Comment & Debate
James A. Dorn. “Ending Tax Socialism”. CATO Institute. 13 Sept. 1996 – Under progressive taxation, on the other hand, there is a constant temptation to raise tax rates on the rich to pay for new programs. At the limit, persons with high incomes may face a marginal tax rate of 100 percent, while those with low incomes pay nothing. (During the 1950s marginal tax rates exceeded 90 percent in the United States.) That’s tax socialism in spades.
If we let constitutional principles be eroded by majority rule, in the name of social justice, then both freedom and true justice will be lost. Progressive taxation is not a virtue but a vice. It presumes that the property rights of the wealthy are not as sacred as the property rights of the poor and that the values of the majority are superior to the rights of the minority.
Those who support progressive taxation pretend to be on the moral high ground but, in fact, they have no ground to stand on. Envy, not justice, is at the root of the argument for discriminatory taxation. That is why those who most strongly advocate progressive taxation are in favor of the welfare state. “Law is the bond of civil society, and justice is equality under the law,” wrote Cicero. If we are to restore civil society and move from tax socialism to tax justice, we need to abolish progressive taxation, institute a fair flat tax and limit the size of government. Otherwise, class warfare and welfare will prevail.
Andrew Sullivan. “‘Progressive’ Taxation”. The Daily Dish, The Atlantic. 27 Jun 2008 – For the record, I was talking about higher gas prices not taxes in the post John mentions. But he does get to a core philosophical disagreement here, one that puts me, I know, far out in right-field. To put it as plainly as I can: I don’t believe in a governmental attempt to engineer a substantively “fair” society through taxation. I see taxation as a necessary evil to pay for those few social goods that private individuals cannot provide for themselves. And the mode of taxation, in my view, should be as simple and as market-friendly as possible and should treat citizens equally, irrespective of their incomes. I believe in formal equality and a very limited state, not substantive equality and the welfare state. I know this is pie-in-the-sky, given our current Byzantine tax code and the entrenchment of certain socialistic assumptions in our political culture. I don’t expect any radical change any time soon. But I’m not going to enable this kind of thinking without a challenge to it.
So yes: a flat tax so far as possible for as many as possible and no deductions. That’s my goal. How that differentially impacts the lives of citizens should not be government’s primary concern.
“Immorality of Progressive Income Tax”. The Frugal Libertarian (Libertarian). 14 Oct. 2008 – I am certain that most people would agree that stealing would not be considered a moral act, even if what was stolen was given to someone who needed it more than its original owner. Imagine someone walking into your home and taking $10,000 off your table, walking out the door, and giving your $10,000 to someone else. There are few who would stand for this, but every year we allow the federal government to essentially do the same thing with little more than a grumble on tax day. We would fight off a burglar in our home, but do nothing to fight off the government burglar who pilfers from our coffers.
Now some may say that this analogy is absurd since by living within the border of the U.S. you have consented to the taking of your money. I would agree that by living somewhere you are essentially signing a contract, but the contract of the U.S., the Constitution, has long ago been voided by the federal government’s breach of that contract. If they do not act within the authority given to them by our most sacred contract, then I have not consented to them taking my money.
So how can taxes be collected in a moral manner? A moral tax would need to be neither progressive or regressive, but instead neutral and then that revenue would need to used to further “legitimate government interest” within the limits of power and authority granted by the Constitution. I believe sales tax on all end products except for food, housing, some transportation, and a short list of other necessities, would be the most neutral of
David N. Mayer. “Wealthy Americans Deserve Real Tax Relief On Principle”. Ashbrook Center. October 1999 – Because it discriminates against individuals simply because they have higher incomes, a progressive income tax also violates another fundamental principle of our constitutional government: that individuals are equal under the law. The minority of Americans who shoulder the federal income tax burden are denied the equal protection of laws. Moreover, when we consider the full impact of the federal budget, it is clear that the federal income tax is an integral part of a massive redistribution of Americans’ wealth. Thus, it constitutes “class legislation”—the type of law that “takes property from A. and gives it to B.”—which, as Supreme Court Justice Samuel Chase noted in 1798, violates “the great first principles of the social compact.”
Edwin R. A. Seligman. “Progressive taxation in theory and practice”. American Economic Association. 1894 – A Theory of Justice
To make a tax acceptable, it must be levied in accordance with a theory of justice that is an article of faith with the majority. When justice, or the appearance of justice, fails, revolt is inevitable: the Puritan Revolution in England, the American Revolution of 1776, and the French Revolution of 1789 are all cases in point. The theory of justice behind the progressive income tax is that it imposes “equality of sacrifice”—and as long as this is believed, the tax will be palatable to a majority. “Equality of sacrifice” is the democratic way.
Time was when the progressive tax would not have been accepted as equitable even by a majority of the poor. Traditional equity required that taxes should be levied proportionately, not progressively. This was in accordance with the belief that’ a man’s property, or his income, was an index of deserving achievement, or of value contributed in the market place to society. True, some men inherited their property or incomes—but that was something to be handled or regulated under laws of inheritance. In any case the erosion of time could be counted on to take care of the inefficient use of inherited fortune—“shirtsleeves to shirt-sleeves in three generations” expressed the common wisdom in this matter of luck in the choice of one’s parents.
Under the proportional theory of tax equity, a rich man would pay more taxes than a poor man, naturally. But every dollar of assessed property value, or of income, or of spending, would be taxed in equal amount, at flat ‘percentage rates. Dollars would be treated equally, no matter who owned them, or spent them. Thus the citizens would be accorded the “equal protection of the laws”—and their “privileges and immunities” would be equal, as provided for in the United States Constitution. Any other way of treating taxation was regarded as discriminatory, or as putting penalties on ability, ambition, and success.
It was Marxian socialism—“From each according to his abilities, to each according to his needs”—which fathered the great attack on proportional tax equity: a “heavy graduated income tax” is a salient feature of the Communist Manifesto of 1848. But the Marxians would have made little headway if non-Marxian economists had not come unwittingly to their support with the theory that “it is not equal to treat unequals equally.” In cases of charity, this is undoubtedly true, but no comprehensive legal system can be reared on a rule which begins by regarding everybody as an exception.
Rudolf von Gneist said that progressive taxes meant the abandonment “of the most sacred principle of equality, which provided the only barrier against encroachment on property.”[1]