Taxing the 1% I: Fairness
The top 1% in the United States currently pay about 1/3 of their income in taxes. As might be expected, people on the left have proposed increasing this tax rate. Laying aside ideological hyperbole, the serious proposals aim at setting the tax rate for the upper level at 40% and there has been some serious discussion of setting it as high as 45%.
While the current Democratic candidates for the 2016 Presidential race are willing to say they will raise taxes on the rich, the Republicans are consistently opposed to tax increases—most especially on the wealthy. Both parties are engaged in sensible politics in that they are saying what they think their base wants to hear. While the political value of each stance on taxing the rich is a matter worth considering, I will instead focus on an argument against increasing the taxes on the rich.
One reasonable approach to arguing against (or for) any tax increase is an appeal to fairness. This sort of reasoning rests on the assumption that fairness matter morally. If this assumption holds, then if something can be shown to be unfair, then that is moral strike against it. In contrast, showing that something is fair is to win a moral point in its favor.
The wealthy and their devoted defenders could argue that a tax increase to 40% (or higher) would be unfair. For example, Dr. Ben Carson has proposed what has become known as his “10% Flat Tax Plan”, although he did consider a rate of 10-15% (and possibly higher at the start of his plan). He considers this the fairest approach to taxation, in that he claims there is nothing fairer. While not everyone finds such a plan fair (or even workable), it is clear that it can be argued that any proposed tax increase for the rich would be unfair.
Since arguments are free, even the poor can avail themselves of the appeal to fairness. Back before Occupy Wall Street faded from the attention of the media and most Americans, there were many appeals to fairness aimed at the perceived unfairness of the economic system of the United States. This movement did have some lasting impact in that it introduced the 1% and the 99% into American political discourse.
Interestingly enough, this talk of the 99% and the “#iamthe99” inspired Erik Erickson to try to create a counter meme of “#iamthe53.” This is in reference to his claim that 53% of Americans pay federal income tax. He contended that people should stop complaining, stop blaming Wall Street and pay their taxes. In response to the criticisms of the Occupiers, Erickson made an appeal to the old saying that life is not fair:
Well, these people apparently forgot that life is not fair and are demanding the government intervene to legislate that life suddenly become fair. They are claiming to be the “99%” against the evil 1% of rich people who work on Wall Street. They are posting pictures to a website holding up their sob stories. Some are terribly tragic, but most? Boo-freakin’-hoo. Life is not, never has been, and never will be fair.
This can be seen as something of an evil twin to the appeal to fairness. Under the rhetoric, this sort of argument rests (obviously) on the assumption that life is not fair. When a complaint about unfairness is raised, it is countered by the assertion that this unfairness is acceptable (or impossible to change) on the grounds that life is not fair. This could be referred to as the “principle of unfairness.” This is the principle that unfairness is an unalterable part of life and hence nothing can (or should) be done about it.
While Erickson did not originate the appeal to unfairness, he seems to have helped promote it and it is routinely used as a rebuttal when people are critical of economic inequality. As such, it is typically used by those on the right against those on the left. However, principles and arguments are like sword: they can be wielded by any hand against any target—even their creators.
If the rich and the devoted defenders complain that an increase in taxes is unfair, then the defenders of the tax increase have every right to wield the appeal to unfairness. One could easily imagine a leftist version of Erickson writing in response to such boohooing: “well, these people apparently forgot that life is not fair and are demanding the government not raise their taxes so that life suddenly become fair.”
If the appeal to unfairness is a viable defense of the economic inequality that seems so beloved by its ardent defenders, then it would also seem to be a viable defense for any unfairness. This would thus presumably include the forced redistribution of wealth. That would certainly be unfair, but if unfairness is simply the way life is, then there would be no moral grounds of criticizing it.
If the appeal to unfairness does not work in the case of justifying raising the taxes on the rich (or the unfair forced redistribution of wealth), then there are two main reasons this would be the case. The first possibility is that relevant difference could be claimed between the 1% and the 99% that justifies the unfair treatment of the 99% while requiring that the 1% be treated fairly in this matter. No doubt some able defender of the 1% can present such an argument. The second possibility is that fairness is actually morally relevant for everyone. As such, if the 1% can appeal to fairness, then the 99% can also avail themselves of the same appeal. Put another way, if the rich want to talk about the fairness of their taxes, they are obligated to consider the fairness of the economic inequality that exists. Likewise, fairness also requires that the tax rate imposed on the rich not be unfair.