The Trillionaire and Taxes

I’ve written before about the ethics of economic inequality and the philosophy of prioritarianism which emphasizes that humans should prioritize the worse off individuals in our society. Lately I’ve received some push back from some conservative and right-wing libertarian friends on how this would be achieved. I’ll answer those concerns here.

Conservatives and right-wing libertarians often view taxation as theft. To them, raising taxes simply translates to stealing more. I’m well aware of both the ethical and economic concerns about taxation, and I agree that at its core (fruits of your labor) taxation is a type of theft. However, I believe taxation to be necessary, given how irrational and selfish people are.

One of the easiest ways to demonstrate this is through a simple thought experiment: Imagine living in a country with a trillionaire (yes, this is actually plausible in the near future) while, at the same time, 40% of the country is living in extreme poverty. This trillionaire has no obligation to do anything with their money. After all, they earned it and they can do with it how they please. Could any sane person argue against taxation in order to achieve wealth redistribution in this situation?

First off, millions of peoples well-being are now reliant on whether this trillionaire is both compassionate and not ignorant of the extreme poverty. The amount of power and coercion this type of person would have should make any libertarian shiver. Wealth redistribution would not only be morally superior, but necessary to keep society from plummeting into chaos and crime.

Secondly is the problem with the claim that someone could possibly earn a trillion dollars. To me, this really just demonstrates a pure lack of insight of the human condition, capitalism and ability to think rationally about value. Indeed, it is this assumption that capitalists are “self-made” that lends itself to the idea that taxation is theft in the first place.  I encourage reading Free Will by Sam Harris to truly recognize how little we control about our lives.

Lastly, I believe it could easily be argued that wealth redistribution is in the self interest of the trillionaire. A strong social safety net provides the foundation for people to get an education, develop specialized skills, and ultimately become a productive member of society. To the trillionaire, this provides a plethora of new opportunities in which they can invest and innovate.

With all of that said, I do understand why many are hesitant in raising taxes. Given the extraordinary amount of money our government wastes on the War on Drugs and Healthcare reform, I too would like to see the government programs made more efficient and with a greater focus on poverty prevention. As we move forward, however, we must recognize that wealth redistribution is a fundamental need in keeping a healthy, moral and free capitalistic society.

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