Skip to main content

Ayn Rand and Taxation

Ayn Rand is a hero of libertarians and other advocates of limited government. Many of her fans complain about progressive taxation and favor a flat tax. A progressive tax system is one in which the tax rate is higher for larger incomes, profit, or sales cost. A flat tax system is one in which the tax rate is the same for all incomes, profit, or sales cost.

Most proponents of flat taxation argue that having the wealthy contribute a disproportionate share of their income towards the government's expenses is unfair and wrong. They may even quote Ayn Rand as part of their argument.

I don't want to argue for or against a flat tax here. But I do want to dispense with the notion that Ayn Rand opposed the wealthy contributing a disproportionate share of their wealth or income to the legitimate operations of government.

The money quote is from Ayn Rand's The Virtue of Selfishness:
It is in their own interests that the men of greater ability have to pay for the maintenance of armed forces, for the protection of their country against invasion; their expenses are not increased by the fact that a marginal part of the population is unable to contribute to these costs. Economically, that marginal group is nonexistent as far as the costs of war are concerned. The same is true of the costs of maintaining a police force: it is in their own interests that the abler men have to pay for the apprehension of criminals, regardless of whether the specific victim of a given crime is rich or poor.
Almost sounds like class warfare rhetoric, doesn't it?

A couple of subtleties and qualifications:

First, recognize that Rand believes the government's only proper role is defense, enforcement of contracts, and law enforcement. Rand's opinions on the funding of government therefore cover only those expenses.

Second, Rand did propose a flat tax of sorts but it was voluntary:
[T]he cost of . . . voluntary [my emphasis] government financing would be automatically proportionate to the scale of an individual's economic activity.
Rand pointed out that most of the poor, since they have little at stake, would likely not contribute at all. So what may have appeared to be advocacy of a flat tax in fact more closely resembles progressive taxation in its effect.

A pure disciple of Ayn Rand therefore must therefore favor not only a minimal role for government, but a progressive system of funding it.

Comments

Popular posts from this blog

Why Spreadsheets Suck for Prioritizing

The Goal As a company executive, you want confidence that your product team (which includes all the people, from all departments, responsible for product success) has a sound basis for deciding which items are on the product roadmap. You also want confidence the team is prioritizing the items in a smart way. What Should We Prioritize? The items the team prioritizes could be features, user stories, epics, market problems, themes, or experiments. Melissa Perri  makes an excellent case for a " problem roadmap ", and, in general, I recommend focusing on the latter types of items. However, the topic of what types of items you should prioritize - and in what situations - is interesting and important but beyond the scope of this blog entry. A Sad but Familiar Story If there is significant controversy about priorities, then almost inevitably, a product manager or other member of the team decides to put together The Spreadsheet. I've done it. Some of the mos

Use Case as a Black Box

Consider the following use case: Purchase Items Actor: Purchaser Precondition: Purchaser types at least thirty words per minute and has a web navigation efficiency rating of at least 40. Postcondition: For the average Purchaser acting at full efficiency, the number of seconds elapsed is no more than 30 + 20 * n, where n is the number of items purchased. The name of the use case represents a functional requirement. What does the product do, or enable the user to do? Purchase items. What are we to make of the preconditions and postconditions? What relationship do they have to the requirements for the product? Answer: the preconditions and postconditions are the nonfunctional requirements attached to the functional requirement . Another way of expressing the nonfunctional requirement would be as an attribute and associated constraint: Usability: For a Purchaser who types at least thirty words per minute and has a web navigation efficiency rating of at least 40, it shall take no

Henry Ford's "Faster Horse" Quote

You may have heard the ( apocryphal ) Henry Ford quote: If I'd asked customers what they wanted, they would have said "a faster horse". Over at the On Product Management blog , Saeed gives his take on this infamous quote. He "hates" it, and gives some compelling reasons. Saeed is spot on in his explanations. Personally, I think the quote is great, but it's a matter of interpretation. The valid point of the quote is not that it's a bad idea to facilitate a conversation with your market to better understand it. The valid points are: You must ask the right questions to get valuable answers. You must interpret the answers thoughtfully - often outside their direct meaning - to glean reliable information. Asking questions is not always the best way to "listen" to your market. (E.g., sometimes pure observational studies are more reliable.) Nonetheless, I find the quote is helpful to combat "armchair product management" in the