Nic Tideman: Improving
Efficiency and Preventing Exploitation in Taxing and Spending Decisions
Two of the most troublesome features of taxation and public spending are that
taxation relies on coercion, and that the combination of taxing and public
spending generates substantially haphazard redistribution. People must pay
their taxes on penalty of having their property confiscated, or of going to
jail. And we cannot say that this process is for everyone's good.
There is reason to believe, though we do not have the basis to say for sure,
that some people receive much less in benefits from public spending than they
pay in taxes. How do we justify the harm that is thereby done to some persons
by the combination of taxing and public spending? I would like to address this
question by first discussing some possible justifications that might seem attractive,
but should be rejected.
- One possible justification is conservatism:
Things have always been done this way. Our institutions have evolved to solve
social problems that we may not even be aware of. Who knows what terrible
things might happen if we did things differently?
There is an element of validity to the conservative position, but not
an adequate basis for making conservatism the primary principle of social
organization. If we had adopted conservatism as the primary principle
of social organization centuries ago, there would have been no end to
slavery, no women's suffrage, nor any of the numerous other changes in
social organization in response to improvements in our moral understanding.
It would be foolhardy to assert that we will never experience further
improvements in our moral understanding that will call for changes in
- A second possible justification of public spending is majoritarianism: Once we have voted we know
the right thing to do. The possibility of majority-rule cycles undermines
the simple-minded version of majoritarianism that says that the majority
is always right. Still, it would be possible to assert that majorities
should have their way when cycles are not observed, and that when they
some device for cutting through cycles can restore the viability of majoritarianism.
However, that would give free rein to any majority to exploit any minority.
That makes no sense as a theory of justice. One could assert that voters,
acting as judges of what is best rather than as self-interested advocates,
have a claim to determine in a majoritarian fashion what a collectivity
ought to do. But then one still needs a theory of the principles by which
ought to judge.
- A third possible justification of public spending is egalitarianism: People should be required
to provide as much for others as they have themselves. This theory
suffers from the difficulties of vagueness and questionable operationality.
what? There is no way to ensure that all persons will have equal quantities
of such valued things as affection, talent or self-confidence. It is
possible to imagine a crude egalitarianism of goods, but only by eliminating
to be productive. If equality is traded off against some other goal,
then egalitarianism is no longer the first principle.
Rawls manages to retain the primacy of egalitarianism without destroying
all incentives to be productive by the maximin rule: Laws should be designed
to maximize the well-being of the least advantaged person. This formulation,
however, generates such anomalies as the following: If there are three persons,
and the choice is either a distribution of $10,000, $12,000 and $50,0000,
or a distribution of $10,001, $10,002 and $80,000, the maximin rule
will select the latter, despite the fact that it makes the middle income
who is already relatively poor, even poorer while making the richest person
noticeably richer. In Rawls's particular formulation there is a further difficulty.
He makes the maximin rule lexically subordinate to the rule that all
persons should have the maximum individual liberty that all can have. However,
he does not deal with the following problem: My individual liberty will be
unnecessarily restricted if I am not allowed to sing you a song in exchange
for a haircut (without being taxed), but if I am allowed to do so without
being taxed, the maximin rule is not satisfied. If Rawls really does mean
individual liberty lexically first, no redistributive income taxes would
be permitted. ... read the whole article
Peter Barnes: Capitalism
3.0 — Chapter 7: Universal Birthrights (pages 101-116)
The standard argument against third wave universal birthrights is that,
while they might be nice in theory, in practice they are too expensive. They
impose an unbearable burden on “the economy” — that is,
on the winners in unfettered markets. Much better, therefore, to let everyone — including
poor children and the sick — fend for themselves. In fact, the opposite
is often true: universal birthrights, as we’ll see, can be cheaper
and more efficient than individual acquisition. Moreover, they are always
How far we might go down the path of extending universal birthrights is
anyone’s guess, but we’re now at the point where, economically
speaking, we can afford to go farther. Without great difficulty, we could
add three birthrights to our economic operating system: one would pay everyone
a regular dividend, the second would give every child a start-up stake, and
the third would reduce and share medical costs. Whether we add these birthrights
or not isn’t a matter of economic ability, but of attitude and politics.
Why attitude? Americans suffer from a number of confusions. We think it’s “wrong” to
give people “something for nothing,” despite the fact that corporations
take common wealth for nothing all the time. We believe the poor are poor
and the rich are rich because they deserve to be, but don’t consider
that millions of Americans work two or three jobs and still can’t make
ends meet. Plus, we think tinkering with the “natural” distribution
of income is “socialism,” or “big government,” or
some other manifestation of evil, despite the fact that our current distribution
of income isn’t “natural” at all, but rigged from the get-go
by maldistributed property.
The late John Rawls, one of America’s leading philosophers, distinguished
between pre distribution of property and re distribution of income. Under
income re distribution, money is taken from “winners” and transferred
to “losers.” Understandably, this isn’t popular with winners,
who tend to control government and the media. Under property pre distribution,
by contrast, the playing field is leveled by spreading property ownership
before income is generated. After that, there’s no need for income
redistribution; property itself distributes income to all. According to Rawls,
while income re distribution creates dependency, property predistribution
But how can we spread property ownership without taking property from some
and giving it to others? The answer lies in the commons — wealth that
already belongs to everyone. By propertizing (without privatizing) some of
that wealth, we can make everyone a property owner.
What’s interesting is that, for purely ecological reasons, we need
to propertize (without privatizing) some natural wealth now. This twenty-first
century necessity means we have a chance to save the planet, and as a bonus,
add a universal birthright. ... read
the whole chapter
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