Tax Analysts Blog

Moral Abdication Dressed Up Like Hard-Nosed Realism

Posted on Dec 4, 2012

President Obama's "fair share" rhetoric really drives some people crazy. And by some people, I mean conservatives, because liberals are generally happy to link morality and economics. But for a certain type of conservative, the link is both specious and dangerous; specious because economics and morality are separate realms of human existence and dangerous because the linkage is a blank check for anyone looking to rob from the rich and give to the poor.

Now many people unhappy with Obama's "fair share" rhetoric don't really object to the notion of fiscal fairness at all. They acknowledge that some theoretical distribution of tax burdens can accurately be described as fair. They just don't think that such a distribution would look anything like the one Obama is currently advancing in the fiscal cliff negotiations. These critics tend to emphasize the already-large percentage of overall tax revenue currently collected from the rich. Implicitly, the resort to such data recognizes the existence of a fair share -- it just doesn't recognize Obama's definition of it.

Another sort of conservative takes aim at the notion of progressivity, arguing that efforts to scale tax rates to income are inherently unfair. The only fair tax, they insist, is a flat one. The Scottish economist J.R. McCullough made the same point in the 19th century: "The moment you abandon . . . the cardinal principle of exacting from all individuals the same proportion of their income or their property, you are at sea without rudder or compass, and there is no amount of injustice or folly you may not commit." More recently, Kip Hagopian has called progressive rates "an invitation to abuse."

I don't agree with that assessment, but at least I understand it. A third sort of critique, however, strikes me as utterly incomprehensible. This challenge to the Obama rhetoric rejects the very notion of economic fairness. Writing at The Reformed Broker, Joshua M. Brown makes the case with gusto:

    "Fairness" in economic terms (or anywhere else in life) is a bulls*** concept, as fantastical as Peter Pan's shadow or Donald Trump's self-awareness ... Post-kindergarten, there's no such thing as fairness."

Brown goes on to make a very non-conservative argument for saving the middle class from the depredations of the rich, but he roots his case in practical terms. Prosperity, he contends, depends on a healthy middle class. As a result, redistribution is an economic imperative, not a moral one.

By extension, Brown is impatient with complaints that rich people are trying to skirt their responsibilities, specifically by paying less than their "fair share" in taxes. "The fairness aspect is irrelevant," he writes. "Since when in the history of human civilization did wealthy people not make the rules so that their advantages would be assured?"

On a certain level, this argument is appealing, as are most efforts to make debate about economic policy more dispassionate (or at least less irritatingly moralistic). But it ignores the enduring power of fairness arguments in American politics - especially, but not exclusively, fairness arguments about tax policy. Americans have always responded to claims about tax fairness. Indeed, the nation's fiscal history -- and its governmental institutions -- have been defined by such arguments.

Redistribution has never been the product of far-seeing industrialists who paid their workers well because they understood the importance of shared prosperity (though Brown makes a fair point when he cites Henry Ford for doing just that). Nor has it been the product of visionary elites willing to tolerate progressive taxation for the sake of economic growth and shared prosperity. Both high wages and progressive taxation were hard won victories; organized labor deserves credit for the former and progressive politicians for the latter. And in both cases, fairness arguments proved decisive.

Conservatives are right when they say that notions of fairness are mushy and unreliable, at least when used to guide policy formulation. But they are also a fact of political life. Hard-nosed economic realism provides no shelter from the danger of arbitrary taxation. Indeed, efforts to banish fairness from the tax debate are themselves unrealistic -- a fanciful and ahistorical effort to change the subject.

Good luck with that.

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