Vox Populi

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Marc Jampole: The Moral Aspect of Tax Policy

How much do the “deserving” rich really deserve? Not as much as they think.

As Donald Trump and Republicans roll out their proposal to provide wealthy people with a massive tax cut while giving everyone else a small break or nothing, they are restating that old lie that reducing taxes will make the economy grow so much that tax revenues will be more than before. It wasn’t true when Arthur Laffer proposed it in the late 1970’s and it’s not true now, as the recent experiences in several states show. Kansas, South Carolina, Tennessee and Indiana (no matter how much Republicans and the New York Times try to scrub the numbers) all slashed taxes drastically and ended up with weaker economies and budget shortfalls.

If history is any guide, the Trump-GOP tax cut would be part of a two-part swindle. In the first part, everyone gets their taxes cut—the rich massively so—and in the second part, the poor and middle class get their taxes increased or the benefits they receive from the government cut. The GOP successfully engineered the two-part swindle under a mediocre Hollywood actor. Now they’re trying it again with a reality television star in charge.

All the rightwing arguments in favor of tax cuts for the wealthy are false. They don’t create new jobs. They don’t create much new spending. And, they can lead to a recession if the wealthy put too much of their new largess into bubble-prone assets. As they always do.

But the right wing also has a moral argument in favor of tax cuts and low taxes for the wealthy, which goes something like this: They earned it and they deserve it. The rich certainly don’t deserve to give up their hard-earned money to the undeserving, the lazy and those who didn’t work as hard as they did to get where they are. After all, America is the land of opportunity in which anyone and everyone can climb to the top and make the big bucks. Behind this argument stands a basic tenet of the Protestant ethic: that the good do well and the wicked do poorly. The subtle but subversive power of this argument is that it puts everyone who pays taxes on the side of the wealthy, since all of us deserve to keep as much of our money as possible. We put in the work and we don’t deserve to have our largess stolen by government!!

In the recorded history of self-serving crap, no crap has ever been more self-serving than the idea that the wealthy deserve their wealth because of their talent, education, hard work, drive and general goodness. First of all, much of the success of any given person depends on the economic, physical and social infrastructure that society provides, usually through government spending. The roads, bridges, tunnels, mass transit and airports that a high-tech genius, her employees, vendors and customers use, the public schools that educated her workers, the consistent operation of society which the maintenance of laws and standards of operation, weights, measures and safety ensure, the safety maintained by the police and armed forces, the subsidies to our health care and retirement systems that allow her to pay her employees less. All this and more is what President Obama meant when he inarticulately said, “You didn’t build this.” He really should have said, “Whatever you built would have been impossible without the efforts of the rest of society.”

More significantly, much more of the success of virtually all of us has always resulted from the luck of the draw than from the virtues of the individual. As philosopher Daniel Robinson detailed in Praise and Blame: Moral Realism and Its Applications, luck determines most of our fates, the good and the bad, the successful and the failures.

The factors that affect our fate include:

  • Having a wealthy or prominent family.
  • Marrying into a wealthy or prominent family.
  • Growing up in a family that has not been devastated by poverty, food scarcity, substance abuse, criminality or mental illness.
  • Being born with a special skill or more intelligence than the average person. No matter how hard a 5’9’’ male athlete of average speed and strength works on his game, he’s not going to be able to keep up with the 7-foot Shaquille O’Neal.  No matter how much a person of average intelligence studies, he or she won’t be able to keep up with someone with a photographic memory. Shaq did nothing virtuous to attain his size. The genius was likewise born with the photographic memory.
  • Being in the right place at the right time, which can mean being the assistant of someone who makes a great discovery or taking a job right out of high school at Apple instead of the post office in the early 1980’s.
  • Being born at a time in history when your skill is appreciated or your weakness not a problem. This last point can be illustrated by imagining Willie Mays if he were born into slavery in the first part of the 19th century or Stephen Hawking before the development of motorized and digitized aids for people with physical disabilities.
  • Meeting a mentor or someone with connections who will take a special interest in you.
  • Not having an accident or dying young in a war or epidemic.

These factors determine not only whether people will achieve wide recognition for their life work, but also the fate of the average person. For example, researchers recently tested Indian sugar cane workers before the harvest when they were broke and after the harvest when they had lots of money. The difference in scores amounted to 9 or 10 points on an I.Q. test, which measures certain intellectual capabilities correlated with success in school and in professional employment.  On an I.Q. test, 9 or 10 points means a lot: for example, about 28% of the population scores between 106-115, while only 9% of the population scores between 116-125. Thus, the physician with an I.Q. of 120 from a wealthy family could work 60 hours a week and earns $400,000, while a lab technician with an I.Q. of 110 whose poor family could not afford SAT prep courses and summer enrichment could work the same 60 hours a week and make $65,000. Who is more deserving of the additional money and respect? Who would get to go to school for more years, score higher on tests, achieve more and make more money if the tables were turned?

One thing that the latest studies on wealth and income inequality have shown is that the United States has very little socio-economic mobility, and less today than ever before. The so-called land where anyone can make it big sees fewer people making it big who weren’t already big than most other industrialized nations.

The concept of the deserving rich and the undeserving poor is therefore built on a fraudulent understanding of the way individuals and society interact. Neither rich nor poor deserve their fates. In a land of abundance, isn’t it up to society to balance the scales and assure that all people have at least a minimum standard of living as defined by healthcare, education, retirement and housing? From the moral point of view, instead of lowering taxes on the wealthy, we should be raising them to help level the playing field. Raising taxes on the wealthy not only makes good economic sense, but also gibes with our basic morality. When the rich advocate for lower taxes to be paid for by cutting social programs and infrastructure investment, they are behaving out of pure anti-social selfishness.


Copyright 2017 Marc Jampole

4 comments on “Marc Jampole: The Moral Aspect of Tax Policy

  1. Robert Boucher
    October 6, 2017

    Mark makes a lots of points about social mobility. But this has nothing whatever to do with taxes. Remember all taxation is a TAKING by the force at the point of a gun by the government of a the property of the citizen. I maintain that the only fair tax is a flat tax with no deductions and no exemptions on all sources of income. Moses cautioned us ” covet not thy neighbors goods” sound advice both then and now.
    Moses and the Burning Bush agreed on a tax rate of ten percent. I say that if ten percent was good enough for Moses it is good enough for me.


  2. daniel r. cobb
    October 4, 2017

    In a 2013 study conducted by the Organization for Economic Cooperation and Development, taxes per capita in the United States totaled $13,482. This includes all taxes. The US ranked 16th out of 29 top industrialized countries for which data were available for 2013. In 1952, corporate taxes accounted for 33% of all US tax revenue, while today it accounts for only around 9%. And in 1952, corporate taxes accounted for 5.9 percent of GDP, while today that figure has fallen to only 1.6 percent today. Conservative sources (liars) claim that US corporate taxes are the highest in the world, but that is the statutory rate and they don’t take into account all of the tax deductions, write-offs, and credits, which cut the effect average corporate rate on taxable income to only 18.6%. The best, effective measure is corporate taxes as a percentage of GDP. For the US, this rate is only 2.2%, while for the 30 top industrialized nations, this rate averages 2.8%. American corporations in fact, greatly under taxed. But wealthy Republicans see the American treasury as an unguarded piggy bank and they raid it as often as they can, doling out massive cuts for themselves and their corporate masters while slashing funds for roads, bridges, transportation, education, healthcare, the needy, at risk youth, FEMA, EPA, climate research, renewable energy, Superfund site reclamation, the IRS, the VA, etc., etc. Every program designed to build and maintain American society and American infrastructure, protect workers, protect veterans, protect families, protect jobs, protect the environment, protect food and pharmaceutical safety, etc., is at risk under a Republican government. They are only thieves.

    Liked by 1 person

    • Vox Populi
      October 5, 2017

      Thanks for this overview, Dan.


    • Robert Boucher
      October 9, 2017

      the problem is not the tax rates but the loopholes. over 100 large corporations pay ZERO income tax

      Liked by 1 person

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