Reply to Uncle T on Taxes, Redistribution, Incentives

Uncle T,

You wrote: "Most [high producers, i.e. rich], also, despise, being forced, under penalty of jail (not paying taxes) to mandatory giving."

Two problems with that: (1) the rich aren't giving enough to charity to really make a dent on pervasive poverty, like conservatives say they should; and (2) my goal is to persuade people that it's good to accept higher taxes voluntarily, because it will benefit society as a whole in the long run, and make everyone more productive -- through better education and health care, clean environment, safe neighborhoods, elderly relatives taken care of, etc.

BTW, interesting factoids: Adam Smith went to college on a scholarship (i.e. state charity); never had a "real" job until nearly in retirement; and had already earned in his youth a lifetime pension from the state for tutoring the Duke of Buccleuch for only 2 years.

You wrote: "Conservatives believe that society will progress based upon incentives and liberals believe that society will progress based upon equal distribution."

It's not either or. Tax policy is a classic case of incentivizing certain behaviors. Taxes on cigarettes are meant to make smoking less attractive. Tax cuts in special "development zones" are meant to attract investment. Tax deductions for charitable giving are meant to encourage donations. Etc., etc. As the book Freakonomics points out, there are also moral incentives: the reason why people don't steal from a common contribution jar in the kitchen at work for some charity, for instance, is because of the moral stigma, and how badly they'd feel about themselves if they stole. So, again, my hope is that people can be persuaded ( i.e. given the moral incentive) to level the playing field voluntarily, and not accept 3rd World-levels of wealth disparity as just "the way things are."

I don't know any liberals who believe in "equal distribution", which would be communism. We'd have to tax Bill Gates to death to make him equal to even the average millionaire. Yes, I do believe in redistribution, but doing it smartly and for good reasons, through our elected representatives.

Indeed, let's recall that redistribution of wealth (at first of one's crops) was one of the main reasons people formed governments in the first place. Letting the king/chief/elder collect and redistribute the harvest equitably made sure that nobody starved in times of drought or war; and as organized societies got bigger, collecting and redistributing wealth allowed some people to specialize their labor: they didn't have to worry about farming for their food, they could study language, religion, or law, or be a full-time soldier protecting the group. If it weren't for redistribution of wealth, there would be no lawyers like you today! We'd all still be subsistence farmers living in perpetual fear of marauders.

Sorry for the history lecture, but it's worth pointing out that redistribution is not something evil and diabolical; it made us who we are today.

The people, through their elected representatives, decide what is each person's "fair share" to give. To answer your question, if somebody doesn't pay his taxes as the law proscribes, he should be fined or jailed, just like we punish people for any other crime. Again, my goal is to persuade people that the super-rich aren't giving their fair share, and that the working and middle classes are giving way too much.

It's not "stealing," i.e. "taking from the rich and giving to the poor" if the people, through their elected representatives, make it law. If you're rich, you have then have three choices: obey, disobey (and face the consequences), or leave the country. As the must-read book Perfectly Legal documents, many rich people have effectively opted to leave the country, by making their legal residence in the Caymans, Caribbean, or other tax haven, while living full-time in the US and enjoying all the benefits of others' taxes (police, education for their employees, roads, airports, health & safety standards, environmental standards, etc., etc.)

I've said before, it's not a question of "are there enough opportunities for Uncle T" to succeed through hard work and education; the question is, with smarter government policies, could we encourage or enable even more people to become more productive, hence helping them contribute more to the economy and to tax revenue? I don't like this anecdotal approach to the debate, where you point out one guy's success story, like Ragged Dick, and then ask, "See, why can't everyone emulate Ragged Dick?" For every success story, I could find 10 hard luck stories of people who just didn't pan out for one reason or another: sudden illness, caring for a sick relative, accident, disability, untimely pregnancy, discrimination, etc., etc.

Again, it comes down to this: Do you believe we're all in this together; or is it every man for himself, grabbing everything he can possibly get?