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Taxes and Justice

Jim Henley wants to see if liberal bloggers will identify any "particular level" of taxation as "unjust" rather than merely "unwise or counterproductive." I don't think I would say any particular level is unjust in this sense (though in another since it's quite unjust to implement massively unwise or counterproductive policies so it's sort of six of one half a dozen of the other). I see two potential sources of bona fide injustice in taxation. One would relate to really sudden tax increases. If you bought a home in a town with a property tax rate of X percent and then nine months later the rate was raised to 4X percent, I think you would quite legitimately feel that something unfair was happening. Now if it happened to be the case that the town was already spending money at a rate that implied a 4X percent tax rate, but that was financing expenditures with massive borrowing things might be different. And also if you want to allow for any tax increases, this is obviously going to have to be a fuzzy boundary.

The other thing is that you could use taxes as a means of de facto banning something that shouldn't be banned. Instead of an anti-sodomy law, you could have a $9,000-per-act sodomy tax. If anti-sodomy laws are unjust (and they are), so are exorbitant sodomy taxes.

May 2, 2005 | Permalink

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» Taxes and Justice from All America PAC
Matthew Yglesias responds to a thought-provoking question about what level of taxation rises to the status of "injustice." Yglesias makes the basic point that injustice in taxation doesn't come from taxation reaching any particular level in and of i... [Read More]

Tracked on May 2, 2005 2:14:15 PM

» Just Taxation from RadicallyCentered
Here is my quaint (but unsexy) answer: The level of taxation is unjust if it results in revenues to the State that exceed the amount of money the State needs to perform the operations that the State has undertaken. The inverse of this is that it i... [Read More]

Tracked on May 2, 2005 6:28:28 PM

» Just Taxation from RadicallyCentered
Here is my quaint (but unsexy) answer: The level of taxation is unjust if it results in revenues to the State that exceed the amount of money the State needs to perform the operations that the State has undertaken. The inverse of this is that it i... [Read More]

Tracked on May 2, 2005 6:29:26 PM

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*Christina Hoff Summers has a hilarious account of a College Republicans counter-protest against "V-Day" and the Vagina Monologues (warning: extensive penis humor involved). It appears that the use of the costume is what got these guys in trouble. Yet ... [Read More]

Tracked on May 3, 2005 7:02:29 AM

Comments

There's also the injustice of zero taxes. F'rinstance, every other way of receiving huge sums of money is taxed; inheritance (if GWB has his way) will not be. That's an unjust level of taxation.

Ditto corporations that are paying zero taxes.

Posted by: Doug | May 2, 2005 9:38:46 AM

Taxes on food, although not on junk food or soda.

I think taxing clothing is a troublesome idea.

Tax rates above 40 per cent seem to me unjust and I'm still amazed that we ever had a top tax bracket of 70 per cent at one time.

Taxation without representation, of course.

Taxes to pay for unjust wars. See that guy Thoreau. See that guy Bush.

Most unjust of all, taxes on the middle class and the poor in the form of user fees instituted to make up for revenue shortfalls caused by profligate, unnecessary, and mean-spirited moves to absolve the rich from any taxpaying responsibilities. See every state in the Union right now.

Posted by: Lance Mannion | May 2, 2005 9:42:52 AM

God, greedy white mindless fucks piss me off. Like taxes are the main problem in the world. I hope they are all reincarnated as African-American women born in MS.

Posted by: Al Gore | May 2, 2005 9:45:34 AM

I would not think that no taxes on corporations is a blight of unfairness as long as top executives and shareholders pay their share of taxes. (With "their share" as defined as a level commensurate with what other Americans pay.

Posted by: Eric Slusser | May 2, 2005 9:46:16 AM

Haha, Henley's going to love that the only tax you could think of as "unjust" is a sodomy tax...

Posted by: Mithras | May 2, 2005 9:50:48 AM

Something analagous to Matthew's example happened in Massachusetts in 2002. On May 1 of that year, the long term captial gains tax was raised from a range 0% to 5% based on how long it was held to 5.3%. The Supreme Judicial Court ruled that a tax rate must remain constant over a calendar year. Now the governor and legislatrue have to decide whether to retroactively tax people who had a gain before May 1 or refund people who had gains after.

Posted by: Jeff | May 2, 2005 9:52:30 AM

I agree with Matt, in the extremely rare case where the problem with raising the rate abruptly is not unwise and counterproductive as a whole, that it may be unjust to an individual, but in general individuals need to be responsible for themselves.
Assuming unwise and counterproductive covers all of the instrumental effects of the tax, though, I do not thing it is possible to have a tax rate that is unjustly high if it is not counterproductive and unwise. Those are the qualities that would have the ability to make it unjust.
The sodomy tax would be unjust, but I think that is a different subject than the overall rate.

Posted by: theCoach | May 2, 2005 9:53:05 AM

I would say that if anyone were taxed to the point where they're losing from the existence of the government, then that's unjust. For example, if a businesswoman in the anarcho-capitalist world has to pay for private protection for all her property, and has to deal with being defrauded by other people without recourse besides private retribution, she'll do a lot worse than with the government, but the government demands a price for its services. Well, actually, no, the government demands a price, period, whether you use its services or not. For most people, the amount they get from the government is worth a lot more than they pay for it (otherwise, it really wouldn't be that worthwhile as an institution, would it?). For the really heavily taxed, though, it could be so burdensome that government itself becomes a bad deal, even if they'd have to put up with a Mad Max or Somali-like world of hiring gangsters to guard their homes and have no courts in which to enforce their contracts without the government. At that point, I'd say the tax level is unjust.

Posted by: Julian Elson | May 2, 2005 10:12:06 AM

Unjust? The only time taxation would be "unjust" is if they're leveled against a community who isn't represented - say for example DC.

Just because you don't like paying taxes doesn't mean they're unjust.

Posted by: Brew | May 2, 2005 10:16:12 AM

You are completely missing one side of the equation: What goods/services do you get in return for your taxes?

I really don't mind paying my taxes, but I'm pretty pissed-off about what they do with the money!

Posted by: Mr.X | May 2, 2005 10:19:32 AM

This whole question of what the top tax rate should be is just an attempt by the right to get liberals on record supporting a higher tax rate than currently exists. My answer is always that the correct tax rate is equal to the correct amount of spending. The most conservative counties regularly vote to increase their local sales taxes to pay for specific improvements like schools, roads or sports stadiums. My opinion is that taxes are levied based on what we want government to finance with both numbers, taxes and spending, debated together.

Posted by: ted | May 2, 2005 10:20:08 AM

Addendum: It may sound like I'm making a Hobbesian argument that ANY government action can't be called unjust unless it puts people into a worse position than they would be in anarchy, so Mussolini, Tito, etc, were fine folks. I didn't mean that the "worse than anarchy" level of taxation is exhaustive, as far as unjust tax levels go. (I also find Matt's two examples good, the second more persuasively than the first) I'm just citing it to add it to the list of unjust tax levels, and maybe others can come up with more.

Posted by: Julian Elson | May 2, 2005 10:20:20 AM

I think the justness of a taxation level has to be viewed in light of the justness of the resource being taxed.

For example, if an heir to a fortune simply hires investment managers to invest his assets and lives off the income, then any level of taxation that does not drive the heir into poverty could be seen as just (not wise). On the other hand if someone has worked hard and invested wisely to achieve a high level of income, I think anything higher than a flat tax rate on her is unjust (but may be necessary).

Posted by: Robert Brown | May 2, 2005 10:25:00 AM

I can't believe Matt's post and a lot of the responses.

Would a 100% tax on income be unjust?
Would a 100% tax on asset sales be unjust?
Should personal earnings from all sources be capped by the government?
Should return on investment be fixed at a certain percentage?

Of course there is an unjust level of taxes. The debate is about what the level should be, and what services government should provide.

Some states have had the additional debate of whether taxes should be increased without the majority consent of the taxpayers.

Posted by: pilsener | May 2, 2005 10:39:24 AM

Actually, no. What is unjust is taxation without representation. But you can't just reach up into the sky and claim that God has decided what is an 'unjust level' of taxation.

Posted by: serial catowner | May 2, 2005 10:44:32 AM

pilsener,
>>Would a 100% tax on income be unjust?<<

Not if I got all the goods and services I needed in return. That would be communism, which isn't necessarily unjust.

Posted by: Mr.X | May 2, 2005 10:47:57 AM

Mr X:“Not if I got all the goods and services I needed in return. That would be communism, which isn't necessarily unjust.”

I think one could easily argue that communism is unjust since it prevents those individuals who are willing to be more productive than others from enjoying the fruits of their labor.

Posted by: Robert Brown | May 2, 2005 11:01:10 AM

I don't think any level, viewed in isolation, can be "unjust." But the relationships between taxation levels can be unjust in the case of highly regressive taxes.

So, for instance, a 15% sales tax borders on unjust, because it places the greatest relative burden on the poor--people who, by definition, are benefitting the least from society's output. A 25% sales tax, like the GOP ultra-wackos seem to want instead of an income tax, would be an abomination.

Posted by: bobo brooks | May 2, 2005 11:20:04 AM

Mr. X -

"That would be communism, which isn't necessarily unjust."

Anarchy with 0% taxation isn't "necessarily" unjust, but neither anarchy or communism have proven to be efficient organizing mechanisms for societies to advance.

Posted by: pilsener | May 2, 2005 11:22:40 AM

An unexpected tax incresae might be unjust, but it has one important advantage: it sidesteps the problem of tax planning. The one way to keep tax law from distoring behavior is to impose taxes without any advance warning.

Posted by: buce | May 2, 2005 11:33:25 AM

"Ditto corporations that are paying zero taxes."

Corporate taxes make no sense to me. At some point a corporation has to distribute its profits as income to individuals, which then will be taxed.

"I'm still amazed that we ever had a top tax bracket of 70 per cent at one time."

I lived during those times, and before Kennedy the top bracket was 90%. I have no problem with, say someone who has $5 billion a year in income having that last billion taxed at 90%. C'mon. Nobody deserves that kind of money. And I believe there are lot of social advantages to a leveling tax system.

Caveats. I would insist on income averaging to cover novelists etc. And I recognize billionaires as a minority group subject to oppression by the majority.


Posted by: bob mcmanus | May 2, 2005 11:34:16 AM

RB,
>> it prevents those individuals who are willing to be more productive than others from enjoying the fruits of their labor>Anarchy with 0% taxation isn't "necessarily" unjust, but neither anarchy or communism have proven to be efficient organizing mechanisms for societies to advance. <<

Proven??? Almost all advancement of the human race took place under anarchy or near anarchy conditions.

advance?? Sure. Now we kill each other in new and better ways, and produce more neurotic and psychotic individuals than any simple society ever did.

I teach my kids that peace of mind and the ability to relax is much more important than making money or obtaining power.

Posted by: Mr.X | May 2, 2005 11:39:37 AM

An unjust level of taxation is like an unjust level of rape; Anything above zero, because once you've decided to tax people, you've already decided that there are more important things than justice.

Posted by: Brett Bellmore | May 2, 2005 11:41:37 AM

Corporate taxes make no sense to me. At some point a corporation has to distribute its profits as income to individuals, which then will be taxed.

Well, it's possible that this gives corporations at one of the responsibilities of personhood/citizenship, along with all of the privileges. There also seems to be a hint of the "double taxation" canard in there. If you consider the corporation just another link in the chain of money transfers, and every other link is taxed, why not corporations too?

I have no problem with, say someone who has $5 billion a year in income having that last billion taxed at 90%.

Are you kidding? Billionaires would no longer have any incentive whatsoever to make that last billion if they could only keep $100 million of it. I mean, if you can't keep at least two-thirds of your fifth billion, why even get up in the morning? I refer you to the fact that all rich people gave up on making money, completely collapsing the economy until Reagan came along and rescued them from the poverty of high marginal tax rates.

Posted by: mds | May 2, 2005 11:45:17 AM

Brett prefers a world without police, fire, ambulance, and even national defense?

Posted by: Adrock | May 2, 2005 11:47:21 AM

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