44
   

Why should rich people pay a greater share of their wealth to taxes?

 
 
Rockhead
 
  0  
Reply Sun 7 Aug, 2011 12:05 pm
@Robert Gentel,
you might do better to post a list of folks that meet your standards.

or pass out free anti-venom somewhere...
Robert Gentel
 
  1  
Reply Sun 7 Aug, 2011 12:07 pm
@roger,
roger wrote:
Capital is a component of wealth. When I was a machinist, my tools were my capital, and capital is what enabled me to produce taxable income. I must have the one to produce the taxable other. Had I been out of work for a long enough time, taxing my capital would have eventually impared my ability to produce income, and noone would have gained. Obviously, noone is talking about taxing an individual's tool set, but you should get the idea.


I do get the idea, and it appeals to me in a vague way that I am trying to pin down better ethical codification for. For some reason I think that taxing wealth is less desirable than taxing income but am having a hard time codifying why.

I'm not sure that is it either, because I suspect that a strong case can be made that income can itself be a tool to generate income and that this isn't the distinction between income and wealth that would differentiate their appropriateness for taxation.

If you happen across any other ratiocination as to why they should be treated differently for taxation I am very interested, ever since you posted that I've found myself agreeing but not quite understanding why.
maporsche
 
  2  
Reply Sun 7 Aug, 2011 12:08 pm
@Robert Gentel,
This may have already been brough up, but I think 'rich' people deserve to pay a higher percentage of their money in taxes mainly due to the fact that the government serves to protect their interests and wealth much more than it does the middle class. They simply have more to lose, so they should be more vested.

Think of how much of our government is devoted to providing economic security. When the stock market drops 400 points, I lose a few thousand dollars....Mr. Billionare loses millions and millions.

When gas prices double, I drive less and bike more. Mr. Billionare business-man sees his company go out of business or profits shrink.

When 9/11 happens, 3000 people lost their lives; which is tragic for those involved, but for the 300 million other people much less so...but for businesses and billionares it was devastating.

The government is charged with protecting the environment that enables people to safely be millionares and billionares. They need to pay more to support their own interests.
maxdancona
 
  1  
Reply Sun 7 Aug, 2011 12:14 pm
@Robert Gentel,
I think the problem here is that this isn't an ethical question (outside of when it causes suffering).

I think a progressive income tax is a good idea not because of any ethical argument, but because it works. It is a good way to create the type of society that I (and many other people) want to live in.

So then the question is, is there any ethical reason that rich people shouldn't pay more?

I think there is no such reason. Then it becomes a simple utilitarian question of what system brings us closer to the desired outcome.

Obviously this argument is an an argument of moderation. There should be some balance where society adjusts the system to better meet its values. This is exactly the discussion that the US is starting. What makes it difficult is that we have different ideas about what our values are.

But I don't think this is an ethical question. It is a question of balance to find an agreement that most of society thinks is good.



Robert Gentel
 
  2  
Reply Sun 7 Aug, 2011 12:20 pm
@DrewDad,
That doesn't answer my question but I'll humor you in case you have a point that now eludes me.

DrewDad wrote:
1. Are taxes ethical/moral?


I do not find it unethical to create a social compact that includes taxation.

Quote:
(Is the state's continued survival justification for taking private property? Is this an absolute justification? A social contract?)


To me it depends on the situation and state. I do not think that all states are inherently worth saving, for one.

Quote:
1a. Is the level of taxation relevant to its morality? (Is there a level of taxation that is immoral?)


I think that taxation without representation is something that clearly violates rights most humans would like to maintain such as the degree of self-determination and pursuit of individual happiness.

So I can envision a situation, yes, where I would find the level of taxation in relation to what the taxed get from the social compact to be unethical.

And in most cases, I would find a tax above 50% to be untoward, as it would mean that the individual is no longer a majority stakeholder in their income and think that the individual sacrifice to the collective society should be less than to take a majority of the fruits of their labor.

I'm not sure that I can articulate a great ethical argument for why I feel that is a threshold that begins to become oppressive taxation but it is a psychologically strong argument to me, that people should be allowed to control the majority of their economic output, instead of having their government control the majority while they are left with some minority of it.

At the same time I think more collectivist people might not have a problem with this, and may actually prefer such a society. If that was the case I would have a hard time arguing that it was unethical so I think self-determination is a big part of it.

I would not like to sign a social contract that makes me a minority stakeholder in my economic activity, I would find it unethical to compel people to live under such a social compact but do not find it inherently wrong.
Robert Gentel
 
  1  
Reply Sun 7 Aug, 2011 12:24 pm
@Rockhead,
Rockhead wrote:
you might do better to post a list of folks that meet your standards.


I don't see why it can't be self-selecting. He's already posted to my last ethical discussion that he find this to be useless intellectual masturbation, and I told him then that I don't see why he couldn't then leave the thread to those who don't find it useless.

I was certainly more polite about it last time but it gets frustrating to be told that your discussion is useless when he can just as easily not participate if he feels that way. I stand by what I said, including the frustrated tone (I tried subtle last time), if he finds philosophizing useless then I ask him to have the courtesy to let those who don't find it useless to extract some utility from it, and ask that he recognize that coming in just to **** on threads you don't find interesting is not considerate.

It would be like if I entered his every silly thread to tell him how useless it is: obnoxious.
Rockhead
 
  -1  
Reply Sun 7 Aug, 2011 12:26 pm
@Robert Gentel,
it's your house.

set the bar where you want it...
0 Replies
 
Robert Gentel
 
  1  
Reply Sun 7 Aug, 2011 12:29 pm
@maxdancona,
maxdancona wrote:
I think the problem here is that this isn't an ethical question (outside of when it causes suffering).


This word "ethics", I don't think it means what you think it does.

Quote:
What, then, is ethics? Ethics is two things. First, ethics refers to well-founded standards of right and wrong that prescribe what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness, or specific virtues. Ethics, for example, refers to those standards that impose the reasonable obligations to refrain from rape, stealing, murder, assault, slander, and fraud. Ethical standards also include those that enjoin virtues of honesty, compassion, and loyalty. And, ethical standards include standards relating to rights, such as the right to life, the right to freedom from injury, and the right to privacy. Such standards are adequate standards of ethics because they are supported by consistent and well-founded reasons.

http://www.scu.edu/ethics/practicing/decision/whatisethics.html


Quote:
But I don't think this is an ethical question.


I may certainly be wrong about it being an ethical question but I do not think so and feel very strongly about you not really understanding what an ethical question is.
0 Replies
 
wayne
 
  1  
Reply Sun 7 Aug, 2011 12:35 pm
I wonder if the question, and viewpoint, are not upside down here.
Doesn't it change things to consider the question as whether those with lesser income should pay a smaller share in taxes?
Robert Gentel
 
  2  
Reply Sun 7 Aug, 2011 12:43 pm
@wayne,
To me it changes things a lot and I support the concept of the poor shouldering a lesser burden in society. I would prefer to have the tax flat like anyone else's and their situation ameliorated by social spending from taxes (so they in effect might get back more than they pay) but I would also be find with exempting them.

But the crux of the arguments are very different to me, there is clearly a point at which taxation can cause suffering but the way it typically breaks down is to extend this courtesy to the majority of the democratic population and I feel that this is often used to extend such generosity to whatever socio-economic class holds the democratic majority, regardless of whether they actually need it that much.

To put that very simply, I think that there certainly are some who can't reasonably afford taxes at all, but I think a lot of the middle class that can would like to shift as much of the burden onto a demographic minority as they can.

In America this hasn't been too much of a problem, but there are other cases of runaway populism that can't be described as anything but the tyranny of the majority. Places like Venezuela have their economic growth stunted by runaway economic populism and then it becomes a case of not even adequately serving the majority, even if you set aside any ethical concern it just becomes counter productive to their goals at some point.

That doesn't, of course, invalidate any progressive taxation, or even economic populism as a concept, but it serves as a better example of a clearly less-than-ideal approach to class conflict where everyone ends up a looser .
Robert Gentel
 
  1  
Reply Sun 7 Aug, 2011 12:46 pm
@maporsche,
maporsche wrote:
This may have already been brough up, but I think 'rich' people deserve to pay a higher percentage of their money in taxes mainly due to the fact that the government serves to protect their interests and wealth much more than it does the middle class. They simply have more to lose, so they should be more vested.


It has come up, and my counter-argument to it was that even with a flat tax they would pay more.

The counter-argument to that was that they also benefit proportionally more, which I find a much more convincing argument but that I remain unconvinced by at the moment.
0 Replies
 
Robert Gentel
 
  2  
Reply Sun 7 Aug, 2011 12:54 pm
@Thomas,
Thomas wrote:
Nonetheless, I prefer to have the state run a shelter for families like Robert's squatters, and pay for it with a property tax on boathouses. That way, the family still gets its shelter, but all boat house owners pitch in equally, and everybody lives under known and enforced legal rules.


I agree, and would also point out that this is another way to demonstrate what most of us all agree with (despite the efforts in this thread to characterize motivations differently:

It is to everyone's interest to have a healthy society without large gaps in wealth. The rich pay a "security tax" in countries where there is a great discrepancy in wealth. Even in a relatively peaceful and socially progressive country like Costa Rica the private spend on security eclipses the government spend.

But this is still something that I think can be addressed without proportional differences in taxation. If the government increases taxes to increase security the rich would still pay more under a flat system and those with more to secure would still be paying more than those with less.
0 Replies
 
Setanta
 
  -1  
Reply Sun 7 Aug, 2011 01:08 pm
I see that if the interest of the question is sufficient for you, you're willing to drop the bullying insistence on a discussion of ethics. Surprise, surprise.
0 Replies
 
wayne
 
  2  
Reply Sun 7 Aug, 2011 01:15 pm
@Robert Gentel,
The problem, as I see it, with the flat tax coupled with amelioration theory, is that it doesn't address the concentration of wealth at the upper extreme or the dilution of wealth at the lower.
What we've got is a huge discrepancy in the seriousness of the game along the spectrum.
This, imo, is in large part responsible for the unstable middle class economy.

At this point the demographic minority, of which you speak, is so far away from the majority as to live on another planet.
Bear in mind, we are not talking about investment capital here, we're talking scorecard wealth here. A large share of which has been gleaned from the retirement investment pyramid.
Robert Gentel
 
  2  
Reply Sun 7 Aug, 2011 01:35 pm
@wayne,
wayne wrote:
The problem, as I see it, with the flat tax coupled with amelioration theory, is that it doesn't address the concentration of wealth at the upper extreme or the dilution of wealth at the lower.


I don't really think progressive tax does much to address that either though, and also am concerned about the ethics of addressing it inherently rather than addressing the systemic injustices that are alluded to in order to justify the more blunt taxation approach.

If a self-reinforcing concentration of wealth is the target I don't think that targeting all wealth is a very good way to deal with it. It would target those rising out of lower classes to become wealthy just as much as the dynastic wealth and I think that there must be better ways to address that if it is the problem that taxes seeks to address.

I also don't subscribe to the idea that using taxes to try to perform social engineering is unethical but it doesn't sit right with me for a variety of reasons to use taxes as an instrument to redraw class lines. I like the use of tax revenue to do that but feel differently about give than take.

Quote:
At this point the demographic minority, of which you speak, is so far away from the majority as to live on another planet.


I'm curious about something that this reminded me of: do you find such a discrepancy inherently unethical? That is, it is inherently wrong to be "filthy rich" and occupy a socio-economic demographic in an entirely different stratosphere?
wayne
 
  2  
Reply Sun 7 Aug, 2011 02:00 pm
@Robert Gentel,
Quote:
I don't really think progressive tax does much to address that either though, and also am concerned about the ethics of addressing it inherently rather than addressing the systemic injustices that are alluded to in order to justify the more blunt taxation approach.


I'm not thinking in terms of this being anymore than a small step in the right direction. There are far more problems than progressive tax can solve.
I don't really see it so much as injustice, as a failure of responsibility.

Quote:
I also don't subscribe to the idea that using taxes to try to perform social engineering is unethical but it doesn't sit right with me for a variety of reasons to use taxes as an instrument to redraw class lines. I like the use of tax revenue to do that but feel differently about give than take.


I don't think I'd call it social engineering, per say, I think it's just a matter of being in the same boat.
Shouldn't class lines take a backseat to national wellbeing?

Quote:
I'm curious about something that this reminded me of: do you find such a discrepancy inherently unethical? That is, it is inherently wrong to be "filthy rich" and occupy a socio-economic demographic in an entirely different stratosphere?


In a free world, yes, at a certain point such a discrepancy essentially makes slaves of the working class.
Leadership deserves to be rewarded, no problem.
But what we're talking about isn't leadership, it's an overworld and becomes detrimental to society as a whole.
How would you view it were there to be a class of persons living on a small eden orbiting the earth, that dropped in from time to time to take the very best of our goods and services?

Robert Gentel
 
  2  
Reply Sun 7 Aug, 2011 02:17 pm
@Thomas,
Thomas wrote:
That's not the extreme of the Utilitarian argument, because total equality would not be utility-maximizing. As you say, redistribution discourages production. Hence, the utility-maximizing tax policy is to redistribute income from rich to poor, but only up to a point. That point is reached when the utility gain for the poor is offset by the utility loss for the rich plus the productivity loss for everyone. In practice, we turn out to reach it well before we get to full equality, but well after we move from flat taxes to progressive taxes. That's what it means to take the utility-maximizing argument to the extreme; I don't see why we shouldn't take it there.


I agree with you. I was using an inordinately superficial operating definition for utilitarianism to the point of mischaracterizing it. Having though about utilitarianism a bit more this weekend I think it taught me something (for which I thank you) and I would like to posit my position a bit differently:

What I'd like to express is that what I'd most like to maximize is happiness (and thusly minimize suffering) and I wonder if there is a point at which economic productivity might be maximized while not maximizing happiness and minimizing suffering. Whether there is a gap between ideal economic utility and ideal happiness and whether you feel that abridging one's property rights carries a greater cost than the pure economic cost. I suspect you do, as you said that it would depend to you what the utility of the boat house is to the owner, and I'd like to clarify if you consider things such as sentimental value or purely economic value.

I guess I might be asking if you are a utilitarian economist or a utilitarian ethicist, while suspecting the latter. Or maybe more appropriate is that I'm asking you what your core values for utilitarianism are. I am finding that my "maximizing happiness" criterion is perhaps too simplistic because I am not willing to compromise individualism to collectivism too much (perhaps because of how deeply I cherish being able to be individualistic).


Quote:
It depends on the utility of the boat house to the family, on the utility of the boat house to the millionaire, and the utility to both of the social contract they're living under.


I think the last line is the main qualifier for what I'm asking. Maybe this is a good question: if there were a society that had a social contract wherein any property that is not being utilized maximally can be used by those who can demonstrably show they are better able to use it.

Does that run into your libertarian streak at all? It positively rubs mine the wrong way.

Quote:
If you want a categorical yes-or-no answer, I can't give it to you. That said, I do approve of the homesteading ethic, under which 19th-century small farmers in America sometimes appropriated idle land that had belonged to large private estates. And I generally approve of the "squatters" who call for homesteading-like rules of land ownership in today's Brazil.


I am not as familiar with the Brazilian "Sem Terra" movement as you might be, but my superficial impression of it is that they don't extract a lot of utility themselves. At least most of the coverage I have seen of them seemed more like nomadic protesting.

Quote:
I do believe in other kinds of property redistribution.


I was very unclear, what I meant was if there is any kind of property redistribution other than the most obvious ones (such as violent robbery) that you disapprove of I would love to know what basis you do that on. Would you approve, for example, of a society in which someone who demonstrates a greater ability to utilize my watch would be able to successfully prosecute a claim for it, for example?

I don't, and suspect you might not be too keen on it and would like to know if you are able to articulate a better reason why than I am able to.
Robert Gentel
 
  1  
Reply Sun 7 Aug, 2011 02:38 pm
@wayne,
wayne wrote:
In a free world, yes, at a certain point such a discrepancy essentially makes slaves of the working class.


I guess this is where a fundamental disagreement with our positions occurs, I do not see it inherently doing so and when it does would rather see the systemic ways in which it does so be addressed.
wayne
 
  1  
Reply Sun 7 Aug, 2011 02:47 pm
@Robert Gentel,
Quote:
I guess this is where a fundamental disagreement with our positions occurs, I do not see it inherently doing so and when it does would rather see the systemic ways in which it does so be addressed.


I find it interesting that we disagree here, I'd be interested to know how you view such an imbalance of power playing out.
I'm of a school with the old adage "power corrupts, absolute power corrupts absolutely"
Robert Gentel
 
  1  
Reply Sun 7 Aug, 2011 02:54 pm
@wayne,
I am deeply skeptical of absolutism, which is how I view such a maxim. I would be the one demanding it lose its poetic license for more nuance:

"Power may corrupt, and there is a correlation between the degree of power and the degree of corruption."

I think an imbalance of power can play out multiple ways and that some are less desirable than others, and if any are deemed unethical or unfair under the social contract that said behavior, rather than the existence of power itself, should be targeted when possible.
 

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