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I always vote for higher taxes.

March 9, 2011

As an advocate of high taxes and wealth redistribution I often find myself arguing with people about the rights and wrongs of progressive taxation. Many people are not satisfied with the idea that the rich should pay more tax because it is ‘fair’ and resistance to such arguments seems particularly high in the United States where the idea that the federal government should provide any kind of service to the people is seen as subversive communism. In these debates the right tends to make the case that people have the right to keep what they have earned based on the right to private property. There are, I think, two aspects to this argument; an economic one and a philosophical one.

Taxation is used to pay for services such as education, policing and healthcare (at least in the civilised world). The case is sometimes made that the rich use these services less than the poor – they can afford private schools, private security guards and private healthcare – and that they should therefore pay less tax. This argument can only be made by someone with no grasp of economics. Let us consider the wealthy owner of, for instance, a supermarket chain (a modern equivalent of the factory owners of the nineteenth century). He or she may not use any of the services mentioned above and thus is, in effect, paying for the education of complete strangers. The fact is, however, that many of these strangers are employees of the supermarket. Even with a decent top level of tax it is surely cheaper to pay tax than to have to pay to educate every single employee of the chain, to provide them with healthcare, to build roads on which they can travel to work, etc. Any employer benefits more from the state than his or her employees do and these benefits translate directly to higher income.

What about a harder case though? Let us consider a millionaire footballer who does not employ anyone (except possibly domestic servants and sex workers). We must look at where his money comes from. The consumers of football spend money on tickets and memorabilia and subscriptions to satellite television. Their ability to afford these things depends on their ability to earn which, in turn, depends on education and health. So, we can see again, that state services help to put money in the footballer’s pocket. The fact is that economic growth depends on education and healthcare. Anyone who is wealthy is benefiting directly from the economy which depends on state investment in schools and hospitals. Literate and numerate workers who are rarely sick are more productive than illiterate and innumerate workers who spend half the year in bed. The rich benefit disproportionately from this and should therefore contribute disproportionately.

 

Jean-Jacques Rousseau 1712-1778

So it makes economic sense that the rich should pay more tax. At this point the conservative or liberal often invokes the concept of inalienable rights to private property. The fact is that I have never been able to find any philosophical argument for a moral right to private property. (If you have one please let me know.)  This is not to say that there may not be good pragmatic reasons to recognise private property in the legal system, however, we should then acknowledge that this is a convenient fiction. Rousseau said that the original sin was when the first man (it was probably a man) enclosed a piece of land “and took it into his head to say, ‘this is mine.'” The idea of a person declaring ownership of a tree or a litre of sea-water or the Olympus Mons is clearly arbitrary and preposterous. On what basis could this claim be made? Perhaps whoever shouts ‘this is mine’ loudest should have the right to private property, or the one who gets to a place first. There is clearly no moral basis here, yet all our property, my books and your clothes and our bank balances, are based on this flimsy premise. To suddenly and arbitrarily declare that something which just exists is now under ownership and therefore inaccessible to others is, in Rousseau’s thought, the real root of all evil and the reason for Proudhon’s famous saying, ‘property is theft’.

We can see that our concept of private property throws up some bizarre consequences. If you buy a piece of land and then discover that it contains buried treasure why should that belong to you? It was not what you paid for and must have belonged to someone else previously. Conventionally inheritance customs would dictate that the trove should go to the descendants of the person who buried it, but many people would feel morally aggrieved if they discovered treasure only to have it taken away. A musician who spends a day writing and recording a song which happens to capture the public imagination may be able to live the rest of her life on the royalties, while many other musicians work hard all their lives for little reward. Most artists are not rewarded in proportion to either the effort they expend or the quality of their work but rather by the arbitrary standard of public taste (or lack thereof). These strange quirks of our system are a result of the fact that it has no rational or moral basis.

Even if we were to accept ownership of land and goods, money is a separate issue and more directly relevant to taxation. Money is a collective illusion, a symbol, it has no intrinsic meaning or value. In this sense, as its meaning is only created collectively, we might argue that it cannot be owned by any one individual. It belongs to the community which agrees to believe in it and the state, as the collective expression of that community, has a right to it which trumps the rights of any individual. The rich person who disagrees is perfectly free to leave the society, with all their money, and live in a cave where they will soon find that banknotes don’t last long as fuel and don’t contain nearly enough calories to ensure a long life.

Once we understand that rights to property in general and money in particular have no moral basis our discussions about wealth redistribution become practical negotiations rather than moral disputes. We can see that the political right assert sacred property rights as arbitrarily as Hindus assert the sacredness of cattle. We can confidently ignore their cries and work on how the redistribution of wealth can produce a society in which we wish to live. In Du Contrat Social, Rousseau points out that if we grant that every citizen has the right to a house it follows that no citizen has a right to two houses. We could start to build this society by taking houses from those with two and giving them to those with none. There is no moral reason not to.

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From → Philosophy, Politics

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