Found a link to this perverse piece by a civil servant on “fair taxation” via a comment on Sauvik’s blog-
Classical liberals argue that governments have no right over people’s incomes and that direct taxes penalize effort, and thereby reduce economic efficiency by distorting incentives. Yet, recent research from labour economics provides ample evidence to the contrary. It has been found that the disincentive effect of higher taxes on those at higher income levels is marginal enough to be irrelevant. Further, the major share of our tax revenues goes into financing capital-intensive infrastructure investments in highways, ports, airports and so on, all of which benefit the richest disproportionately more than the poor.
On a more fundamental note, it’s now acknowledged that initial conditions—family, society and other contextual factors—which are often more luck than skill or hard work, are critical in influencing outcomes. In Outliers, Malcom Gladwell has illustrated how talent is more persistence and tenacity rather than any inherent skill, and that skill and hard work entail dollops of luck. Further, minuscule differences in performance, especially in the knowledge-based professions, translate into enormous differences in incomes. In other words, all variables being equal, it is luck that decides who stands at the foot and who at the peak of the mountain.
Considering that luck holds the trump card, economists such as Hal Varian at Google and Robert H. Frank at Cornell University have favoured a model where those at the top end of the income table pay a larger marginal tax rate to discount for the extra share of luck they have enjoyed. In other words, the luckier ones subsidize those endowed with less luck.
One by one.
* “Yet, recent research from labour economics…”
So he has refuted the “government has no right over people’s incomes” argument? Absolutely not. He is supposedly refuting the economic inefficiency argument. Philosophy, it seems, is not his forte.
* “Further, the major share of our tax revenues goes into…benefit the richest disproportionately more than the poor”
The rich are benefiting “disproportionately.” I pay for all 10 cups of tea and have the temerity to demand 2 cups for myself thereby benefiting “disproportionately.” Evil bourgeois/ capitalist pig!
* “On a more fundamental note, it’s now acknowledged that initial conditions… more luck than skill or hard work, are critical in influencing outcomes.”
I don’t acknowledge it. Some jerk-offs do. So what? If someone is lucky, he should be forced to do penance for being lucky? Be charitable because of the bounty he has received from some god? This argument is not new. It began with Rawls, and now Gladwell has provided fresh ammunition to benevolent thugs. I wrote about this line of argument here.
* “In other words, the luckier ones subsidize those endowed with less luck.”
As I write in the post I linked to, the egalitarians are huffing and puffing to equalize inequalities created by God – they are playing God. They are hell bent on equalizing outcomes, something I commented upon here. I have to take recourse to Rand here because I don’t know of any other philosopher who tackled this subject head on, a telling comment on my knowledge, or the profession of philosophy. She declared that egalitarianism is a way to create metaphysical equality by subverting the law of causality. She writes-
Egalitarianism means the belief in the equality of all men. If the word “equality” is to be taken in any serious or rational sense, the crusade for this belief is dated by about a century or more: the United States of America has made it an anachronism—by establishing a system based on the principle of individual rights. “Equality,” in a human context, is a political term: it means equality before the law, the equality of fundamental, inalienable rights which every man possesses by virtue of his birth as a human being, and which may not be infringed or abrogated by man-made institutions, such as titles of nobility or the division of men into castes established by law, with special privileges granted to some and denied to others. The rise of capitalism swept away all castes, including the institutions of aristocracy and of slavery or serfdom.
But this is not the meaning that the altruists ascribe to the word “equality.”
They turn the word into an anti-concept: they use it to mean, not political, but metaphysical equality—the equality of personal attributes and virtues, regardless of natural endowment or individual choice, performance and character. It is not man-made institutions, but nature, i.e., reality, that they propose to fight—by means of man-made institutions.
Since nature does not endow all men with equal beauty or equal intelligence, and the faculty of volition leads men to make different choices, the egalitarians propose to abolish the “unfairness” of nature and of volition, and to establish universal equality in fact—in defiance of facts. Since the Law of Identity is impervious to human manipulation, it is the Law of Causality that they struggle to abrogate. Since personal attributes or virtues cannot be “redistributed,” they seek to deprive men of their consequences—of the rewards, the benefits, the achievements created by personal attributes and virtues. It is not equality before the law that they seek, but inequality: the establishment of an inverted social pyramid, with a new aristocracy on top—the aristocracy of non-value.
The new “theory of justice” [of John Rawls] demands that men counteract the “injustice” of nature by instituting the most obscenely unthinkable injustice among men: deprive “those favored by nature” (i.e., the talented, the intelligent, the creative) of the right to the rewards they produce (i.e., the right to life)—and grant to the incompetent, the stupid, the slothful a right to the effortless enjoyment of the rewards they could not produce, could not imagine, and would not know what to do with.
Observe that . . . the egalitarians’ view of man is literally the view of a children’s fairy tale—the notion that man, before birth, is some sort of indeterminate thing, an entity without identity, something like a shapeless chunk of human clay, and that fairy godmothers proceed to grant or deny him various attributes (“favors”): intelligence, talent, beauty, rich parents, etc. These attributes are handed out “arbitrarily” (this word is preposterously inapplicable to the processes of nature), it is a “lottery” among pre-embryonic non-entities, and—the supposedly adult mentalities conclude—since a winner could not possibly have “deserved” his “good fortune,” a man does not deserve or earn anything after birth, as a human being, because he acts by means of “undeserved,” “unmerited,” “unearned” attributes. Implication: to earn something means to choose and earn your personal attributes before you exist.
All those people who argue on the basis of “luck” should be willing to put their money where their mouth is – Americans and Indians are “luckier” than people in most African and Asian countries. So the first thing to do is to donate, say, 50% of all tax collections to such unlucky nations. If they are not willing to be so generous, they should keep their disingenuous arguments to themselves. I guess if they knew who Bismarck was and what he said and did, they would cling to this line of his to evade such uncomfortable questions – “there is no altruism among nations.”
Nearly forty years before Gladwell wrote his irritating book and this civil servant using it to buttress his demand for “fair taxation” Rand already wrote about the ideas that motivates such people. And it all started with Rawls. The most irritating part is pointed out by Hoppe in his introduction to Rothbard’s “The Ethics of Liberty” (I dozed off after section 6 of the book and haven’t yet found the patience to continue; Rawls’ A Theory of Justice I mean.)-
In fact, Rawls, to whom the philosophy profession has in the meantime accorded the rank of the premier ethicist of our age, was the prime example of someone completely uninterested in what a human ethic must accomplish: that is, to answer the question of what I am permitted to do right now and here, given that I cannot not act as long as I am alive and awake and the means or goods which I must employ in order to do so are always scarce, such that there may be interpersonal conflicts regarding their use. Instead of answering this question, Rawls addressed an altogether different one: what rules would be agreed upon as “just” or “fair” by “parties situated behind a veil of ignorance”? Obviously, the answer to this question depends crucially on the description of the “original position” of “parties behind a veil of ignorance.” How, then, was this situation defined? According to Rawls, behind the veil of ignorance “no one knows his place in society, his class position or social status; nor does he know his fortune in the distribution of natural assets and abilities, his intelligence and strength, and the like. . . . It is taken for granted, however, that they know the general facts about human society. They understand political affairs and the principles of economic theory; they know the basis of social organization and the laws of human psychology.”
As Rawls admitted with captivating frankness, he had simply “defined the original position so that we get the desired results.” Rawls’s imaginary parties had no resemblance whatsoever with human beings but were epistemological somnambulists; accordingly, his socialist-egalitarian theory of justice does not qualify as a human ethic, but something else entirely.
This man rigged his philosophical experiment!
On the subject of “equality of outcome” which is what our civil servant is after, taxation is one of the best ways to accomplish it. Grab more money from those who earn more – the bastards don’t deserve it, they are “lucky.” How … “fair.” Its here that Rand made a major mistake. She wasn’t in favor of eliminating taxation as a first step towards a free society. She wrote-
In a fully free society, taxation—or, to be exact, payment for governmental services—would be voluntary. Since the proper services of a government—the police, the armed forces, the law courts—are demonstrably needed by individual citizens and affect their interests directly, the citizens would (and should) be willing to pay for such services, as they pay for insurance.
The question of how to implement the principle of voluntary government financing—how to determine the best means of applying it in practice—is a very complex one and belongs to the field of the philosophy of law. The task of political philosophy is only to establish the nature of the principle and to demonstrate that it is practicable. The choice of a specific method of implementation is more than premature today—since the principle will be practicable only in a fully free society, a society whose government has been constitutionally reduced to its proper, basic functions.
Any system of taxation that is not voluntary – if those who refuse to pay are thrown in jail, it is not a voluntary system regardless of what the IRS or the US courts say – is coercive. And eliminating coercive taxation and instituting a voluntary means of taxation is the “first” step on the way to a free society. As long as governments have the power to demand a tax, they have the power to punish people or grab their property. And that power has to be taken away – first. As Hoppe points out-
“Without justice,” Rothbard concluded as St. Augustine had before him, “the state was nothing but a band of robbers.”
No wonder any debate on taxation is always carried out in terms of “fairness” and “justice.” Even the thieves know that they need to justify their behavior to avoid being lynched.