Unsoaking the Rich

The most distressing aspect of soak-the-rich schemes is not that the left keeps pushing them—but that the right regularly fails to offers a convincing refutation.

When Democrats declare that the rich are not paying their “fair share” of taxes, the Republicans’ typical response is: “Oh yes, they are; look at how much more they pay, in both absolute dollars and percentage of income, than those in lower brackets.” Besides—Republicans usually add—refraining from imposing higher taxes on the rich helps “society as a whole,” because of all the jobs produced through their investment capital.

But this type of response does not address the core question. The nature of that question, as well as the absence of a compelling answer, is hinted at by James Taranto, writer of the Wall Street Journal’s “Best of the Web” column, in his examination of a recent New York Times article.

The article, headlined “What Could Raising Taxes on the 1% Do? Surprising Amounts,” offers proposals for taxing the wealthy more heavily. According to several economists, it says, “the government could raise large amounts of revenue exclusively from this small group [of the very richest], while still allowing them to take home a majority of their income.” By squeezing more out of the rich, we are told, the rest of society could enjoy such goodies as free college tuition, free pre-kindergarten programs, and less costly health insurance.

To which Mr. Taranto replies by calling such proposals the “politics of envy” and asking: “How is this any different from enviously imagining what you would do if you got your grubby paws on your wealthy neighbor’s money?”

By the standard of reason and rights, this is an unanswerable question. What justification could there be for enabling some people to benefit simply by seizing the wealth of others?

But by the standard widely accepted today, the answer is self-evident. After all, what is the premise on which the welfare state rests? Isn’t our political system set up to take from those who have more and give to those who have less? Isn’t it based on the notion that if people have unfulfilled needs, others are morally obligated to fulfill them? So if someone desires a college education or health insurance, why shouldn’t he be allowed to demand that others be taxed to pay for it? Aren’t we all taught to subordinate our own interest to the needs of others? Aren’t we taught that the highest virtue is self-sacrifice—which means that one must willingly suffer so that someone else might benefit? Aren’t we taught the moral code of altruism, under which pursuing self-interest is evil and serving others is good?

This is not a code that calls for benevolence among people. You may voluntarily provide help to some innocent victim of misfortune, if you think he deserves it and you can afford it. It would be a gift of generosity, for which the recipient ought to be grateful. But that is not what the doctrine of altruism demands of you. What altruism demands is not the donation of a gift, but the payment of a debt—an unchosen debt you owe to the needy, a debt to which they are entitled. And if you owe it to them, then the government must forcibly collect it on their behalf. This is the foundation of our “entitlement” state.

What Mr. Taranto calls the “politics of envy” is inherent in the altruist ethics. For example, when those on the left campaign against income inequality, they want the “haves” to fulfill their duty to sacrifice for the “have-nots.” It is unfair, they say, that capitalism allows some to earn more than others. But they express no disapproval when everyone is equally impoverished. To the contrary, socialist countries elicit their admiration, despite the fact that virtually everyone’s standard of living there is far inferior to that of the very poorest under capitalism. When everyone is living in misery, there is nothing to sacrifice and the altruist has no complaints. It is only when some have more than others that the call for sacrifice arises—not to lift up the poor but to drag down the rich, whose “fair share” will never be paid as long as anyone has more than his neighbor.

The actual targets of the egalitarian levelers are not just the rich, but anyone able to pay for what someone else lacks. And the proper defense against such attacks is to maintain that your neighbor’s lack does not constitute a moral claim against you. The justification for keeping the money you have honestly earned is not that there is some collective benefit, but that you have no moral duty to become a servant to the needs of others.

It’s only if the individual has a moral right to exist for his own sake that the “politics of envy” can be repudiated.

[This was published as “The Correct Answer to All the Soak-the-Rich Tax Schemes” at RealClearMarkets, Oct. 27, 2015.]

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