As a result of its draconian tax laws, the first Galactic Government – the Foundation – was forced to explain the difference between a Citizen of the Galaxy, who would be expected to pay tax, and a non-Citizen, who would be considered tax exempt until certain conditions were met.

These conditions were twofold:

First, a citizen had to belong to a society that was recognised as benefiting from intergalactic travel. This condition was required after a number of attempts to collect tax from worlds incapable of space travel resulted in large wars and accusations of planetary invasion lodged against the tax collectors.

Second, a citizen had to belong to a species recognised as being intelligent. Imposed after a failed attempt by the Foundation Revenue Service to tax a planet's insect population, the measures used to define intelligence were under constant review to allow the fledgling Foundation to massage unemployment figures to avoid the payment of benefits. Thus, as unemployment rose, the population of the Galaxy fell.

The downside of these conditions was that non-citizens were excluded from Galactic Planning Consultations which left them in danger of having their worlds demolished by the construction of a Hyperspace Bypass through their star systems.