and you honestly judge that you are indeed producing values, then I will say "more power to you." And I hope that history will recognize you, where today's government-skewed market has not.

Robert Garmong

answered Jun 27 '11 at 04:04

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Robert Garmong ♦
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edited Jun 27 '11 at 04:16

Too often we get hung up on the belief that the moral is a set of rules made by another individual or institution. The moral is internal and is our personal control system. The ideas used to formulate our moral code may well come for another but the acceptance is an example of our own free will. As Ayn Rand said, through reason we can deduct that our lives must be our highest value. Anything less will cost us our lives. That gives us the beginning of our morality. Appreciating full equality and extending that view to all other individuals shows the basis of conduct required in a free society.

(Jun 27 '11 at 12:05) garret seinen garret%20seinen's gravatar image

That said, we are then able to see why the wrong morality will lead an individual to support the wrong laws, laws being the rules made to restrict the actions of individuals in a social environment. Laws are often arbitrary. Those individual whose moral code judges a particular law to be arbitrary will not follow that law when the penalty becomes avoidable. Understanding that we are equal and that force must be removed from our interactions with others for our own sake, leads to a rational morality. In the case of government funding the immoral started before the distribution of the wealth.

(Jun 27 '11 at 12:23) garret seinen garret%20seinen's gravatar image

The confiscation of wealth and the restriction of opportunity are the two ways governments impede an individual's success. The greatest human satisfaction will always come from succeeding in ones chosen field, avoiding involvement with the governing bureaucracy where possible for the time cost of dealing with the arbitrary is also a tax. When all doors of opportunity are closed then by all means, use what is offered, accept the handouts.

(Jun 27 '11 at 13:10) garret seinen garret%20seinen's gravatar image

Keep in mind, the original creator of the wealth made the decision that it was more personally beneficial to pay the taxes than to fight, a tradeoff type of voluntary payment of the extortion. And the greatest danger in dealing with the bureaucracy is the legitimacy it gives them. The fight though is intellectual and can only be won by showing unknowledgable individuals that there is a better morality.

(Jun 27 '11 at 13:18) garret seinen garret%20seinen's gravatar image
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Asked: Jun 26 '11 at 20:25

Seen: 1,979 times

Last updated: Feb 20 at 14:36