From my blog, 2009:

Objectivists say they are against taxation; they say that you can fund a state by some kind of contract fee or lottery system. Obviously, you can’t, not without the state compelling membership or outlawing competitors, which permits them to charge monopoly prices which amounts to a tax.

But Objectivists are strongly pro-intellectual property (see Why Objectivists Hate Anarchy; IP: The Objectivists Strike Back!). They believe you deserve to be rewarded for creative, innovative, inventive action. But note that they also are extremely fond of the American Constitution and Founders; they believe the Constitution is a great achievement of the intellect–this corresponds with their belief that a proper state, such as the original American state, is a great value to man. Well, put two and two together: the Founders gave us a great creation: the Constitution, and our system of government. We all benefit from it. It’s only fair that the Founders charge us a royalty for our use of their creation–and naturally, the state itself is the agency as the natural successor to its parent-creators, the Framers and Founders, to inherit and manage this royalty-collecting right. Don’t call it a tax–call it a royalty.