The Democrats’ position in the negotiations to raise the debt limit and deal with runaway government debt can be summarized in one mantric phrase: the rich must “pay their fair share” in taxes. White House communications director Dan Pfeiffer, for example, said a day before the Obama’s Sunday summit with Congressmen that any deal requires a “balanced approach that asks the very wealthiest and special interests to pay their fair share.” Earlier this year, Illinois Congressman Jan Schakowsky introduced legislation called the Fairness in Taxation Act, which she justified by saying “It’s time for millionaires and billionaires to pay their fair share.” Clearly, the Democrats think this is a winning formula going into the critical 2012 elections, despite the historically verified fact that raising tax rates on top earners will not over time generate more tax revenues.
Some political Socrates needs to challenge this formula by asking for a definition of “fair.” Clearly, having the top 10% of taxpayers pay 70% of all income taxes––while nearly half of taxpayers pay nothing––isn’t considered “fair” by those who want to increase taxes on high earners. So what would be fair? Having the top 10% pay 80%, or 90%, or 100%? The U.S. already has the most progressive tax system among 24 OECD countries, ahead of socialist heartthrobs like Sweden and Norway, so what more do Democrats want?
A clue to what they really want can be found in a comment by Peter Whiteford, who wrote the chapter in the OECD report containing the comparative data on tax progressivity: “Progressivity is not the same as redistribution. Progressivity measures how the distribution of the tax burden is shared, while redistribution measures how much the tax system reduces inequality. . . . If you want to reduce inequality, you need to increase the level of taxes collected and spend it more effectively,” by which he means spending more tax revenue on “social security and services” in order “more effectively” to reduce income inequality.
So Democrats by “fair” mean what then candidate Obama let slip when he told Joe the Plumber it benefits everybody to “spread the wealth around.” Federal tax policy is the way to do that and correct the “income inequality” that to progressives is a sign of this country’s systemic injustice. But lurking behind that estimation is the radical egalitarian hatred of differences in achievement, wealth, talent, drive, or sheer luck that create most inequality.
The other words, the real issue here isn’t economics, it’s philosophical. The essence of the progressive vision is the equality of result predicated on the assumption of radical egalitarianism, the notion that “those who are equal in any respect are equal in all respects” as Aristotle put it. And since people in reality aren’t all equal and success reflects differences in ability, virtue, and hard work, the coercive power of the state must be used to achieve the aim of what Plato criticized as “dispensing a sort of equality to equals and unequals alike,” a form of injustice that ignores differences of talent, effort, and achievement.
As always, behind every policy is a good idea or a bad idea about human nature and existence. The progressive notion that the power of the state wielded by techno-elites can create a more just world is one of modernity’s worst ideas. Pace Bill Clinton, it’s not “the economy, stupid,” it’s the philosophy. That’s where the battle of 2012 must be waged.