There seems to be a movement as of late pushing for a tax hike on the wealthiest Americans. This coalition includes President Obama, the Occupy Wall Street protesters, and even fellow columnist Brett Frazier.
Indeed, one cannot ignore the cries lamenting the fact that the top 1 percent control 70 percent of all the wealth in this country. We need redistributive justice to ensure that the rich are paying their fair share, or so they say.
It would be easy to dismiss such a tax increase proposal by pointing out that the top 10 percent already pay 70 percent of all income taxes, or that the cycle of poverty/wealth is largely a myth in America (80 percent of millionaires are first-generation), but neither of these objections directly address Frazier’s arguments, which I intend to.
His two major justifications for increasing taxes on the wealthy are that there are arbitrary factors involved in the acquisition of wealth, and that the wealthy owe something to the community that supported them.
On both points we’re actually in agreement, only I contend that these observations don’t support his proposal.
Anyone who takes the time to observe the world as it is will have to come to the conclusion that people are different; natural talents are not distributed on an equal basis. There is also obviously an inherent advantage to being born into a family of certain qualities.
Undoubtedly our society does not operate as a “genuine meritocracy”, but does this fact compel us to make corrective action, or more importantly, is corrective even possible?
We’ll have to address both merit and equality of opportunity to better understand the problem.
While it is true that there are arbitrary factors involved in the financial success of individuals, it does not follow that all success is due to luck.
Surely merit exists, and therein lies the problem. How can anyone determine what distributive justice ought to be for more than 300 million people? Nobody has the knowledge to possibly determine whether wealth was accumulated due to luck or merit, therefore those interested in “corrective action” can never really enact true distributive justice. Instead, they propose an across the board tax increase with the assumption that everyone at the top of the economic ladder arrived there based purely on arbitrary factors; their analysis completely leaves out the possibility of effort and lumps everyone into the same group.
The second term that must be further discussed is equality of opportunity. According to Frazier, “Arbitrary factors that give some people greater opportunity than others violate the principle of equality of opportunity.”
Again, it is obvious to anyone that true equality of conditions does not exist; however, the aspiration of equality of opportunity is misunderstood in this sense. Most advocates for equality of opportunity realize that in the real world, we can never achieve perfect equality. Much like the statement in our own Declaration that “all men are created equal”, it is meant to communicate that we all deserve equal treatment under the law, that we have the same rights as citizens.
Moreover, the rule of law is in direct confrontation with this sort of cosmic justice which Frazier appears to be advocating, because the rule of law means applying the same rules to everyone, regardless of circumstances or inequalities. Rather, he would have us rely on some arbitrary sense of justice (which he lacks the absolute knowledge to truly fulfill) targeted at different groups.
Additionally, in the subsequent article, he argues that the wealthy ought to pay taxes because they owe something to the community. This is an obvious truth to everyone, excluding perhaps anarchists. Taxes are required to protect life, liberty, and property.
Furthermore, the wealthy ought to pay more than those with less due to the simple fact that they have more property to protect; they have more at stake.
But if it were the case that all the government restricted itself to were law enforcement, roads, schools, firemen, and basic utilities, we’d be living in Ron Paul’s libertarian paradise.
The federal government currently rakes in $2.1 trillion annually, add state and local, and that number climbs to $4.5 trillion. The debate isn’t over the existence of taxes, but whether further revenue is justified when we continue to spend billions on unnecessary wars, out-of-control entitlement programs, and regulations which siphon roughly $1.75 trillion annually.
We ought to expect a better budget solution from our representatives than a tax increase, which in itself is insufficient to closing the budget gap and foolish during a time of economic hardship.