Taxation is theft. We accept that as a basic premise. Given that, how, then, do we finance the government? Ayn Rand addressed the problem in an essay “Government Financing in a Free Society,” in _The Virtue of Selfishness_. I believe that Ayn Rand was wrong on several specific points. Her premises were correct, but, as she indicated, this is a complex problem, and she herself warned that it requires future development.

"The question of how to implement the principle of voluntary government financing—how to determine the best means of applying it in practice—is a very complex one and belongs to the field of the philosophy of law. The task of political philosophy is only to establish the nature of the principle and to demonstrate that it is practicable. The choice of a specific method of implementation is more than premature today—since the principle will be practicable only in a fully free society, a society whose government has been constitutionally reduced to its proper, basic functions." (Online at http://aynrandlexicon.com/lexicon/taxati...).

Rand suggested both a lottery and "contract insurance" as examples of voluntary payment arrangements. Here on Galt's Gulch, discussing "Contradictions in the Constitution" khalling made this point: "There is no valid argument for an income tax. On top of that the income tax is inconsistent with the 1st amendment, 4th amendment, and 5th amendment. Only a non-coercive tax system is consistent with Natural Rights. Rand and others have proposed several non-coercive tax systems. Until the income tax the federal government was mainly funded by import duties. While these were manipulated for political purposes, see Carnegie, this is close to a non-coercive tax. However, you can never support a welfare or military state on these non-coercive taxes."

Import duties are no less confiscatory than incomes taxes. Who decides what is to be taxed and what duty-free. Typically, we tax things we want to keep out. So import duties become tools for advantage as one person gets another's imports taxed. khalling also pointed to certain legal problems with an income tax - that you are required to testify against yourself, and to allow search without warrant. But that applies no less to an import duty.

As for Ayn Rand's own proposals, when you contrast the present state lotteries against the illegal "numbers rackets" of the Mafia era, you have to see the value in the Mafia. When I was growing up in Cleveland, you could buy a 25-cent wager at a local tobacco shop. The winning 3-digit outcome was published every day in the morning paper as the daily Federal Reserve cash on hand. Take the dollars and cents. Everyone knew. And the 1/1000 odds paid out 500-to-1! Today, the state lotteries are super secret money sinks that have not at all helped to save their public schools - which was the original promise. Billions are gone from productive investment.

Contract insurance is problematic on several grounds, the first of which is that the courts are supposed to exist for every citizen. If you need to buy additional justice, then that is justice denied.

Moreover, large entities - corporations, businesses in general - already in Ayn Rand's time and all the more today - do have private contract insurance. Read almost anything you sign. It may well specify arbitration. You can still sue in a government court - that is your right - but you agree first to arbitrate ... and perhaps to agree to BINDING arbitration. Check it out.

I have no easy answers. Public broadcasting runs "listener support" fund raising campaigns, in which they give out promotional items for money. The government might do the same thing. They already had a scheme that you could pay to sleep in the President's bed. Maybe for a million dollars, you could have the Declaration in your living room for a day... And for $20 you get a coffee cup with the logo of your favorite federal agency...