Richard Salsman - Is Taxation Theft?

Speaker 0 00:00:00 Uh, thank you for joining us today. I'm Scott Schiff, hosting Atlas Society Senior Scholar Richard Salzman on his taxation theft. Uh, we want to get your take as well, so after Richard's opening, uh, we'll bring you up. If you have questions, just feel free to raise your hand. Uh, Richard, thank you so much for doing this, uh, kind of contentious issue e even within the Liberty movement, so, uh, is taxation, theft. Speaker 1 00:00:30 Thank you, Scott. And thank you also, uh, David Kelly for, uh, the prep associated with this, uh, session. David and I were gonna do this jointly, but for, uh, various reasons David could not join. So I thought I would go ahead with it. Anyway, I'll still do 90 minutes. I really think, and David and I have talked about this, I really think David and I should do this, uh, version, uh, 2.0, if you will, at some future date. But I didn't want to deprive people of the, uh, the kind of fun stuff associated with this topic. So I thought I would go forward with it. I do have notes from David, and so I'll selectively quote them, but, um, it's not the same thing as him being here. So we wish him well in recovering and, uh, we'll see him in the future. Uh, David and I have talked at length about this, and there, it's a fascinating, I think, topic because it involves not only philosophy and moral theory and the nature of government and technical issues like public finance, taxation, borrowing, uh, money creation and things like that. Speaker 1 00:01:38 I, uh, David obviously is a, a renowned objectivist philosopher. I am not a philosopher. I'm a political economist, but an objectivist for 40 years. And my specialty is public finance in academia. My specialty is actually public finance. Now, public finance, so those who don't know, uh, public finance is how government is funded, and it's part of a broader, uh, field called public economics. Probably haven't heard of that. But public economics studies the relationship between government and the economy, what role government should play in the economy. So you can see why how government is financed would be part of that. But the financing of government obviously is derivative of what the hell is it doing? Is it a small limited government of the kind that founders thought of in the constitution? Or is it a broad-based socialist government or in something in between like we have today? Speaker 1 00:02:38 Well, the financing needs and techniques are gonna be different, aren't they? So, um, so just as a broader concept that's, uh, relevant. Here's the other thing at Duke, I teach in the pp and e program, what is pp and e p is philosophy. Second P is politics, and the third is econ. So the premise, very good premise is that these are interrelated. I can't think of something more interrelated, uh, than the idea of whether taxation is okay or whether it's theft, because taxation is by all accounts, even by foes and friends alike. The way to finance government taxation, let's just stipulate in the beginning, is the revenues of government. And government does get revenues, well, let's say resources from other means other than taxation. And what are they borrowing and printing money. Now, by printing money, I mean only, that's not a capitalist setting. That's a central bank untethered to any kind of objective standard, like the gold standard. Speaker 1 00:03:52 But ability to print money, fiat money, fiat meaning force without limit. So, uh, so again, the broader context here, taxation is one of the three ways government finances itself, but I would contend that it's all taxation. Because if you borrow, if a government borrows, how are they gonna repay it? They'll ultimately have to repay it by taxing people. So it's deferred taxation. Borrowing is taxation deferred. And now what about I inflation? What about government printing money? Not taking money from people, not borrowing money from people, but a monopoly Federal Reserve just issuing money when the government needs it. Well, if you know economics at all, you know, supply demand at the excessive creation of money lowers the purchasing power of money. I've had sessions before on clubhouse about inflation, so I won't rehash that. But the end result is higher prices paid by people in the marketplace at the grocery store, at the gas pump, and there they don't quite notice who the hell did that? Speaker 1 00:05:13 Who caused that? They'll blame the gas station owner. They'll blame the gross. They don't know that these are the effects of government printing money, excessive amounts of money. And so when economists refer to the inflation tax, quote unquote, and often the cruelest tax of all, quote unquote, they're close to the truth. Inflation's a kind of tax. It makes you pay more for the goods and services you buy, but not because the grocers or the gas station at attendants are exploiting you. But, but because the o the government has issued bad money, the government has issued too much money. So that's just as a general overarching kind of conception of public finance. Public finance is the way government is financed, and it's very, very different under a capitalist government, uh, versus a welfare state government as we have today, versus a socialist government. Now, if someone says to you, theft, you immediately think of someone stole something from me. Speaker 1 00:06:29 Premise one, I own that thing, the burglar or Robert does not own the thing. It's an illegitimate taking. Uh, but notice all the deep not to over complexify this notice all the deep philosoph premises and theory associated with that. What is private property? How do you come to own it? Uh, only then can you say, well, someone took it from me and it's illegitimate what is meant by illegitimate, illegitimate or improper? We start coming into things like morality. So you, you see, and, and, and since taxation funds government, it, it's impossible to analyze this without knowing a bit of philosophy, a bit, a bit of political theory and economics. Speaker 1 00:07:22 Now, let me give you a little bigger context, and then I'll get to objectivism and why, and libertarianism and anarchism, it's really relevant here. And the broader context in the 18, oh, I haven't looked this up recently, but I'm guessing the 1850s, the socialist Frenchman Pierre PK wrote a book called Property Is Theft <laugh>. Okay? Not to analyze that, but you get the idea. And Marks was influenced by it. There's no way that private property is real earned, deserved. This is a leveraging off of guess who Rousseau property is. Theft property's never earned. It's just stolen from, I don't know, whatever the disadvantaged, the exploited labor. Why do I bring that up? Because in my study of the history of this taxation is theft as a phrase, totally mirrors pome. These were initially anarchists who hated pome. Pome was like a semi anarchist. And they wanted to like, they wanted to comeback to Pero <laugh>. Speaker 1 00:08:46 They wanted to come back. That said, you think, uh, you think property is theft? Uh, taxation is theft. You see the, you see the beginnings of a kind of almost childish says, you says, aye. You says, property is theft. Aye says, taxation. Isn't that So the origin of the phrase, it's very interesting. You fast forward a hundred years to a guy named Chok, Frank Chok in 1947 wrote a book called Taxation is Robbery. Let's look it up. It, it doesn't say Taxation is theft. That's close enough though, isn't it? Taxation is robbery. Okay? Uh, you can go read that book. I'm not gonna summarize it for you. I just wanted to, I always live in these sessions indicating where am I getting my sources? What, what am I citing? What am I looking at? You gotta read. It's easy to find on the internet. Taxation is robbery. 1947 Cho off Frank Chora, about seven years later, the income tax root of All Evil <laugh> 1954. Speaker 1 00:10:04 Now, let's get to why we're here tonight, cuz I'm with the Atlas Society and we love Ayn Rand, and we love her theories and philosophies. Pretty interestingly, in February of 1964, in the Objectivist newsletter, under a series called Intellectual Ammunition Department, I love that the intellectually they would take questions from, uh, subscribers. And the question was, how do you finance government in a free society? So interestingly, uh, in 1964, Iran took on that challenge, and in the newsletter answered the question, tried to answer the question. Interestingly, it wasn't given to, uh, Greenspan, uh, Brandon, I mentioned Greenspan because he was an economist. So you might think this question would be delegated mean to an objectivist economist. Uh, I don't know the background entirely to this, but the fact is, Aran answered the question, not, uh, Alan Green spend or anybody else. And it was a very interesting answer. Speaker 1 00:11:25 And I've checked by the way, I've checked the correspondence between the language used in the actual newsletter and then the reprint of it in the virtue of selfishness. A compilation of essays published in 1964, the same year as the financing essay occurred. And, you know, when you look back at Ayn Rand's, um, uh, publications, it's clearly something that should have gone into capitalism and the unknown ideal. It really does not belong in the virtue of selfishness. Virtue of selfishness pertains to, as you know, ethics and capitalism. The unknown ideal is the application of ethics to political economy. Well, certainly the issue of financing government belongs in political economy. Uh, but that's, uh, okay, maybe that's a bit of quibbling, but I'm only suggesting here that this might have been a premature effort on I rand's part to, and some answer something that she might not have been fully equipped to answer. Speaker 1 00:12:31 Because my contention tonight is that it's a not very good answer. It's a bad answer. It's a contradictory answer. It's a, I don't, would I go so far as to say it's an embarrassing, a it's, it's a bit embarrassing. And that wasn't my first take when I read it. When did I first read it? In the late seventies. So I read it first in 1979, when it was 15 years old, but that was 25 years ago. It's not a good answer. And my basic theme tonight is something like this, that since, and she would agree with this, since anarchism is wrong, since the argument for no government is wrong, put another way since government is necessary, which she argued. So I'm not disagreeing there. And, and let's to be more clear about it. Unnecessary good <laugh>, not unnecessary evil as is sometimes conveyed by, you know, the jeffersonians. Speaker 1 00:13:46 Well, okay, premise one, government is necessary for what? The protection of individual rights. Okay? That's the purpose conducted by what functions, uh, courts, police, military. Wow. Cuz now we're concretizing, uh, the purpose into functions. Well, that isn't platonic. It requires funding, it requires financing. And if we stipulate, I think as all sides do, taxation is simply the word for financing government. So we need, we need quibble about what the hell the word means. Taxation means government revenues means of sustenance for government. And then the debates of course occur around is it proper, is it necessary? Should it be voluntary? Should be involuntary. I, I hope to not just devote tonight to just, is it theft or not? Is it or not? But when we move beyond that, if you're interested in questions like, well, if it is legitimate, what kinds of taxation, what sorts of tax taxation, where are we going with taxation? Which is probably a more relevant and practical issue. But I do wanna spend some time on this very interesting philosoph political issue of the basics of what the hell are we doing? Should there be any at all, any taxation at all? Speaker 1 00:15:22 Uh, my third premise, um, taxes being simply named for government revenues, taxes are required, but they're required only to fund legitimate government functions. And oh, here's another premise. Taxation is theft only. Now, here, my, here, my qualifier here, this is my contention. I'm not speaking for David, by the way. I'm not speaking for I rand or anyone else. Only to the extent it funds, um, rights violating government. That's when it's theft, that's when it's improper. But then the underlying theft is really the theft of rights, not the funding mechanism. It's the idea that government itself is engaged in a form of, th it's a criminal. They're funding a criminal, they're funding an illegitimate government that's not doing what Ayn Rand. And now all of us believe it should be doing defending individual rights. But th but think about it. That implies that taxes should be justified for a truly limited rights per respecting government. Speaker 1 00:16:37 And here's, here's the real rub in Ayn Rand's essay on how to finance government in a free society. She argued for, there's a little, uh, equivocation here in some of the essay, but fair to say, she argued for voluntary taxation. She thought that involuntary taxation. Now, the premise here is the context here is for a legitimate government. She's not talking about illegitimate government. She's saying even in the case of a free society, and her phraseology, by the way, interestingly, is fully free society. So it's a very extreme, not to say extreme is bad, but a very strict standard. This is not just the free society, fully free, she said, uh, no involuntary taxation, implication, taxation would be theft. Involuntary taxation would be theft. She didn't actually use the phrase, she never said taxation is theft. She does clearly though, say in that essay that involuntary taxation is improper and then there's some dec. So, but, and again, but why she thinks that taxation per se, not any kind of taxation, not any kind of taxation related to what the government's doing is per se, by in essence, the initiation of force. Speaker 1 00:18:06 And I don't have to tell this audience that the initiation of force is an evil, especially when done by, especially when done by government. So, so if government is doing it, it's like super, uh, super evil. And the question is whether that's true or not. And, um, there's a paradox. Here's the paradox. Government is necessary to protect individual rights. Uh, 0.1, 0.2, government is not some platonic entity. It is a real thing requiring real source resources to carry out its real functions called courts, military, and police. These things are not funded, uh, with no resources, but she believes that in the, again, quote, fully free society, there'll be more than enough voluntary contributions to support this. Now, her further view is if there are not a sufficient voluntary contributions, so what, but she didn't say it that way. But her view basically is it's possible that some people won't contribute. Speaker 1 00:19:15 And her view is so what? They shouldn't be forced to contribute. They benefit, as she puts it. If you look closely at the essay, they benefit indirectly from those who do contribute. And this is part and parcel of a free market society, of a free society. Now, think of part of the benevolence of what Iran is talking about, which is really kind of cute. The cute benevolence is if we ever achieved a fully free society, I mean, imagine that to the objective is ear <laugh>. That's, that sounds like a society of rational, benevolent, just fair people. Of course, they would fully voluntarily finance this very wonderful government. So moving out of the context of today, namely lots of people from all parts of the political spectrum hate the government. They hate the government. They don't wanna fund the government, or they only wanna selectively fund the government. And they want to evade taxes. And taxes are a burden. No, no, no. In Ironman's world of a fully free society and, and not a, uh, not a crazy impo improbable world. Why wouldn't people fund this wonderful government? Speaker 1 00:20:31 All right, now here's my take. Um, before I give you my take though, let me just say this essay stood this essay by Rand 1964, which showed up in the, uh, uh, the virtue of selfness kind of stood on its own quietly like unde, <laugh>, undiscussed and unexamined and un criticized for many, many years. Which is interesting because from 1964, until it was begun to be discussed, which is like in the mid nineties, about 30 years later, um, it, it kind of leveraged off of her view, which was, guess what her view was. This isn't really very important. She actually says in the essay, for those interested in the free society, this is the last thing. She explicitly says this, this is the last thing to worry about. The first thing to worry about is of course, scaling back the size and scope and power of government. Speaker 1 00:21:30 And so she has a very interesting, uh, theory of public finance, namely, and there's some truth to this actually. It's a derivative, uh, thing. It's a thing that arises after we've all decided what, what the size and scope of government is. Because if you look at the original American system, I mean, what was the major financing source for the very restricted, constitutionally limited government of, I don't know, 1789 until 1889? And and for those of you who know, the answer is tariffs. That's it. Tariff. What are ta, taxes on imports? That was it. If you look at 90% of government, federal government revenues were from t tariffs, which are taxes on import and interestingly tied to what are imports. Well, they kind of come, they come from other countries, but they also require a US Navy and a kind of Coast Guard and some infrastructure, you know, ports and, and things. Speaker 1 00:22:40 In other words, where the revenues would go toward facilitating trade, ensuring, uh, trade routes were safe from, uh, pirates and others, right? So there was a direct, there was not only very limited government taxation, there was a tie to this is for a certain purpose, which is rational. We're not redistributing income. We're not robbing Peter to pay Paul. We're, we're charging tariffs on imports because that requires an infrastructure and that's what government will spend its money doing, right? So, so that is something, you know, Ayn Rand would say that that makes perfect sense, right? No, fast forward to the New Deal and the great society and Obama cared, and the whole massive redistributive welfare state will now government is taxing not to provide legitimate government services, police courts and military, cuz that might be maybe like one 10th of current spending, but they're spending 10 times as much on all sorts of goofy and irrational and unjust things, but mainly the redistribution, redistribution of wealth totally unjustified. Speaker 1 00:23:58 Well, I think in 1964, Iran's thinking, she's not really thinking in terms of taxation as legitimate revenues for legitimate government. She's not thinking of it that way. That's the way I think of it. That's the way I think it should be done. But notice leveraging off of her view of what legitimate government government is, now she's more thinking of it in terms of I'm going to classify taxation as the initiation of force. Premise one, premise two, the initiation of force is evil and wrong conclusion, q e d, therefore taxation is evil, therefore mandatory taxation is evil. And, um, it's the second part of that premise that that's wrong in my view. Involuntary taxation, you could say is a redundancy is the way I would put it. And her view voluntary taxation, I would contend is a contradiction in terms, and not to be too, um, crisp about this, but she very astutely identified a fallacy called the stolen concept, which she used to be credited for in philosophy. Speaker 1 00:25:15 What is the stolen concept? Um, advocating or pushing a particular concept while denying its underlying roots. And now here I think the problem is she's trying to advocate a government, and remember her government is a monopoly. It's not, she's against competing governments. She's against the libertarian view of competing government. It's a, as she put it, a monopoly on the legal use of force. Legal meaning retaliatory use of force in a certain, um, geographic setting. So all so already that is quite a high standard. Most economists, uh, oppose monopolies, right? As dangerous potentially exploitative. Ayn Rand's view is no, there should be a monopoly. It should be a, and not just of a bus of a, of a government with a illegal monopoly in the use of force. Wow. Well, of course Ayn Rand's view, is it better damn well be constitutionally limited cuz this thing could be crazy dangerous and it could slaughter millions. Speaker 1 00:26:26 And, and she knew that better than anyone. And, but here's the paradox. How do you fund this thing? And the, and the paradox of the puzzle seems to be something like, can you violate rights to fund this thing? And her view was, of course not. But to her violating meant making people pay, making people pay for government as in the initiation of force. So I believe that's why she came to the view. She had to come to the view that this really needs to be voluntary. And I think it's incoherent. It's absolutely incoherent. Not that people would, not in a limited government setting, in a more rational setting, maybe voluntarily contribute to the government. But the idea that that would be sufficient to cover the government seems implausible, infeasible. And, um, that is exactly what in the mid nineties and late nineties led to, interestingly, a flurry of now mostly forgotten objective essays about exactly this issue in places like, well some of them are like defunct, sadly, full context. Speaker 1 00:27:43 It was a journal, an objectivist journal that published, uh, essays, really good ones. But it's hard. It's, it's outta print. It's been outta print for years and it's difficult to find. Now, more available to find is the essays in, um, the Journal of i Rand studies, or I'll refer to as jars. The Journal of i rand studies started in the late nineties and, uh, just actually finished up, uh, a year ago. So it's, it's, it's also closed, but at at least it was around for 23 years. And in the late nineties and early 20, there was a flurry of discussion and debate about Ayn Rand's theory of government finance and some libertarian anarchist waved in, weighed in, namely Larry Seacrest, and argued things like, well, Ayn Rand is wrong because government is wrong. So we need to talk about voluntary involuntary financing or the way some taxes are better than others. Speaker 1 00:28:48 The whole project of justifying objectively limited government is wrong. So I'm gonna argue against any time of any kind of financing of government, but the more interesting, and I have to confess, I I, I myself only learned about this. This might surprise you, <laugh>, I only learned about this in the last three months that my own position was being that which I developed, I don't know, about six or seven years ago, that mandatory, um, taxation was legitimate, morally legitimate. I'll, I'll expand in a moment, but, but this argument David Kelly told me and others alerted me cuz I just wasn't following it at the time, was argued in the late nineties, well, actually starting in the mid nineties by, uh, Murray Frank, f r a n c k, um, unfortunately, uh, not with us anymore deceased, but he was the first Murray Frank was the first to suggest that Ayn Rand was wrong, but he's an objectivist who defended Ayn Rand's conception of the limited government. Speaker 1 00:30:01 And the first one from 1994 in full contacts was basically an argument that said taxation is moral. That was the name of it, taxation is moral. And his view was not that government can do just whatever the hell it wants, it was that if a government big stipulation here, the same one I would make, if a government is legitimate in the objective sense, premise one, premise two, and we are not platonists, we recognize that it requires funding for these very important functions, then the question is how to get that funding. And although it's possible that some of that funding might be voluntary, there is a problem associated with what's called free riders or more derogatorily free loaders, people who expect to get these services but don't pay. And Ayn Rand's view was, don't make them pay. And my view, and it turns out, uh, I had a precursor to this on giving him credit. Speaker 1 00:31:10 Murray Frank's view was no, they should be compelled to pay, but in compelling them to pay, it was not an initiation of force. So in other words, they should pay, they should not be moochers using <laugh>, using Iran's phrase. Now they should not expect something for nothing and not just something for another, something. So crucially important as the vehicle for protecting our rights and should be made to pay, but without violating their rights. I thought of this about seven or eight years ago when, when I first started thinking about it, but I had no idea that Murray Frank had been writing substantially the same thing. I mean, we disagree on some small things, but starting in 1994, and now once he argued that, and by the way, the precursor to this was saw a student named Peter St. Andre Peter, in that same journal, full context, had argued, uh, for taxation, but what he called choice-based taxation, which I don't really agree with, but Peter, uh, interestingly, Peter, uh, was a student at the, uh, at a school in an objectivist school in New York who I met years ago. Speaker 1 00:32:32 It turns out that Peter, you know, started writing essays and that's what instigated this whole thing. Peter wrote an essay in full context saying, examining Ayn Rand's view of taxation and saying, well, um, maybe it shouldn't be totally voluntary and, and me, maybe it should be mandatory in some way. But the way out of this dilemma is to have what he called choice-based taxation and choice back tax choice. Uh, based taxation was something like this. You got your income tax, uh, statement from the i s <laugh>, and there was like an itemized list of things government spent money on. And Peter's idea was you choose what to allocate your taxes to. I don't like the Defense department, but I like the epa or I like the epa, but I don't like the energy department. So, so Peter's view was the way out of this quote, dilemma, the dilemma of, oh my God, my taxes are, I I have to pay them. Speaker 1 00:33:34 I wonder if we can introduce a little choice in this mix. It kind of sounds like school choice, doesn't it? Where the government is still owning and operating the schools, but they might let the parents decide, you know, whether the kids move to this school or that school. And, and so that was Peter. Anyway, I I want to cite Peter St. Andre, because if you look up on the internet, Peter Saint Andre and I, Rand and Taxation, there's some really interesting essays from Peter, but that to credit, Peter, Peter was the one who launched this interest from Murray Frank and then from Larry Siegrist and others. And there was this flurry of very interesting back and forth and back and forth and back and forth between objectives, semi objectives, libertarians, the, you know, anarchists, libertarians on the whole issue of funding the government. Speaker 1 00:34:32 Okay, um, let me wind up a little bit here and open it up for, um, questions. Um, about eight or nine years ago was asked by an objectives philosopher to give my thoughts on taxation because of this controversy. But then also somebody asked me to comment on, so I thought I would read this into the record cuz it's so interesting. What do you think of your own Brooks view of taxation? So someone sent me a link. Now this is from April, 2015 and here's the citation. And interestingly the answer I gave to your own in an email after that. So here's what Joon Brook was quoted as saying tack. And this is e echoing a Rand. And by the way, echoing also Craig Biddle, who in 2012 when I was, when I myself was a contributing editor of the objective standard, basically wrote an essay confirming and extending Iran's argument for a completely voluntary financing of government. Speaker 1 00:35:45 So I wanna put that on the record as well, is something I didn't agree with at the time. But Biddle published it nonetheless. Summer 2012, if you wanna look it up, how would government be funded in a free society? But about three years later, Yaron said the following quote, in a blog talk rate, taxes are inherently theft. It doesn't matter whether their aim is incentivizing me to lose weight or gain weight or to get me not to smoke or just taking my income. Cuz we've decided my mother can be better used by other people somewhere else, or even for legitimate causes like taking my money away so we can use it for the police and military, which is a legitimate use of money. Speaker 1 00:36:42 I'm still quoting here now, always because they involve force and aren't voluntary. Taxes are always theft. That's the context in which we need to approach taxation. It's always theft. There are no quote, good taxes, no quote right level of taxation any more than there's a quote, right? Level of theft. There are no quote I'm quoting here cuz he did it this way. Positive taxes and no quote, better taxes than other taxes. It's not okay to steal from somebody if you're stealing off of their consumption, but wrong to steal off their income. Now, I'm just quo from my, I had an exchange with your own at the time. So this might be interesting. I don't think I'm, uh, telling anything out of school sake. I wrote your own at the time, your own quote. I think this isn't the right way to go about it. I believe the word taxes should be reserved for payments to the government. And then the question should be whether taxes are legitimate or not. And the legitimacy derives not from whether they're paid voluntarily or not, but whether they're levied in an equal manner and for legitimate government services rendered, uh, i e services which protect individual, uh, rights. Speaker 1 00:38:21 Um, see below more than a week ago in an email, answer to a question I got from, I won't name the person, uh, fill in the blank, asking me about financing in a free society. But it was an objectives professor quote, I defended the principle of proper taxation. So just as we shouldn't try to stop bad government by opposing government per se, which is anarchism, we shouldn't stop bad taxation by opposing taxation per se. Let me know what you think. Um, he didn't let me know what he thought in conclusion, let me just suggest, um, my theme and my argument is, and and I really welcome a future 2.0 on this, where David Kelly and I will, so I don't wanna speak for him though. Um, taxation is the financing of government. Government is legitimate if it protects individual rights. The financing of government is legitimate only to the extent that it funds a rights respecting government. Speaker 1 00:39:32 Government, uh, taxation is theft. Here's my concession to the extent it funds a thieving government, but not all governments are thieving. Not all states are status. We aren't anarchists as objective as we're not. I do believe that the argument that taxation is theft unfortunately goes hand in hand with the anarchist argument. It literally is the view that there cannot be any legitimate constitutionally limited government. Therefore, the financing of any government is per se, illegitimate per se. This is a robbing thieving thing, not any particular government, but government per se, according to the anarchist, is a, uh, vicious, violating thing. Therefore, taxation is theft. I'm wor I'm no, I worried is too passable word. I'm now by years of this, convinced that the, if there's an objectives, quote unquote view, that taxation is theft. It is in line with the anarchist argument. It is, it is part and parcel and aiding and abetting, uh, an anarchist view of government. Speaker 1 00:40:56 And we should be no part of that. We should not be anarchist. We should not be presuming that government is a thief. We, we above all are the ones who say we know how to delineate and circumscribe government so as to not be a thief. It is not necessarily a thief. There is nothing about government as a necessary evil. Is that what Jefferson said? Or no, it isn't. It's a necessary good. It's totally necessary and can be made good and it requires financing. And those who refuse to pay for such a government are themselves thieves. The the real thieves are the ones who living under a perfectly legitimate government, which again was Ayn Rand's context and then refuse to pay are moochers, are parasites, are thieves and shouldn't be allowed to get away with it. And I'm using, I think here objectiveness terminology, a little heat here, not just light to say this and saying in effect that that would be the more consistent objectiveist position that I'm in, should have taken unabashedly defending rights, defending government that that defends rights. Speaker 1 00:42:16 And we can, as I said, we can leave for lots of discussion tonight. What does that mean? Even the lowliest poorest person, what do they have to pay according to Salzman? They have to pay something. Okay, what and what's by what standards? And, uh, the two, by the way, the two main ones, which a rand negotiates, she has both of these in the essay, which is very odd. One of them is called the benefits principle, and one of them is called the ability to pay principle. These are the two, if you don't know this, these are two principles in taxation. There's many others, but those are two very philosophical principles in taxation. And the benefits principle is the idea of you should pay for the services you use. That is very close. No notice to the market principle. You can't go into a grocery store and take stuff and not pay, right? Speaker 1 00:43:16 The government would, uh, prosecute you. So why should you be able to do that with government services? So the benefits principle is the idea of, to the extent you benefit from government services, again, legitimate government, you should pay, you shouldn't be a freeloader. And you also should, however, not pay for services. You're not using, like today, everybody pays for public schools, right? Well, you don't send all your, you don't send your kid to public schools. Say, why are you paying for this? Now? The, uh, ability to pay principle is the idea of, well, if you're wealthy enough and can afford it and or engage in more economic activity than other people, then you should pay for government services more than others do. Why? Well, but what are these services? Police courts, national defense, the argument is wealthy people and companies need more than anyone else the protection of the Pentagon, the protection of the courts. Speaker 1 00:44:17 Why? Because they have a bunch of contracts. They have, they have millions and billions at stake. And uh, they're using these government services to an excessive extent. Well, not an excessive, but to a much greater extent, right? And, and here's the key. They have the ability to pay. Now if you look at Ayn Rand's essay, she has both of them in there. She has lotteries as a way to raise funds for government voluntarily, but she also has the idea of paying fees to make sure courts, uh, adjudicate your disputes or not. Now. And her view is if you don't pay the fees, they won't adjudicate your disputes. Wow. Uh, extend this to someone who says, I'm not gonna pay taxes. So the police have to figure out when there's a domestic dispute when they come to the neighborhood, uh, they have to figure out, uh, who paid and who didn't pay. Speaker 1 00:45:11 Uh, because if they didn't pay, we're not gonna protect them. Uh, but then if in the altercation one of them paid and one of them didn't pay, I mean, Iran does not go into this, but that's what her theory implies. <laugh> it, it implies that that government should only provide services to those people who voluntarily pay. I contend that that would be as chaotic and as ridiculous as anarchism, which she also, uh, ridicules as you know, properly ridicules. But she just didn't think this through very well. But the idea that ability to pay in there is very interesting because we know in other contexts she refuted the Marist argument that, uh, from each according to his ability to each according to his need in the critique. And Atlas Shrug of the 20th Century Motor Company, she specifically, uh, hones in on that outrageous Marxist distribution theory of who should get paid what. Speaker 1 00:46:10 Well, based on their ability you pay into the pool based on your need you take out. And yet she has that ability to pay principle in her public finance essay called How to Finance a Free Society. So, um, lots of complications here. I think lots of things to dig into. Um, we are we far away from financing the, what Iran called the fully free? Of course. Of course. Cause we're so far away from capitalism. But I think still fundamentally, this is a philosophically very interesting topic because it brings out a whole bunch of things about the nature of government, anarchism versus anarchism. Anarchism is just limited government of the, of the Kinine and Robert Nosak and others have advocated and, and more importantly, um, the size and scope of government and how to finance it. So I'll leave it there. I know I went over a bit along, but, um, I'm also here for 90 minutes. So Scott, I think we're left with at least, uh, 45 minutes more of, of interchange. Yes, Speaker 0 00:47:16 Yes. And it's a fascinating take. Just as a kind of corollary before we go to Buddha, I'm just, would you say even though you disagree with anarchists, uh, or, and that ran, did, would you say that they're being more consistent in a way to hold that position because they don't see government as legitimate? So, you know, why fund it? Speaker 1 00:47:39 No, I think you can say that. No, I think there's nothing wrong with saying, of course, someone who believes that no government is legitimate would not endorse any kind of taxation, voluntary or otherwise. But that just goes back to my original point that I don't think any of us disagree that this is the word for funding government. So yes, I think that, uh, I think you're right, if that's what you're getting at, Scott. Uh, but if by consistent you mean, you know, logically adhering to reality, I would say no, because the anarchist so separately, the anarchist argument for no government is unsustainable. That's not what this session's about. That's not what we're arguing here tonight. But if we can just stipulate that that's wrong, then we're in the realm of saying, okay, we have government, how should we fund it? And so the this issue of is taxation theft, yes, I did wanna bring up the idea of, I think the question comes from anarchists. Speaker 1 00:48:38 I mean, I think the reason it's an issue, I think the reason it comes up in that form is that the implicit, the smuggled premise, if you will, is of course it's theft because government is a thieving entity, right? I shouldn't say, right? And the objectivist view is not necessarily <laugh>. Now, now, now she actually said, well, I actually, I hate to say it, but the long history of government is it's a thieving, disgusting, exploitative entity. But as again, a separate argument, if you could say it in the anarchists and I, as I have, uh, there are two our civilized credit, America, Britain, the us, uk in the, uh, 19th century, especially examples of government behaving itself, not perfectly, not fully as Eran put it, but, uh, the anarchist argument that it's impossible to conceive of a state that behaves itself. I would say more accurately, it's impossible to come up with historical examples of anarchies that have worked. But, um, I don't know if I got to your point. Um, yeah, no Speaker 0 00:50:01 Spot. But I was just, uh, drawing out some of the implications of what you were saying. It's great. I appreciate it. Uh, we wanna invite others to come up to the stage. Um, we wanna let, uh, Buddha, thank you for your patience and, uh, go ahead and ask your question. You'll have to unmute, there's a microphone button at the bottom, right? I don't know if you're, sometimes there's an issue with it and you have to leave and come back. But, uh, while we're waiting, why don't we go to Dan. Dan, thanks for joining. Do you have a question for Richard? Speaker 2 00:50:42 Yeah, um, I, well, a couple comments actually. So, um, interesting take, um, thanks Steve. I think there's, I so I agree. There was, there's one point you were saying with like, um, sorry, there's, there's so much, I can't remember exactly what you were saying, but to the extent of like, what is, what is taxation, right? Like, because ultimately it's just a word, it can mean a million different things to a million different people. Yeah. Um, and I think, um, you know, anarchy, government, like these are all words that can, um, essentially be the same. They can mean different things to different people. Um, one arc anarchist might say, you know, private police is not government and therefore it's yeah, it's anarchy. Another anarchist might just say, well, we're not being ruled over, so courts are fine, as long as they're not ruling over us. Um, point of government is noting, or whether or not that's possible. Speaker 2 00:51:44 Um, I, I think what's what's interesting to me is the question of when it becomes seething. Yeah. How do you, how do you take your power back, right? Because let's say, let's say you have a restaurant, right? You go to this restaurant, they're spitting in your food, they're, you know, they're serving ATI food and everything else. Yeah. At some point you can say, I'm not gonna pay for this. I'm gonna leave them to eat somewhere else. But if you accept that everybody must pay to a government because the government is good, then at what point when the government becomes corrupt, are people able to say, Hey, it, it's corrupt and it's now, and now I have a right to stop paying if you accept as an inherent, um, fact that everybody must pay. Speaker 1 00:52:25 Really good question. And the first thing I wanted to say, Dan, really profound question. First thing I wanted to say was my interpretation might be, uh, portrayed as someone by saying people should pay taxes, uh, to flip to the current context and say, well, people should pay taxes today to leviathan to this disgusting thieving, which I would even agree, um, Dan kind of government. No, no. My context here is in a fully free society as Ayn Rand put it. And what I'm saying is, and I think it is different from the objectivist position and different from the anarchy position, is, um, they should pay and they should be compelled to pay without it being characterized as governments initiating force against them. No, they're not. They're preventing people from thieving, they're preventing people from free riding or freeloading, however you wanna put it. And Ayn ran was against mooching, she was against mooching as well as looting and objectives don't quite emphasize the mooching, but the mooching part is, I'm gonna get something for nothing that's improper. Speaker 1 00:53:36 It's not only immoral. And here's, here's where I differ. It should be illegal when it, when it comes to financing legitimate government. Now, Dan, I would say in answer to your question more directly, kind of like what to do when we don't have a fully free society. But instead Leviathan, there's a long history of tax revolts. There's a long history of other kind of revolts and of course revolutions. I think the whole January 6th thing, frankly, is a more recent example of what the hell do you do when a broad, uh, part of the populace is upset with disenchanted, with pissed off about what government is doing. Um, and so, uh, but that actually, interestingly on the issue of taxes has already happened because guess what? The gargantuan welfare state keeps chugging along. And in every new crisis from Y2K and 99 to, um, nine 11 to the financial crisis of oh eight to Covid in 2020, we get one thing after another where the government spends massive amounts of money and issues, massive amounts of debt, and they're not really taxing people and people are unwilling. Speaker 1 00:54:56 It's been shown in public finance to pay fully for the taxes necessary to support today's gargantuan government. That's very interesting. It's also a, a, a explanation of why, of why the government has had to resort to these alternative methods. Namely, we need to print money and borrow money because if we tell people they're gonna be taxed for all this, we're gonna be thrown out of office. So there's a bias, there's in democracy, an unlimited democracy, there's like a fiscal bias toward deficit spending because people, there's a sense that politicians have, people are gonna have a tax revolt if we tax them too much, so we won't tax them. That's what modern monetary theory is. Modern, uh, uh, Stephanie, uh, kelton's running around saying, you don't have to tax people just print money and borrow money, and there'll be no inflationary effect. We talked about this in a prior, uh, clubhouse, right, Scott, modern monetary theory, how crazy it is. Speaker 1 00:55:59 But their view is, uh, just print money, borrow money in the first case with won't cause inflation. Uh, in the second case, it won't cause high interest rates. This'll, this is brilliant. She was the advisor to Bernie Sanders. Of course, this is brilliant. We'll have, uh, all sorts of, uh, gargantuan government spending without any negatory, without any negative effects. Um, but, but there's no other way, Dan, I think to revolt against Leviathan, if you will. You could do it by tax revolts, but if you, as you know, if you do it by, you know, not paying your taxes, you'll be in jail. So tax evasion versus tax avoidance. Tax avoidance, meaning minimize your tax is, is legal tax evasion is not, it's a very difficult issue. And if, if an objective or a libertarian says to you, well, we need education, we need to somehow convince the broader population not to be demanding such big government that seems so farfetched as <laugh> and so implausible it, it might work, but it will take decades. It's not very inspiring to people. So, but Dan, do you have a, well, Dan, what is your favorite method of fighting? Leviathan fiscally? Speaker 2 00:57:12 Yeah, well, my, my favorite is not paying taxes. Um, which, that's, that's a whole other, that's a whole other discussion about how to legally not pay tax. But, um, but so, so it's interesting cause um, like, like yeah, you know, tax revolution and everything, but how's that working out for the January Sixers, right? Like, right, like ultimately, you know, they say the government is supposed to be there to protect the rights of the minority. Cuz ultimately the majority never need their rights to be protected from the minority. Cause they're, they're outnumbered. Yes. Right? Um, but if, you know, if, if, if the minority are being robbed, then you know, you, you kind of come back to that situation of the restaurant, right? If they're, you know, if there's only two customers who are being, um, you know, their food is being spit in. Well, you know, if, if all the other customers say, Hey, you know what, you have to keep eating here because our food is fine. Speaker 2 00:58:03 We don't have a problem, and therefore you have to keep spending your money here and you have to keep eating the food, then that's, that's criminal versus, you know, just, you know, okay, fine, you guys wanna stay here and eat food, do it, but we are gonna leave because we're not being treated. Right. And of course, you know, like you said, if, if, um, for most people, if they try to stop paying taxes, that's when, um, that's when the government comes down and says, Hey, you know, you guys are criminals now and we're gonna take you to jail and we're gonna take everything, you know, by force. And, and I think that's ultimately the, the question of is it theft? Because, you know, if somebody walks into a bank with a gun and says, um, would you be so nice as to put all the money in the bag? Speaker 2 00:58:40 You know, the question is, well, what happens if I don't? And, and, you know, that's what makes it theft, right? If, if they were to simply say no, and then the robber would say, okay, nice. You know, have a nice day and, and leave, you know, maybe that's not theft. But if he stays there and says, well, if you don't, I'm gonna shoot you. Um, you know, and, and you really wanna find out if I'm telling the truth. You know, that's, that's exactly how taxes work. So, um, the idea that if you don't pay, it's be taken by force. And so absolutely, it's theft. Speaker 0 00:59:09 Yeah, I do wanna get some others in here. Thank you for that. Uh, Connie, thanks dear. Thanks for joining. Speaker 3 00:59:18 Well, thank you for having me as always. And Dr. Richard, I, um, I had emailed you so I'm not sure if I went to spam or not, but I also, um, put some stuff in your direct message here, so Oh, great. Just prefacing with check that, cuz I've got some things coming up here. Speaker 1 00:59:37 I will, Connie, I don't, the last thing in the world I want is for you to be spammed. Oh, I'm sorry. But okay. I'll check. I'll look. I promise. Speaker 3 00:59:45 Yeah, yeah, that's for sure. Speaker 1 00:59:48 Okay. Speaker 3 00:59:50 And um, that being said, it was just some upcoming stuff that we wanted to extend it an invitation to, but that's not what you're here. I was just pointing it out like, okay, Speaker 1 00:59:59 Great, great. Speaker 3 01:00:02 Um, actually, it, it was very interesting your answers to, um, Dan, well, Dan's name he declared it is Dan taxation stuff. Berman <laugh>, yeah. Yeah, I've been, uh, I've been, uh, working, um, and trying to, uh, read, uh, his book on that topic. So, um, so it was really interesting. I was glad that Dan got here. Um, I was wondering what, um, <affirmative> and now I just completely lost it. I'm sorry. Speaker 1 01:00:39 Oh, that's okay. That's okay. Speaker 3 01:00:41 Come on back Timmy. Go ahead and go to Dan. Alright. Speaker 1 01:00:43 Okay, Connie, I do that all the time. So don't, don't apologize. I just wanted to say to Dan and Connie, you know, I look at my question is taxation, theft, um, you know, my simple answer is it depends. I hate to, I hate to use that. It depends if it is theft, if it's financing a thief. But what I want to caution libertarians and others objectives and others to consider is, um, if you have a government that is not a thief, it should be fully financed and no one should be getting away with mooching. That is where my, my position is very different. I, on the one hand, I'm different because I believe government should exist. So I'm already off the anarchist, uh, bus, right? Speaker 3 01:01:35 But right Speaker 1 01:01:36 Within, okay, so, but then within <laugh>, Connie, you know, the, within the bus called monarchy mi limited government, I'm off the bus of objectives who say it should only be voluntary taxation. And apparently me and Murray Frank and I don't know, like two other people is very weird. I don't usually like to be in such a minority, but I don't really care, believe that if it's a legitimate government, then all taxational is legitimate and there should be no freeloaders. Now, the issue by the way of whether, uh, okay, you got a billionaire and a poor person, how, how would Salzman and Frank propose that they contribute? The bare minimum thing is something like a poll tax that is usually considered very nasty. A poll tax is just, poll means head per head. Like if you said everyone should pay a hundred dollars, so Bill Gates should pay a hundred dollars, and the poor schmuck who has no job should pay a hundred. Speaker 1 01:02:41 The poor schmuck would say, that's a burden to me. That's half my income and it's nothing to Bill Gates. All right, so the next level would be percentage. This is a little more plausible. The percentage argument would be 10% from everyone. So the poor person who makes only a thousand a year, you know, 10% would pay what? A hundred, right? Gil Gates would pay more, but it's still only 10%. Now, he'd pay way more, but this is closer to the Iran view that those who have massive assets or lots of interaction with the courts or government or whose plant and equipment, you know, would be most jeopardized and exposed in war and government national defense is legitimate. You could see how someone would say Bill Gates paying 10% and the poor per person paying 10%, they would pay different amounts in absolute terms. But there's a kind of justice associated with proportional taxation sometimes called, uh, flat tax. Speaker 1 01:03:50 And it's, it, it, I like it actually, it's a, it's also Aristotelian, but Ayn Rand would endorse it on the grounds that it's equal protection before the laws. Now we don't have any of this today because not only are there many, many, many taxes, but they're quote unquote graduated. They're quote unquote progressive. I hate that word, where the wealthier pay a higher rate, not because they use the services more, but because they have an ability to pay. And that's nasty. I mean, that's just punitive. That's, uh, Marxist. That's, you know, and they're being punished because the presumption is they have unearned wealth. They have unearned income, not just unearned. They got their income by exploiting and appropriating from those who have less. So the, the, the tax code today is totally worldwide, by the way. It's totally premised on the, uh, on the Marxist idea that the, these are ill-gotten goods. Speaker 1 01:04:54 Um, and that quite apart from the issue of we know that government has expanded way beyond what objectives would consider and monarchists and no Z's, no zens would say are the legitimate functions of government toward what? Primarily redistributing income, not providing the infrastructure like courts, police and military, which would permit people to create wealth even if in in equal amounts. But the premise today is we must massively redistribute Rob Peter to pay Paul. There is the robbery that is where taxation is theft. So let me be very clear here. I do believe taxation is theft if it's taxation by a thieving government. But Ayn Rand's point was about a fully free government, a fully free system, and she says, she said even then, uh, they should only be voluntarily financed. And that's where I differ. Speaker 3 01:05:51 Well, I mean, the factory remains that good ideas don't require force. So, so an entire, um, entire, entire change of culture would need to happen, you know? Did, um, did the need for services happen before you were taxed to death for them? You know, were there school mothers or Yeah. Or elderly or all of those things? Sure, there were, you know, people took care of people. So, you know, I'm, I'm a monarchist Dan, and I disagree on some of the things when it comes to taxes, but, um, you know, I think a, a fair tax could be at like more like a consumption tax. Yeah, Speaker 1 01:06:34 Yeah. Speaker 3 01:06:35 And, um, then you're not, um, if you're in court or haven't succeeded to where you're making gazillion dollars, then you're not just handed things. So, you know, there's lots of ways to write this ship, but taxation is definitely theft. It's taken from you before you've even received it in a lot of cases, depending on where you choose to live, you know, if there's an income tax. So, Speaker 1 01:07:05 And Connie, let me a let me, Connie, let me ask you, do you think, would you go so far as to say it always per se, is theft even with a fully free society, if the government in a fully free society with these limited monarchist functions, would you, that's really the question here. Would you say even then the government should never mandate payment? Speaker 3 01:07:30 Well, and I believe that there doesn't have to be a government to regulate these things. Ah, you know, okay. If you want to, you want to be a community and you want to have security, and you want to have, yeah, want to have someone to, um, adjudicate civil cases, whatever the case may be. Yeah, yeah. You wouldn't necessarily have to, to have it be a government to do those things. Um, but it Speaker 1 01:07:55 Is, it is interesting, Connie, that when, uh, people like Frank and I would, frankly, I would say me as brown when, um, Iran's position on the idea, as she clearly unabashedly endorses the idea, which by the way came from var. It's not unique to Iran. In 1921, max Aber, the sociologist famously defined a state as an institution with a monopoly on the legitimate use of force within a particular territory. Now that sounds like Iran, but it's actually a German sociologist. And I often teach Duke students. I say, now this is kind of the standard definition of what a state is, and interestingly, every side of the spectrum endorses it. They don't disagree, they just disagree about what the nature of the state should be. But those components are very interesting. And the key word is legitimate. And Ayn Rand would say, well, legitimate is only a government that protects individual rights. Speaker 1 01:09:07 Right? Others would say, the Nazis would say legitimate is, you know, exterminate the juice. But the whole idea of territory and borders today, very interesting. But, um, given that context, if you can objectively demonstrate what your legitimate, truly legitimate government is, you'd have to talk about financing. Now, she's criticized for saying monopoly. The anarchists would say, what do you mean monopoly? Why are you granting a monopoly? Which implies what? If there are any attempts to compete with this monopoly government in Connie, Connie in your terms, to have private security forces to have arbitration agencies, technically Iran would say, we get to prohibit those cuz they are challenging my monopoly. You can't have competing armies, you can't have competing police and courts. That was Iran's view. That is normally the monarch monarchists, who it's the view that the anarchists will say, what are you talking about? Speaker 1 01:10:11 You are prohibiting and initiating force. You claim you don't want 'em, you are initiating force against people who want to voluntarily provide these services. And Iran's answer would be a damn right, I am, but here's the problem, here's the problem. The problem is, if that's her view, then how can she also say, by the way, it should all be voluntarily financed because there's so many other things. And by the way, I haven't even mentioned things like the subpoena power or serving on a jury. Uh, Henman was asked, what about the subpoena power? What about the power of the government to compel you to testify in a case where you might have, you know, important and relevant evidence? And she said, yes. She said, yes, the government can compel you to show up. Same thing with jury charge. Now why is that weird? It's a little weird because on the one hand she said, you shouldn't pay, the government shouldn't have to pay the government taxes to support courts. Speaker 1 01:11:17 But you should show up in court. And if you don't, they'll jail you. It's very, we, it's very odd. It's incoherent, it's not consistent. It's a problem. And I'm, uh, believe me, a true blue objective. Who it, but it who, who is also willing to critique Iran if it doesn't make any sense to me. And I don't know about Yukon, but that makes no sense. I'm actually for the subpoena power, I'm for the, you must be on a jury, but at least I'm consistent with saying yes. And you must pay taxes. So you're not a freeloader. You can't get away with being a parasite and a moocher on this very wonderful system, which we're presuming to be a fully free society. And that was her context. Her context was not should, should people pay taxes to Leviathan. I don't think they should pay taxes to Leviathan. I think they should revolt. I think she should. I think they should tell Leviathan to go fuck themselves. I'm not finding, as long as you don't go to jail. Speaker 3 01:12:17 So where does it end? I do. So where does it end? And go ahead, Scott. But my point, I appreciate, we're just trying Speaker 0 01:12:24 To get everyone in, Speaker 3 01:12:26 Right? Everything's taxed, but a lot of people have no problem if I wanna trade my eggs with my neighbor for some cucumbers. They're like, yeah, you, you shouldn't have to report and do that. Yeah, but they suddenly have a problem. If I want to trade a couple of cows for a new truck, then suddenly, oh no, you can't do that. <laugh> well says who, you know, the voluntary exchange. So I'll land with that. And Scott, I do know you wanna get to some other Thank Speaker 0 01:12:57 You. I appreciate it. Speaker 1 01:12:58 Thank you Connie. Thanks. Thanks Connie. Speaker 0 01:13:00 Well, uh, Dale, thank you for your patience. Speaker 4 01:13:04 Oh, hello there. So, um, to me, uh, you know, taxation is definitely fast. I think it's all relative. It's if it, if it's affecting you. And I think that, uh, we have a real problem as a country because, um, so much of, you know, we're, we're, we're on a path of, uh, you know, un un unbridled, uh, movement towards more and more socialism because there are so many people who do not pay. And you look at like, you know, even like, you know, under a w uh, I think that we made like, you know, 40, 50% of the people not net payers and income taxes. So you've got a lot of voters out there that are just fine with expanding government. Then you have, and then with every program that we do create, it's always that we're we're there. You have a lot of freeloaders. So you, you've talked about this and to me, it's just a huge unspoken problem in this country. Speaker 1 01:14:04 Well, Dale, I wanted to say, I think that's a really good point. And here's what's, here's what's di difficult and subtle about what I'm arguing in today's context, uh, which is what you're rec citing. Taxation is theft. It's predominantly theft. Because if, if someone were to ask me, and they have asked me what part of government spending today, which is up to like 6 trillion, what part of government spending today is actually on something, an objectives would say is a legitimate government functions. My answer is one 10th, maybe even one half a 10th of what they're spending, because the rest of it is garbage. The rest of it is not only excessive, it's violating rights. So by my criteria that is theft because you have a thieving entity financed by theft. And so I just wanted to distinguish that from the kind of more, when Iran brought this up, remember the context, the context was in a free society. Speaker 1 01:15:09 How would you finance it if she were asked, how would you finance it today? Well, today in her terms was 1964. We were about to get, we didn't even have, uh, Medicare and Medicaid yet. But Dale, you're absolutely right. Now here, apropo, my theme though, you're absolutely right that today the numbers lay out something like this, the entire spending of government, what have they done? I I said earlier, they've moved away from taxing to borrowing and printing because if they taxed people for this gargantuan welfare state, they'd be thrown out of office on their As to be taxables. So these people have figured out it's brilliant actually in a twisted way. They have figured out that the way to finance this without being thrown out of office is to print money and borrow money. But, but Dale, even within, you know, this, even within the tax wedge of the pie chart, which is now a small part of what government spent, they have made sure that only a small fraction of people pay those taxes. Speaker 1 01:16:10 And so something like, what do they call them? The dastardly 1%, the fat cats, the 1% pay 25% of federal taxes. The top 10% of income people I'm talking about pay 43%. And here's the, here's the key for electoral success. The bottom 50%, the bottom 50% of Americans in terms of income pay 4% of federal income taxes. What does this mean? This means that during elections, when a politician says, I have a great spending program here and I'm gonna tax the fat cats, they win. They win the election. So the bias is a and big why? Because the 10%, 1%, they're obviously in the minority. They're literally the exploited minority. They're in the purum of ability, as ire would put it, it at the top. They're clearly gonna be outvoted in a system where democracy is unrestrained. And that is exactly what's happening. So, so I would put it this way, unrestrained democracy leads to fiscal profligacy. Speaker 1 01:17:25 There's like an inherent bias. You will win elections if you simultaneously promise more spending. We know what party does that, but there's another party that says, I promise tax cuts. I like the second party more than the first. But the point is, you see the math here. The math is if there's more spending and less taxing, there's gonna be a budget deficit. There's gonna be borrowing, there's gonna be a government that borrows the difference. Instead of, and then they're gonna at some point turn to their pet central bank and say, could you please buy all this stuff? Could you please buy all this debt? What's called monetizing the debt? Engage in what, what's their favorite phrase? Qe, quantitative easing. It's, uh, this is not new to you, Dale. I just wanted to say it for the general audience. That's, that is the very disturbing public finance angle sides side of the gargantuan unsustainable welfare state. Speaker 1 01:18:24 But they don't see it as unsustainable. Their view is, this is brilliant, we're gonna keep pushing this and, and never tax people to the point where they feel the full pinch of stateism. It is very disturbing. Uh, economists call this fiscal illusion by the way that the general, the general public does not know they're, they're diluted. They do not quite know what the full burden of government is because if it shows up as inflation, if it, you know, too much money, they'll blame the grocer. They'll blame the gas station attempt, you know, if it shows up as higher interest rates as the government's borrowing. So they'll blame the mortgage lender, what the, why are you charging me so much? See, it's brilliant because they look at the effects, not the causes and the welfare state, you know, although fundamentally unsustainable, it does get perpetuated by unrestrained democracy. Speaker 0 01:19:28 Great answer. Thank you. Um, we've got Buddha who's been waiting very patiently. Thank you Buddha. Dale, did you have a follow up? Speaker 4 01:19:44 Well, yeah, I was just gonna say that also another part of that, Richard, is the, uh, the sense of entitlement that, that I encounter as someone, as someone, you know, a senior citizen that nobody, nobody, none of my fellow seniors have any clue that, you know, 60% of Medicare is B and d and that 75% of that is coming from the general revenue. Yeah. They all feel paid FICA for a and therefore it's all free. And that's their stuff. This, this is so bad <laugh>. Speaker 1 01:20:15 Right, right. Actually, that, that alone is brilliant because everyone knows they paid in something, right? Dale? So if you, so if you say to them, we're gonna take, we're gonna take that away from you. It, it is a certain injustice because you did pay into some. But the thing is, a Ponzi scheme, they don't, they don't tell people that. So in a way they don't really have full title morally or fiscally to the amount. But it's a brilliant, whoever constructed the system is, well, it started with, uh, long ago under, uh, Bismarck, it's a brilliant system because the whole concept of entitlement, the phrase Dale title means ownership. Who's again, who could be again, what are you taking away my ownership? It's brilliant. What are you taking away? I contributed to this. What do you take away? And yet it's an unsustainable Ponzi scheme. You're absolutely right. I, uh, my, I noticed this to my father when I was younger. My father was rail against social security as a Ponzi scam. He was a conservative, but he was like 38 years old, then he was 68 years old. He would say, Richard, I hate social security, but god damn it, I'm not gonna vote against, um, reductions in benefits because I'm, because I'm now the beneficiary. The welfare state is brilliant in that regard. Creating, dependence, you right? Creating, um, large infants who need them. It's brilliant. Speaker 4 01:21:57 And of course, within, you know that then the, for social security, the, um, the wealthy get less of a return on the taxes they paid. Yes, yes. They also taxes. And with Medicare, the, the wealthy, which is only a very small percentage right now, you know, gets surcharged for their Medicare. Um, yes, Speaker 1 01:22:16 Yes. Speaker 4 01:22:16 That's probably only like 5%. It's like 5%. So again, it's the same old game where it's, you know, yeah. To me, you know, to, if you're paying those taxes, it's theft because you look around and everybody else is a front loader. Speaker 1 01:22:29 So it is yes and no. And notice recently Biden and then state of the Union would say, Hey, Republicans are trying to like, uh, cut back on social security, Medicare. And the Republicans would stand up and say, no, we're not. Uh, no, we're not. No, we're welfare status. Just like you are. It, it's so far gone now. There's no one willing. Trump said the same thing, right? When Trump ran in 2016, I'm not gonna touch social security or Medicare. Okay? My attitude is what are you good for? Unless you were willing to attack the welfare state. You come in, you, uh, you endorse the welfare state. And then what do you add to that? You engage in Hoover, like protectionist schemes that ruin us. And then you enable this dictator called fauci. Uh, thanks a lot. What, what, what have you. And then you partially build a wall. Like what's the point? What is the point of any of that? It's not helping, it's hurting, but, you know, that deal. Speaker 0 01:23:30 Great. Thank you. Uh, Embudo. Speaker 5 01:23:35 Yeah, thanks for, uh, waiting for me to get my mic together. Uh, my question is, um, if we don't pay taxes, how do we fund the government? And go ahead. Speaker 1 01:23:56 Well, Bo, my, my argument is we should pay taxes, but only to fund legitimate government. And in my philosophy, legitimate government is roughly one 10th of current government. So in the US case, the federal government spends, last time I checked 6 trillion, if it were legitimate, it would spend 600 billion, one 10th of <laugh>, one 10th of 6 trillion. And, and if, if, if that happened, okay, let's say not overnight, if that happened over the next 10 years, people would get massive tax cuts. Cuz they wouldn't have to fund 6 trillion, they'd only have to fund 6 billion, 600 billion. Um, by that point, the tax mix, the tax by mix, I mean is it on property? Is it on sales? Is it on income? Would um, wouldn't have to be as broad as it is now. And the tax rates themselves would be much lower. People have to realize that. Speaker 1 01:24:58 If you look, if you just search the internet and say, how did the government, US government fund itself, you know, in the early century, totally by tariffs, that's one tax on imports. There was no income tax, there was no sales tax, there was no property, there was nothing other than that. It was a really light tax burden. Why? Because government itself was not gargantuan. So, um, that's the an, the answer roughly Buddha is, um, of course people have to pay taxes for the existing government. The question is why is the existing government so big? And therefore taxation becomes burdensome, punitive, whole bunch of other things. But it needn't be that way under, under legitimate government, not anarchy. Where there's no government under legitimate government is very easy and fair and just to finance it. But every aspect of government financing today is unjust. It's punitive, it's nasty. Speaker 1 01:26:05 The, the graduated income tax, if you know that what's called so-called progressive, where the more money you make, the higher the rate you pay. That has nothing to do with trying to finance government. Cuz the laugher curve and others show that the higher the tax rate, the more people will evade taxes. They're not gonna sit there and be, um, sh you know, shrn like sheep. They will move their income. They will work less anyway. Um, be these people don't care. They don't care if the burdensome tax rate makes people disincentivized to produce or, but it's an Atlas shrug type theme. When you look at Ironman's, um, theme, an atlas shrug, why do they shrug? Why do the men of the mine the most productive, not just business people, but engineers, artists and other, why do they say, I'm outta here, I'm not gonna put up with this shit because they know they're morally producing values and that the government is an immoral, um, uh, promiscuous, vicious robber. Speaker 1 01:27:15 And that's, that is happening in the US today where the U <laugh>, the US government is in a rapacious trend and they can't get the revenues. That's very revealing. They can't, they can't get stu uh, studies have shown, look up the Houser's rule. Houser's rule is no matter what the government does, it can't get more than 20% of gdp no matter what tax rate, no matter what regulation, no matter what loophole, they cannot extract more than something like 20% of what the American people earn of gdp. And yet they spend way more than that. So they're in a, they're stuck <laugh> because they're trying to spend 30, 40, 50% of GDP and they can only extract 2020 every year, year in, year out. <laugh>, it's like Americans are saying, go ahead, try to get my money, try it. Just try. I might talk a good game and I'm a so, so-called, you know, socially, uh, humanitarian, but I'm not paying. I'm gonna call my tax attorney and, and shelter my income. Uh, it's called Houser's Law. It's very interesting. Speaker 0 01:28:33 Well, uh, this is a great topic, Richard. Great discussion. Um, you know, we're gonna do this again, Jimmy. I'm sorry we didn't have time to get to your question, but, uh, with David Kelly, we're hopefully gonna do this topic again and even maybe good get into a more direct and cap debate. But, um, yeah, Speaker 1 01:28:51 Good Speaker 0 01:28:52 Coming up. Uh, next week Wednesday at 5:00 PM Eastern, we have Rob Rasinski talking about art and aesthetics. And then Thursday the 18th, Richard is back here on clubhouse at 6:00 PM Eastern with Ask Me Anything. So, uh, we can get into those topics as well. Uh, we've got all our scholars in Nashville, July 27th through 29th, including James O'Keefe as our keynote speaker. Should be a great time in Nashville. Hope you can join us there at any of our events. Uh, take care and we'll see you all next week. Speaker 1 01:29:24 Scott, thank you. Dan, Dale, Buddha. Connie, thank you so much, all of you. Thank you. Thank you.