House of Eratosthenes

The nonexistent case for progressive taxation

Progressives are increasingly preoccupied with income inequality, and their current hero, Sen. Bernie Sanders (I-Vt.), favors increasing the tax system’s progressivity. So, in this 103rd year of the income tax, it is timely to note that there still is no intellectually sturdy case for progressive taxation.

Arguments for it are invariably arguments for increased equality of social outcomes. Because individuals have different vocational desires and different aptitudes for adding value to the economy, inequality is inevitable. Because individuals have different social sensibilities, opinions will differ about what degrees of inequality are intolerably unlovely. But inequality, even when unlovely to some, is unjust only when it arises from unjust social arrangements…

“Individuals have different vocational desires and different aptitudes for adding value to the economy” — that is being most charitable. We don’t talk too much about what interferes with that. Every now and then some politician or pundit will make some noise about “education,” when they may or may not be referring to the process of actually educating anybody, because the buzzword affords an opportunity to force the expenditure of Other People’s Money.

But “adding value to the economy,” when you get right down to it, and in the context of what ordinary people expect to be discussed under such labeling, has to do with people helping other people. There are those among us who simply aren’t into it. So for the altruism-challenged, the free market forms an attachment between the helping of others and the enrichment of oneself; it’s an incomplete solution, for there are some among us who still aren’t interested.

We deal with that particular problem, by refusing to discuss it. You won’t see it inspected or probed, or even mentioned, on Sunday morning talk shows. It’s up to crazy wild-eyed right-wing bloggers like me. Which is a bit odd, really, because doesn’t everyone have one friend or relative like this? At least one?

There are people who hate money. No seriously. They bring it home, and figure the odds are stacked against them because after they’ve paid the essentials and made the minimum payments on the credit cards, which are maxed, there’s nothing. If this is ever discussed anywhere, it leads to some dirge about how the situation came to be, the high debt is the aftermath of some health crisis or what-not…but, nobody ever plotted a decent course forward by looking back at where he’d been. The real issue is that if the debt wasn’t high, they wouldn’t know what to do. If the debt was somehow gone tomorrow, and they had ten grand in the checking account, they wouldn’t see it as the end of a calamity but rather as the beginning of one. The money would represent an unfinished task, an unsolved problem.

Hand them $50, they start looking for things that cost $60. These are people who will never have money left at the end of the month. Ever. Because the simple fact of the matter is that isn’t what they want to have happen.

Such people have a comfort zone. It’s over there. Starting a savings plan and sticking to it…that’s off someplace else. High debt and low cash reserves, that’s all part of the zone. If they’re making as much as they’re ever going to make, and “happy” with that, because developing a new skill and finding new ways to help other people would be becoming a cog in “the machine” and that’s just a non-starter — well then, the simple truth of the matter is that there’s no journey ahead of such people, no road for them to travel, they are where they want to be.

Sometimes they put things on the backs of their cars to show off their insanity…things like this…

Isn’t that funny? Makes you want to say something like…”Ooh! I’ll vote the way you vote then, and maybe I can be poor too!”

We’ve done nothing to “fix” this; even worse, we haven’t even begun to discuss it. Haven’t even come up with a name for the mental illness. Our “solution,” thus far, is to mold and tailor the capitalistic system to suit people who have no desire to participate in it. This is a plan that can “accomplish” a lot of things, but making the system healthier can’t be one of those things. But there is no defined goal, anyway. What should a progressive taxation reform be trying to accomplish, exactly? Poor people end up with more cash? Rich people end up with less? Both? Neither?

Will continues…

Progressive taxation reduces the rewards of investments and the real rate of return on savings, thereby encouraging consumption over saving and hence over capital formation. When progressive taxation slows economic growth, it makes inequalities of wealth more durable by retarding the accumulation of new fortunes. And by encouraging constant tinkering with the tax code to perfect equity, progressive taxation gives a patina of altruism to rent-seeking by economic factions, whereby government enriches those sophisticated at manipulating it.

Because other arguments produce only “uneasy” cases for progressive taxation, this is the argument of last resort: All striving occurs in, and all success is conditioned by, a social context. Each individual’s achievement, like each individual, is derivative of society, which is entitled to socialize — conscript — whatever portion of each individual’s acquisition that society calculates is its rightful share. Because collective choices facilitate individuals’ strivings, the collectivity, represented by government, can take as much of created wealth as it decides it made possible. Being judge and jury in its own case, government will generously estimate its contributions and entitlements.

Bull-eye. Progressive taxation creates a government-to-citizen relationship that is purely parasitic, and no longer symbiotic. The host must live within its means, whereas the parasite is in a position to simply demand more, and — should a shortfall continue to ensue from any newer arrangement — blame the host. In the end, nobody prospers except for opportunistic politicians with careers built on the creation of new jealousies, and the further aggravation of existing ones.

“….careers built on the creation of new jealousies, and the further aggravation of existing ones.”?
Is THAT what Hill was “catching up” with Barry on the other day?
- CaptDMO | 12/08/2015 @ 06:34
I’m old enough to remember when the successful progressive politician tried, at least, to pretend this was not the case. That he just wanted “to make it more fair.” Today they’ve stopped trying.
- mkfreeberg | 12/08/2015 @ 06:37
You know, it’s funny — we actually figured out the solution to this problem almost 200 years ago.

In 1834, the good liberals of Great Britain enacted the Poor Law. It was supposed to help hopeless charity cases — elderly widows, the disabled, orphan children, etc. — but in practice it applied to any hard-luck situation. To keep it from being abused, though, the framers of the Poor Law tied it to “the principle of least eligibility,” a fancy term for making charity just slightly less attractive than the worst-paying job. You wouldn’t starve to death under the Poor Law, but nobody in his right mind would take it voluntarily. In one shot, you achieved the liberal goal of maximum goodfeelz with the conservative goal of not destroying the economy. And best of all, there was even a disenfranchisement provision — you couldn’t vote while receiving aid, so no “community organizer” could organize all the paupers to vote for gold-plated workhouses.

PS I gotta say, the more I see of this world, the more I think that early Victorian Britain was the absolute apex of human civilization.

PPS the principle of least eligibility is where we get that old cliche “eligible bachelor” — he had juuuust enough to support her in the style to which she’d grown accustomed.
- Severian | 12/08/2015 @ 07:04
[…] Freeberg adds some additional insight: […]
- DYSPEPSIA GENERATION » Blog Archive » The Nonexistent Case for Progressive Taxation | 12/08/2015 @ 08:27

Leave a Reply

You must be logged in to post a comment.

Recent

Items of Interest

Monthly Archives

What They Say

Links

The Brain-Damaged Case for Progressive TaxationTuesday, December 8th, 2015

The Brain-Damaged Case for Progressive Taxation
Tuesday, December 8th, 2015