A Philosopher's Blog

Taxing the 1% II: Coercion

Posted in Business, Ethics, Law, Philosophy, Politics by Michael LaBossiere on November 11, 2015

As noted in my previous essay on this topic, those with the highest income in the United States currently pay about 1/3 of their income in taxes. There have been serious proposals on the left to increase this rate to 40% or even as high as 45%. Most conservatives are opposed to any increase to the taxes of the wealthy while many on the left favor such increases. As in the previous essay on this subject, I will focus on arguments against increasing the tax rate.

One way to argue against increasing taxes (or having any taxes at all) is to contend that to increase the taxes of the wealthy against their wishes would be an act of coercion. There are more hyperbolic ways to make this sort of argument, such as asserting that taxes are theft and robbery by the state. However, I will use the somewhat more neutral term of “coercion.” While “coercion” certainly has a negative connotation, the connotations of “theft” and “robbery” are rather more negative.

If coercion is morally wrong, then coercing the wealthy into paying more taxes would be wrong. As such, a key issue here is whether coercion is wrong or not. On the face of it, the morality of an act of coercion would seem to depend on a variety of factors, such as the goal of the coercion, the nature of the coercive act and the parties involved. A rather important factor is whether the coerced consented to the system of coercion. For example, it can be argued that criminals consented to the use of coercive force against them by being citizens of the state—they (in general) cannot claim they are being wronged when they are arrested and punished.

It could be claimed that by remaining citizens of the United States and participating in a democratic political system, the richest do give their consent to the decisions made by the legitimate authorities of the state. So, if Congress creates laws that change the tax rates, then the rich are obligated to go along. They might not like the specific decision that was made, but that is how a democratic system works. The state is to use its coercive power to ensure that the laws are followed—be they laws against murder, laws against infringing the patents of pharmaceutical companies or laws increasing the tax rate.

A reasonable response to this is that although the citizens of the state have agreed to be subject to the coercive power of the state, there are still moral limits on the power. Returning to the example of the police, there are moral limits on what sort of coercion they should use—even when the law and common practice might allow them to use such methods. Returning to the matter of laws, there are clearly unjust laws. As such, agreeing to be part of a coercive system does not entail that all the coercive actions of that system or its laws are morally acceptable. Given this, it could be claimed that the state coercing the rich into paying more taxes might be wrong.

It could be countered that if the taxes on the rich are increased, this would be after the state and the rich have engaged in negotiations regarding the taxes. The rich often have organizations, such as corporations, that enable them to present a unified front to the state. One might even say that these are unions of the wealthy. The rich also have lobbyists that can directly negotiate with the people in the government and, of course, the rich have the usual ability of any citizen to negotiate with the government.

If the rich fare poorly in their negotiations, perhaps because those making the decisions do not place enough value on what the rich have to offer in the negotiations, then the rich must accept this result. After all, that is how the free market of democratic politics works. To restrict the freedom of the state in its negotiations with rules and regulations regarding how much it can tax the rich would be an assault on freedom and a clear violation of the rights of the state. If the rich do not like the results, they should have brought more to the table or been better at negotiating. They can also find another country—and some do just that. Or create or take over their own state.

It could be objected that the negotiations between the state and the rich is unfair. While the rich can have considerable power, the state has far greater power. After all, the United States has trillions of dollars, police, and the military. This imbalance of power makes it impossible for the rich to fairly negotiate with the state—unless there are rules and regulations governing how the rich can be treated by the greater power of the state. There could be, for example, rules about how much the state should be able to tax the rich and these rules should be based on a rational analysis of the facts. This would allow a fair maximum tax to be set that would allow the rich to be treated justly.

The relation between a state intent on maximizing tax income and the rich can be seen as analogous to the relation between employees and businesses intent on maximizing profits. If it is acceptable for the wealthy to organize corporations to negotiate with the more powerful state, then it would also be acceptable for employees to organize unions to negotiate with the more powerful corporations. While the merits of individual corporations and unions can be debated endlessly, the basic principle of organizing to negotiate with others is essentially the same for both and if one is acceptable, so is the other.

Continuing the analogy, if it is accepted that the state’s freedom to impose taxes should be regulated, limited and restricted by law, then it would seem that imposing limits, regulations and restrictions on the economic freedom of employers in regards to how they treat employees. After all, employees are almost always in the weaker position and thus usually negotiate at a marked disadvantage. While workers, like the rich, could try to find another job, create their own business or go to another land, the options of most workers are rather limited.

To use a specific example, if it is morally right to set a rational limit to the maximum tax for the rich, it is also morally right to set a rational limit on the minimum wage that an employee can be paid. Naturally, there can be a wide range of complexities in regards to both the taxes and the wages, but the basic principle is the same in both cases: the more powerful should be limited in their economic impositions on the less powerful. There is also the shared principle of how much a person has a right to, be it the money she keeps or the money she is paid for her work.

Like any argument by analogy, the argument I have made can be challenged by showing the relevant similarities between the analogues are outweighed by the relevant dissimilarities. There are various ways this could be done.

One obvious difference is that when the state imposes taxes on the rich, the state is using political coercion. In the case of the employer imposing on the employee, the coercion is economic (although some employers do have the ability to get the state to use its coercive powers in their favor). It could be argued that this difference is strong enough to break the analogy and show that although the state should be limited in its imposition on the rich, employers should have considerable freedom to employ their economic coercion against employees. The challenge is showing how political coercion is morally different from economic coercion in a way that breaks the analogy.

Another obvious difference is that the state is imposing taxes on the rich while the employer is not taxing her employees. She is merely setting their wages, benefits, vacation time, work conditions and so on.  So, while the state can reduce the money of the rich by taxing them, it could be argued that this is relevantly different from an employer reducing the money of employees by paying low wages. As such, it could be argued that this difference is sufficient to break the analogy.

As a final point, it could be argued that the rich differ from employees in ways that break the analogy. For example, it could be argued that since the rich are of a better economic class than employees, they are entitled to better treatment, even if they happen to be unable to negotiate for that better treatment. The challenge is, of course, to show that the rich being rich entitles them to a better class of treatment.

 

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  1. TJB said, on November 11, 2015 at 6:23 pm

    Mike, the relationship between employer and employee is not a coercive one but a mutually beneficial one entered into freely by both sides. It does not follow that just because a person needs to earn a living that he is somehow being coerced.

    If you think the market value of unskilled labor is too low, then you should support policies that will restrict the flow of unskilled labor into the U.S. This will limit the supply of workers and drive up wages.

    • Michael LaBossiere said, on November 13, 2015 at 1:13 pm

      The same could be said of the relationship between the state and the citizen. Sometimes it is true, sometimes not. But, the employer generally has a considerable advantage over the employed in terms of power.

      The fact that people do have to earn a living does place a clear coercive element. This is in some ways analogous to the “coercion” imposed by the natural world: a person is free to not eat or breath, but death is the result. Likewise, a person is free to not seek income, but the result is almost always bad. These might be regarded as necessary aspects of the physical and social worlds, but they are still coercive.

  2. TJB said, on November 11, 2015 at 6:26 pm

    Democrats at work fundamentally transforming America.

    • TJB said, on November 11, 2015 at 11:31 pm

      That one was for Magus. This one is for Mike:

      Rubio really needs to take a seminar on Aristotle. I think he’d love it, and perhaps then he would stop raining scorn on men who embodied many of the ideals that conservatives (including Rubio himself!) hold most dear. And I’m not just saying that because I love Aristotle enough to have named a child for him. (It’s only the middle name. He doesn’t even have to tell the kids at school.)

      Greek philosophy helps us understand what it means to be human. It sheds light on who we are as a society, and on how we got this way. When I introduce the Greeks to my introductory ethics course, I explain to my students: “You may not know anything about these people, but they said things thousands of years ago that changed the way you, here in modern America, see the world. These are giants of human civilization.”

      Not everyone needs to read the Greek philosophers, but some people should. These are absolutely critical texts for anyone who would understand the human condition more fully. Bashing the Greeks isn’t quite as bad as dismissing the Bible, but it’s moving into that territory. Historically, most people who loved the one have also valued the other.

      By contrast, the modern university is filled with small-minded tinkerers who waste countless taxpayer dollars running studies on useless or obvious things. It is filled with “grievance study” departments, in which whole groups of people devote years to revisionist history and whining about “privilege.” It is filled with overpaid administrators who draw six-figure salaries so they can spend their days trying to game the U.S. News and World Report rankings.

      Against all of this, you’re going to reserve your contempt for the intellectual pillars of Western Civilization? Come on, Rubio. That just makes you look like a young Keanu Reeves, which is not what the Republican Party needs.

      By all means, let’s rail against the wasteful impracticalities of higher ed! It’s got plenty of pork to spare. In the process, however, let’s not make ourselves look like illiterate rubes who care for nothing but widget-making. Philosophy has value, and so do welders. A healthy society must find ways to value both.

      http://thefederalist.com/2015/11/11/what-marco-rubio-actually-got-wrong-about-philosophers/#.VkOh4FoeMe4.twitter

      • Anonymous said, on November 12, 2015 at 10:21 pm

        Mike Rowe said everything I was going to say last night but lacked the time or patience with this absurdity:

        Off The Wall

        Liz Lane writes…
        “Rubio gave a nice shout out to welders on the debate last night (that may or may not have made Socrates roll over in his grave). We all know you support welders and their hard work, but should we go so far as to say, “We need more welders and less philosophers?”

        Hi Liz. Great question. Across the interwebs today, people are rushing to point out that the mean wage of a welder is actually lower than the mean wage of a philosopher – $40,000 vs. $71,000.

        There’s an article on Vox that “debunks” Rubio’s claim. http://www.vox.com/2015/11/10/9709948/marco-rubio-philosophy-welder.

        Here’s another from CBS that “fact-checks” his statement. http://www.cbsnews.com/news/republican-debate-fact-check-was-marco-rubio-right-about-welders-versus-philosophers/

        Based on these “revelations,” Rubio’s assertion that “welders make more than philosophers” is being dismissed out of hand.

        Interestingly, no one has pointed out that last year, philosophers earned a combined total 1.6 billion dollars, whereas welders earned a combined total of $34 billion. Nor have I heard anyone explore the differences between mean wage vs. median wage, and the vastly different number such a calculation would yield, given the disparate size of each group, and the impact of high-earning outliers, particularly among the philosopher cohort. I suppose I could do all that here, but really, what’s the point? Numbers can always be twisted and turned to make whatever case the speaker wishes to drive home.

        Personally, I’m convinced that more and greater opportunity exits in welding than philosophy. But I would not encourage one at the expense of another. That’s precisely how we’ve wound up with a workforce that’s both over-educated and under-trained. Never mind obscenely indebted. Also – it’s dangerous to conclude that one profession is superior to another simply because it pays more. Those kind of generalizations are fun but meaningless.

        Having said that, I’m glad Rubio said what he said, because I know for a fact that employers are clamoring for welders. And I also know with certainty that a talented welder who is willing to go where the work is has an excellent chance to earn a six-figure salary. I have no idea if the same is true for a philosophy major, but I can assure you of this: an excellent welding program will cost a lot less than a Philosophy Degree from an excellent university. I can also tell you that the classified section of today’s paper is conspicuously void of openings for “Experienced Philosophers.” “Experienced Welders” on the other hand, appear to be in high demand everywhere.

        Anyway Liz, to answer your question, I don’t think we need fewer philosophers – I think we need more philosophers who can weld. Or better yet, more welders who can philosophize. Welding and Philosophy are not opposites – they’re two sides of the same coin. Likewise blue and white collar. Labor and Capitol. Employer and Employee.

        There’s nothing magical about learning a skill or earning a degree. What matters most is the same stuff that’s always mattered. A willingness to work hard, to master a skill that’s in demand, and to go where the demand is. Work is not about the color of collars, or the relative size of the paycheck. It’s about pursuing opportunities where they exist, and creating them where they don’t.

        Mike

        • wtp said, on November 12, 2015 at 10:23 pm

          Interestingly or boringly enough, me. Obviously.

        • Michael LaBossiere said, on November 13, 2015 at 1:22 pm

          That is an excellent example of grouping ambiguity: Rubio is right about welders as a group, wrong about individual to individual salary.

          Now, if he said “we need more welders and fewer politicians”, I think we could all get behind that.

          • wtp said, on November 15, 2015 at 9:35 am

            Rubio said nothing about individual to individual. In the context of the stigmatizing of vocational education he stated “Welders make more money than philosophers”. This is absolutely correct. Now if you want to cherry pick or use averages that do not exclude outliers, which is not how statisticians properly work in this context, if you go looking for ambiguity, then there you have the argument that cnn, nbc, and all the leftists in academia started screaming about. But what Rubio said was correct in the context in which he was speaking. Were the shoe on the other foot you would be ranting about such. Sophistry is all you know.

      • WTP said, on November 13, 2015 at 12:52 am

        And on a somewhat similar note:

        The society which scorns excellence in plumbing as a humble activity and tolerates shoddiness in philosophy because it is an exalted activity will have neither good plumbing nor good philosophy: neither its pipes nor its theories will hold water.

        — John Gardner

      • Michael LaBossiere said, on November 13, 2015 at 1:18 pm

        That is something I could have written, albeit with less skill and eloquence.

        As the author notes, critical philosophical inquiry is the opposite of the sort of ills plaguing modern academics. Rubio should be saying “we need more full time faculty and fewer administrators” and “we need more rigorous classes in logic and fewer classes about being magical snowflakes” and “trigger warnings? WTF?”

        • wtp said, on November 15, 2015 at 9:39 am

          Who are you to say what it is Rubio should be saying? You barely speak up on the insanity that is rampant in academia. And please don’t point me again to those three lame posts. This shit is in your domain. You academics have created this atmosphere but you dodge any responsibility for it.. Though to be fair, “we need more rigorous classes in logic and fewer classes about being magical snowflakes” is not an argument you are remotely qualified to make.

    • magus71 said, on November 12, 2015 at 5:22 pm

      Reposted.

  3. nailheadtom said, on November 11, 2015 at 7:44 pm

    What’s the definition of “rich”?

    • TJB said, on November 12, 2015 at 8:24 am

      Easy. They will talk about corporate jets, but then set the line at $150K or so.

    • Michael LaBossiere said, on November 13, 2015 at 1:14 pm

      Good question, since that is a vague term. It is probably better to be more precise with income tiers or actual income ranges in dollars.

  4. TJB said, on November 11, 2015 at 11:47 pm

    Dems have been busy this week.

    • magus71 said, on November 12, 2015 at 8:10 pm

      Just. Wow. Can I move to another country?

      • WTP said, on November 12, 2015 at 8:58 pm

        Just FYI, that was part of an appearance on Steve Colberts show. Of course she is supposed to be a representative of the people of Missouri, not a comedian. Though perhaps that is what she’s proving here.

        • TJB said, on November 12, 2015 at 10:16 pm

          Plausible deniability, but it is not at all clear that she was actually kidding. Eye of the beholder, I guess.

          • wtp said, on November 15, 2015 at 9:40 am

            Well, like I said she is supposed to be a representative of the people of Missouri, not a comedian.

      • Michael LaBossiere said, on November 13, 2015 at 1:19 pm

        You can. But they are all inferior to America.


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