A Philosopher's Blog

Minimum Wage V: Taxes & Wages

Posted in Business, Ethics, Law, Philosophy, Politics by Michael LaBossiere on September 9, 2013
Money cash

Money cash (Photo credit: @Doug88888)

In the United States, there is considerable intersection between the class of people who oppose minimum wage and the class that opposes taxes. In some cases, both of these views can be grounded on a consistently applied principle. For example, those who favor a minimal (or non-existent) state will note that both views are well grounded on the idea that the state should not impose on the citizens. In other cases, though, the reasons presented for these views seem to be at odds. In this short essay I will consider this matter. For simplicity’s sake, I will just stick to discussing earned wages and stay away from such things as inheritances, lottery winnings, and such.

I have conservative friends on Facebook and, when the issues of taxes heats up, I get to see various postings that claim taxes as a form of theft. When the issue is more specifically about taxes being used (or increased) to pay for government services such as welfare, the stock line is that such taxes are wrongfully taking money from the rightful owner and giving it to people who do not deserve the money because they have not earned it. Interestingly, many of the quoted sources are wealthy people who are dismayed at being compelled to pay taxes. This view seems to rest on two important assumptions. The first is that the people who are being taxed have earned (in the moral sense) their money and thus are entitled to keep it. The second is that the people who are imposing the taxes and the people who get the money have not earned it and thus are not entitled to it.

The basic principle at work here does, on the face of it, seems reasonable enough: people are justly entitled to what they have earned and not entitled to what they have not earned. This, in turn, seems to rest on what appears to be a principle that people are entitled to the value they create. After all, there has to be some foundation for the claim that an income is earned and thus justly belongs to a person. The mere fact that a person gets the money is, obviously, not automatic justification that it is earned in the moral sense and that they are thus morally entitled to the income.

In the case of taxes, the folks in question obviously get that principle: they believe it is their right to keep their money and it is not right for other people to get, via taxes, what they have earned. This is, as noted above, apparently based on a principle that people are entitled to the value they create. This is certainly appealing—if I have created the value, then that value is justly owed to me. However, it would also seem to follow that I owe payment for value received. Such, when I receive the goods and services of the state, then I am obligated to pay for their value—otherwise I am stealing from others and violating my own principle. But if my taxes are simply being taken from me and given to others, then it would seem that I am being robbed—the value I have earned is being taken from me, not to pay for the goods and services I use, but to simply give handouts to those who have not earned it. This seems to be clearly wrong.

At this point, it might be wondered what this has to do with wages. Fortunately, the answer is straightforward. If the principle is accepted that a person is entitled to the value s/he has created (and thus earned) and that for someone to take from that person is theft, it would follow that an employee is entitled to the value s/he has created. For the employer to take that value for himself/herself would be the same as if the employer was receiving money taxed from a worker and just given, unearned, to him or her.

It might be countered that the employer earns what s/he receives by the value the employer contributes. The obvious reply is that this claim is true—but this would entail that the employer is not entitled to profits acquired by underpaying employees or overcharging customers. Either approach is like the employer being taxed so that the money can be given to people who have not earned it.

It could be countered that the employer-employee relation is different because of things like market forces, abundance of laborers and so on. As such, an employer can justly pay an employee less than the value the employee creates by his/her labor because of these factors. The obvious counter is that an analogous argument could be made regarding taxation—that the various complex economic factors warrant taking money by taxes to give the money to those who have not earned it.

Thus, those that argue against taxes by contending that they have a right to what they have earned must extend the same principle to the wages of workers. They, too, would be just as entitled to what they have earned. So, if taxation is theft, so is underpaying workers. As such, the minimum wage should be the value of what the worker creates. Anything less that allows the employer to steal from the worker would be theft.

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9 Responses

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  1. WTP said, on September 9, 2013 at 9:50 am

    More of Mike whining about things he doesn’t understand. Putting aside the fact that the employer/employee relationship is entirely voluntary while the government/taxpayer one is far, far more constrained, you will note that he never provides a mechaniism by which it would be determined what “fair” is. Also note, that his description of “robbery” occurring in the voluntary relationship between an employer and an employee is fundamentally, a lie. There is no penalty for not working for any one employer. But fail to pay your taxes and watch what happens.

  2. T. J. Babson said, on September 9, 2013 at 1:02 pm

    I am going to go out on a limb and say that in general it is impossible to quantify the value a particular employee adds.

    Let’s take the example of a philosophy professor. Is it possible to assign a dollar value to his contributions?

    I think not.

    • magus71 said, on September 9, 2013 at 3:45 pm

      A soldier’s?

      • WTP said, on September 9, 2013 at 8:45 pm

        Nor a soldier’s, though for opposite reasons.

    • Michael LaBossiere said, on September 12, 2013 at 1:36 pm

      While a precise and objectively accurate dollar amount might be challenging to calculate, surely we can do a reasonable estimate on this. For example the value added raw materials by the worker.

      As far as the value of a philosophy professor in dollars, one obvious way is to calculate what students pay per credit hour for the classes s/he teaches. Another is to consider the value added to the student based on the number of philosopher classes taken. Of course, much of it would be hard to calculate. In my case, I serve on numerous committees-I’m not sure how to slap a dollar value on that. I also do all sorts of free stuff for students and the community. Some of that could get a dollar tag, like when I teach former students how to take the LSAT or GRE-that could be priced based on what Kaplan or Princeton review charge.

      But, to require that specific lines be drawn would be to fall into the line drawing fallacy. That is, we can do a rough estimate without precise lines between the value additions.

      Interestingly, your point would apply all across the board-so we could not say what a CEO adds and thus cannot claim that s/he earns the pay.

      • T. J. Babson said, on September 12, 2013 at 9:52 pm

        “For example the value added raw materials by the worker.”

        Mike–seriously–this again makes no sense. Let’s take the newest iPhone. It sells for ~700.00 and has about $170 of parts in it. How can you possibly divide up the value added by each worker at Apple and in whatever factory in China assembled the thing? This is an impossible task. Even dead people like Steve Jobs have added value. How can you account for that? How about the people who contributed to the design but then left Apple?

        This is equivalent to thinking about angels and pins. It is unworkable and meaningless.

  3. WTP said, on September 12, 2013 at 2:26 pm

    For example the value added raw materials by the worker
    Does anyone know what this sentence means? The value of the materials added? Did the worker buy those materials? Or is this an intentional bumbling of Marxist LTV?

    one obvious way is to calculate what students pay per credit hour for the classes s/he teaches. Why OBVIOUSLY!!! Never mind the costs of the building he teaches in, the costs of creating and maintaining it, the costs of creating and administering a curriculum beyond that of just the class the professor teaches,

    Some of that could get a dollar tag, like when I teach former students how to take the LSAT or GRE-that could be priced based on what Kaplan or Princeton review charge. Note that Mike automatically assumes that the quality of his teaching is exactly equal to the standards applied by Kaplan or PR.

    And not the least of which, the dollars taken from the taxpayers to pay that tuition in the first place. Both via state directly subsidizing the educational institution and in guaranteeing the loans, of which students are defaulting at increasingly alarming rates, especially at FAMU.

    Interestingly, your point would apply all across the board-so we could not say what a CEO adds and thus cannot claim that s/he earns the pay. Bullshit. The CEO gets paid by those who voluntarily choose to pay him. If he fails to perform (add value) to the corporation, he loses his job. Corporations are far more successful at adding value to our society than dreamers in ivory towers. Compare societies with corporations to those without. Which are more livable? Mike longs to live under a philosopher king but refuses to acknowledge that such societies have existed for centuries and failed to be anywhere near the success of free and open societies. Mao was a philosopher-king. Many of his ideas are what Mike longs for. With teachers like this, is it any wonder we have the mess of a society that at least TJ and Magus and I admit we’re experiencing.

    • WTP said, on September 12, 2013 at 2:29 pm

      some of that got jumbled up in editing (third paragraph belongs with unfinshed first) and in general due to me having to do real work so I can pay the taxes that Mike lives off of,,but you get the idea.

    • WTP said, on September 12, 2013 at 9:01 pm

      Too busy today to do this right. One point I needed to make in regard to one obvious way is to calculate what students pay per credit hour for the classes s/he teaches. Similar to the proverbial stopped watch that is right twice a day, Mike damn near stumbles on the proper value of a philosopher here. Take away the various subsidies and the expenses and such, the value a philosopher adds is the rewarded value of most philosophers of antiquity. It’s precisely what the market is willing to pay, voluntarily. The problem with how Mike put it is he seems to think he’s entitled to all the dollars paid per credit hour. Big difference there.


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