Fairness and Taxes

The notion that "the rich ought to pay their fair share" in taxes is one that has been with us a long time and has recently gained a great deal more currency.  This is usually, though not always, thundered by socialists, fellow-travelers, and poor people who don't pay much in taxes themselves.  However, the notion simply does not hold water, regardless of the level of taxation under either of two views of taxes.

We can think of taxes in two different ways, which I will call the Leftist and the Rightist views for reasons I will not explain here--simply note that the reasons are complex and so should not necessarily be associated with people bearing the labels Leftist or Rightist in other contexts.  The Leftist view is that taxes are involuntary contributions exacted under threat of force and of a degree determined by the state.  The Rightist view is that taxes are essentially voluntary contributions granted to the extent that the interests and abilities of the payers permit.  The Leftist view describes what actually prevails today in the United States, but the Rightist view might be associated better with other times and places.  One simple way to differentiate between the two types would be thus: under the Rightist type, the state is under the effective control of the major taxpayers and there is no thought of externalizing those costs; under the Leftist type, either the state is controlled by non-taxpayers or the costs of the state are externalized to people not in control of the state.

If we consider taxes under the Leftist view, we find that taxes are a burden inflicted upon people by the state.  In this case, "fairness" is not an issue--the most "fair" level of taxation would be no tax at all, or if one must have some taxes, a capitation tax.  But let us suppose a more complex scenario that one might say changes things.  Consider the case that a Rightist state is in a fiscal crisis and the ruling group tries to externalize the costs.  Would it not be fair to say that the classes who control the state are not paying their fair share because they should not be externalizing the costs?  What this claim actual demands is that the Rightist type of taxation be maintained rather than a Leftist one instituted.  And the complaint is properly not that the ruling classes are not paying their fair share, but that people whose "fair share" is zero are being taxed at all.

Under the Rightist system, class fairness does not enter either.  Particular individuals may pay more or less than they can afford, but since the ruling class is also the taxpaying class, there is no issue of whether it as a whole pays its fair share.  If there is a mismatch between the abilities of particular individuals and the needs of the state, those are to be addressed on an individual basis, not on a class basis, and there is certainly no reason for a major public discussion on the subject of whether the Smiths and the Joneses are paying their "fair share" in taxes.

A libertarian will notice that I've used the term state in a loose sense that is different from the one we customarily use.  I do so for the sake of generality, since many other thinkers have used the term in a different sense than we do, and I will hopefully explain this in a later post.