Why Should the Rich Pay More?

Because They Get More

Not too many years ago, there was a push for the flat tax. A flat tax, of say 10%, it was said, would be fair, would be easy to calculate, and everybody would pay. Jerry Brown again raised the issue of the flat tax during the 1992 Democratic primary season. He would have added a "value added tax" to it, but the value added tax would also be flat at 13% levied on purchases at the wholesale level, and the 10% would be flat on income. I have discussed the flat tax with craftsmen, in the building trades in the industrial Ohio River Valley west of Pittsburgh and, at least initially, they were for it. Superficially, the idea has great appeal. It's simple. It's "fair". And it can be filled out on a postcard. In short, the flat tax has great appeal and, as a carpenter said to, me, "Why should the rich pay more?"

The simple answer to why the rich should pay more is that they get more, from our tax supported government and from our society. It was best put by the father of conservative capitalism, one of the bright stars of the Scottish Enlightenment, Adam Smith.

"The subject of every state ought to contribute toward the support of government as nearly as possible in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state." Adam Smith, The Wealth of Nations, 1776.

The key phrases that jump out of Adam Smith's Statement say pay taxes in proportion to the ability to pay and in proportion to the amount of money obtained under the protection of the state. Adam Smith is giving us the basis for the progressive income tax. The ability to pay comes under the historical concept of charity. We all owe something to our nation and society, strictly in the sense of Judeo-Christian-Islamic giving—charity. Our taxes should represent giving as sharing according to our ability to pay. People cannot be opposed to Judeo-Christian-Islamic giving and sharing and call themselves human let alone humane.

Taxes also represent payment for a rightful share of the expenses of protecting the revenue-producing function and are a cost of doing business. How could anyone resent paying their rightful share of the expenses necessary to do society's business?

Adam Smith and Judeo-Christian-Islamic charity tell us two functions of taxes. The third reason for collecting taxes comes to us from another intellectual giant, one who took his inspiration from the Scottish Enlightenment, Thomas Jefferson. He said that governments were established to secure to the people their unalienable rights. What Smith and Jefferson provide us is an ecological frame work in which to place taxes.

A clear distinction is required here. We have our unalienable rights as an endowment from our Creator. We don't get them from the government. Government is established to facilitate obtaining and using them: The unalienable rights are, therefore, independent of form of government. Government can inhibit, block, or, obfuscate them, but it cannot deny them for they are not the government's to deny. Mr. Jefferson put a contingency into the Declaration of Independence to cover such a condition: Get rid of the offending government, by any means what ever, and replace it with a government which will insure the happiness and security of the people.

Charity in the sense it is used here is social welfare. There is private social welfare—donations by individuals which are income tax deductible since, by making a contribution, the private citizen is doing the work of the government. Then there is public social welfare—society's mechanism for assisting those who cannot cope on their own. In a human society, social welfare, for the most part, is a poor substitute for the unalienable rights and is an indication of social pathology. It is the action of a mean society which has failed to secure the unalienable rights to the citizens sovereign. In a humane society, one in which all have their unalienable rights, social welfare is a necessary humanitarian activity serving only the very needy, the action of a compassionate society for socially disadvantaged citizens sovereign.

The revenue-producing function is complex and its protection is also complex. Individuals have to be secure in their persons and safe from the mugger's attack on the burglar's intrusion. Companies and corporations have to be secure from monopoly, unfair business, practice, and embezzlement., Not only does the revenue function have to be physically secure; it has to be fair. Injecting, fairness into the business world can only be done by the government, since left to their own devices, businesses revert to animal morality (which is to say, none). Very rich people can afford their own security, forces, but without the support of the government even they are vulnerable to physical attack. Not only must the physical persons of the citizens sovereign be secure, the monies (negotiables, securities, bonds, notes, contracts, bills of sale and lading, et. al.) have to be safeguarded. This function of government and society includes the Defense Department and the Federal Reserve System, the cop on the beat, and the local bank. The richer one is, the more one must depend upon the security forces and the financial and monetary forces of the nation. It all costs money. The money has to come from some place, hence Adam Smith's suggestion that each pay according to the amount of revenue protected by the state.

When Thomas Jefferson declared that we are endowed with certain unalienable rights among which are Life, Liberty, and the Pursuit of Happiness, he was asserting fundamental human rights. He substituted happiness for property, following Francis Hutchison rather than John Locke. The reasoning is abundantly. clear: We all can't be rich, we all can't be equal in property, but we all can be happy.

Property is a language-based technology concept which moved the species from its animal morality and territoriality to its human morality. Property law is amoral or non-moral at best, and immoral at worst. It gave us slavery, sweat shops, child labor and the 14-hour day. Property rights exercised without the restraint of taxation are authoritarian; dictatorial; tyrannical, and fascist. Property rights exercised with reasonably progressive taxation are philanthropic, benevolent, altruistic, and humane.

Taxes provide the financial basis for a society with domestic tranquility, while domestic tranquility is a free people's exercise of their unalienable rights. Free people are the citizens sovereign, the ultimate authority in a republican form of government.

An early 18th Century definition of human rights was "what man needs." We were taught in grammar school that all persons need food, clothing, and shelter. These are but the basic minimum for survival in our society, and do not constitute the basis for thriving. If we are to be happy, we must not only survive but thrive. To, survive and thrive we need the unalienable rights. For our society the unalienable rights are:

• Life
• Liberty
• The Pursuit of Happiness
• Health
• Humane Nutrition
• Humane Habitation
• Education
• A Humane Environment
• Privacy
• The Right of Residency and Movement
• The Right of Voluntary Association
• The Right to Participation in Free Enterprise
• The Right to An Equal Share of the Commonwealth
• The Constitutional Guarantees of Citizenship

Other societies may have requirements for surviving and thriving which differ somewhat from these listed, but those within the core requirements will be the same for all governments and societies.

Historically, the rich have paid scant attention to the unalienable rights. Their guiding principle has been and is property. The rich, over the ages, have objected to paying taxes and, in many societies, have not paid them, either by right of their noble birth or because no one could make them spay them. Ronald Reagan excused the rich from paying taxes starting in the 1980s, and the tax rates are still skewed heavily in the rich's favor. Their tax rate fell from an actual 40% to an actual 15%, an actual reduction of 25%. This lack of good citizenship on the part of the president and his clients has produced a severe dislocation in the tax structure of the nation and its ability to provide the citizens sovereign with the basic services in our social contract. This policy reveals the folly of excusing the rich from paying taxes, and is leading to a police-state as more and more of those receiving the society's lowest incomes become dysfunctional. It is a classic case of property without the restraint of taxes leading to authoritarian, dictatonial, tyrannical, and fascist government.

An examination of the unalienable rights will show that they are more than empty promises or pie-in-the-sky virtues. The unalienable rights constitute the operating basis for the establishment of the socio-ecological and the socio-economic infrastructure of our human society. When we all have the unalienable rights, our society will have evolved from human with its emphasis on property and contract to humane with its emphasis on morality (in stead of law and order) and happiness of the citizens sovereign.

Property and contract are vitally important in a capitalistic society. They are the bulwark of free enterprise and we should do everything we can to keep property and contract rights as efficient and useful as we can. But that means that property rights cannot form the basis of ethics or morality, and very frequently they are the basis of unethical behaviors, such as the immorality of making slaves of humans. Property rights are not the paramount good of our republic, and in no way can alienable property rights substitute for or override unalienable rights. This means that universal condemnation of slavery must be voiced wherever the practice occurs in the world—no matter under what form—and fair, progressive taxation must prevail. Property is not unalienable. The Fifth Amendment of the Constitution allows for the taking of private property with fair compensation. No unalienable right can be taken with fair compensation. No one can sell themselves into slavery.

The unalienable rights have two properties. They have autecological properties as the rights of individual citizens sovereign. Every citizen sovereign has the rights and every citizen sovereign exercises his/her rights individualistically. The unalienable rights become part and parcel of the personae of the citizens sovereign. They form the basis of the education of the citizens sovereign, and the basis of their ability to operate as individuals in our free society. Taken synecologically, the citizens sovereign with their unalienable rights create the interactive, inter-connected, self-generating, self-replicating decision system we call our society. The citizens sovereign, along with their biologically based behavior and their language based inventions, are the socio-ecological and the socio-economic infrastructure. Since the citizens sovereign are intelligent, human beings, capable of making their own decisions and protecting their own self-interests, they are the best placed to profit from the exercise of their unalienable rights. What the citizens sovereign gain from the exercise of their unalienable rights is their ecological equity, the ultimate goal of a democratic/republican society. Society should not inhibit the genetic potential of individual development, but should foster it. Society, with each citizen sovereign having his/her full measure of ecological equity, will evolve to true democratic economics and true republican government. Such a society will maximize its political and economic hegemony and will be the leader of the world.

Why should the rich pay more? The rich should pay more because they get more benefits from the society than anyone else. They make their money under the protection of the state. The state protects the rich's wealth, safeguards and sequesters it, and provides the environment where that wealth is not only safe but where its owners can make more of it and pass it on to their heirs. Financial institutions which safeguard and promote the wealth of the rich are regulated, and in our society insured by the state, for the most part, for the benefit of the rich. Among the forces from which the rich must be protected are the rich themselves. Left to their own devices, the rich would fight it out to the last man—until there was only one king on the hill and everything else was in ruins.

History is abundantly replete with the bones of such controversies. The rich are aggressive about their wealth, and this seems to be because they think that if they are not aggressive about it they will lose it, and that the loss of any part of it could jeopardize the loss of the whole. One sees the results of this paranoia more in the Third World with all its coups than in the United States, but some reasoning like this could have been operating when, for no apparent reason, John F. Kennedy was assassinated. Forgetting the circumstances of JFK's death, we find that the rich have been making out very well ever since he was killed. Their taxes have been lowered to the point where social disintegration is happening because of the loss of tax base. What we see is the result of the tax code being structured so the rich pay at a lesser rate than the middle class. We also see, as a result, a nation in disarray, foundering, listless drifting into economic, moral, and ethical morass.

The rich have profited handsomely while the rest have come up short. The social safety net has been so shot full of holes that millions have become dispossessed, homeless, strangers, and derelicts in their own homeland. It's time to heed the advice of the arch deacon of the capitalistic system, Adam Smith, and have people pay taxes in proportion to how they benefit from the system. The rich should pay more. We all have to pay, according to our ability to pay; the rich have a special obligation to do the same. Why? Because whether they make their proper contribution or not makes the difference between a surviving, thriving society and a disintegrating society such as we have now.

It's not right. It's immoral and un ethical. It's lousy economics. It's not democratic. It's bad capitalism, and it's a helluva way to run the world's richest, most enlightened republic.

...Ted Sudia...

© Copyright 1992
Institute for domestic Tranquility