Taxation and Property Rights

The Common Wealth

Taxation brings together the common wealth to build a common infrastructure that we all need to fulfill our individual needs and dreams. Progressive taxation is fair: Those who benefit most from the common wealth should pay the most to sustain it. As George Lakoff puts it:

"We know from the principle of the common wealth for the common good that no one makes it on his or her own in this country, and that the more you make, the more you have used the common wealth, and the more responsibility you have to pay to maintain the common wealth."

And who invented and manufactured the computers that cleaver stock investors use to place their programed stock trade orders an instant before the rest of us?

We also stand on the shoulders, if you will, of our government. George Lakoff, in this articlepraising President Obama April 13, 2011, speech on our values, describes some ways that our government has supported the amassing of wealth at the top:

The fact is that the rich have gotten rich because of the government -- direct corporate subsidies, access to publicly-owned resources, access to government research, favorable trade agreements, roads and other means of transportation, education that provides educated workers, tax loopholes, and innumerable government resources taken advantage of by the rich, but paid for by all of us.

Property Rights

But.. some say, “No one has the right to come and take my property away from me. It’s not fair. I earned it, and it’s mine to do with as I please.”

Here’s what Nobel Prize-winning economist Joseph Stiglitz says about that in his recent essay in Vanity Fair::

"The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn't seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late."

In other words, there’s a bigger picture… And the property rights argument wears thin when one sees some of our fellow citizens going hungry. Should we voluntarily donate to our strapped food banks? Of course, but that is just one of the many needs we have all around us that charity alone has not solved.

Pareto’s Law

Another way to look at the issue is somewhat scientific and statistical. It turns out that inequality is very common in nature. Rarely is a population homogeneous in all regards. Almost always, some are bigger, some are smaller. This is often described as the “normal distribution,” or bell-shaped curve. In the business world, it’s described as Pareto’s Law, or the “80/20” principle, where 20% of a population typically own or possess 80% of some attribute — for example, wealth or income. Or, say, 20% of the trees in the forest contain 80% of the board-feet of lumber. Or, say, 20% of the items in inventory represent 80% of the total sales.

Looked at in that light, the inequality might be seen not as a moral imperative or special reward, but merely as just the way things happen to be.

President Obama’s April 13, 2011, speech on our values:

President Obama got the debate about raising taxes started in his stirring speech of April 13, 2011:

...Worst of all, [the Republican budget for 2012] is a vision that says even though America can't afford to invest in education or clean energy; even though we can't afford to care for seniors and poor children, we can somehow afford more than $1 trillion in new tax breaks for the wealthy [actually, $2.9 trillion]. Think about it. In the last decade, the average income of the bottom 90% of all working Americans actually declined. The top 1% saw their income rise by an average of more than a quarter of a million dollars each. And that's who needs to pay less taxes? They want to give people like me a two hundred thousand dollar tax cut that's paid for by asking thirty three seniors to each pay six thousand dollars more in health costs? That's not right, and it's not going to happen as long as I'm President.

The fact is, their vision is less about reducing the deficit than it is about changing the basic social compact in America. As Ronald Reagan’s own budget director [David Stockman] said, there’s nothing “serious” or “courageous” about this plan. There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. There’s nothing courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill. And this is not a vision of the America I know….

Here’s an article by the Associated Press that gives an idea about how much is riding on the outcome of this debate.