The Nation's Pulse

Leveling Justice: Tax Code as Moral Code

New insights into income inequality and the redistribution of wealth as a purported remedy.

By 3.2.11

Send to Kindle

A recent episode of the PBS program Religion & Ethics Newsweekly addressed the issue of income inequality. Predictably, the conversation centered on the question of whether redistribution of wealth is a suitable way to remedy the purported problem.

Harvard professor Michael Sandel (who teaches a famous course on justice) suggested that redistribution is warranted because lots of different kinds of people work hard, but achieve vastly different results in terms of income. Why should a school bus driver work hard and make a low income, while a high level business manager works hard and makes a much higher income? Now, perhaps Dr. Sandel was limited by the constraints of television, but this framework for evaluating income inequality seems unsatisfying.

If effort is the key indicator, then why not give a superior claim to a man who sets a most arduous task for himself in the form of tearing down and rebuilding his house? Of course, it seems silly to reward him because his work doesn’t achieve anything. So, effort is not the key point. How about useful effort? A line operator in a factory might contribute something to thousands of pieces of work each day, but the engineer who designed the process made a far larger contribution because he enabled the entire production run. Even though it is true that we can distinguish levels of work as hard or easy, there are other things that matter, too. Effectiveness and impact come into play.

The Federalist Papers recognized that even if we could arrest the economic progress of all citizens and pull them back to the starting line, it would only be a matter of time before differences in motivation, virtue, practice, creativity, preparation, delayed gratification, and any number of other factors would lead to some substantially outpacing others. In Common Sense, Tom Paine identified the difference between rich and poor as one that could be accounted for with justice while royal status could not. Does this mean that the rich always deserve to be rich and the poor always deserve their relative lack of wealth? No, but very often it is possible to explain why some people’s efforts warrant their large incomes in a way that others’ efforts do not.

Sandel went on to single out the estate tax as a way to remedy the unfair head start given to some citizens that allows them to enjoy more wealth than others. This view of what is fair and unfair echoes the one we just examined. It pays little attention to the question of what is a just cause and/or effect. If, for example, a woman rises from no great circumstance to become a medical doctor with a surgical practice, the income she earns is well-justified. She has to cultivate her mind through education, train extensively, experience substantial delayed gratification financially, endure long hours, give up family time, tolerate a very high level of technical risk and difficulty in her work, and be prepared to drop anything at inconvenient hours to meet a crisis. At the same time, the results (or the effects) or her work can be truly life-changing for patients. How can it be unjust for this woman to want her hard-earned capital to benefit her child? Should a very wise person be prevented from passing on life lessons to his child? Should a very healthy or beautiful person be forbidden to pass on outstanding genes? Why should money be different? Does Sandel’s notion of leveling out advantages through the estate tax actually result in more justice than allowing the natural effect of a lifetime of highly skilled and technically difficult work to take place?

Also in the episode, University of Alabama law professor and progressive tax crusader Susan Pace Hamill argued that Alabama’s low property taxes, high sales taxes (applying even to food), and income tax that applies even to low levels of income constitute a sub-Biblical ethic of revenue collection. Her reasoning is that the highest taxes apply to consumption, while the taxes that target wealth, like the property tax, are relatively low. Her proposal is that the tax system be made more progressive and the greater revenues (if realized) would go to finance public efforts like the educational system to improve equality of opportunity.

Hamill’s method of applying a Biblical ethic to taxation is highly laudable in that it avoids the pietistic impulse that individualizes Bible teaching to the point of social irrelevance. In addition, one can see how Hamill was able to move Alabama’s Reaganite governor, Bob Riley, to support her efforts to change the system. Conservatives have long focused on achieving equality of opportunity rather than equality of results. To the extent Hamill’s proposal does that, it is morally and rationally superior to Sandel’s case for redistribution. But the question remains whether progressivity of taxation (especially in the form of rising marginal tax rates) achieves justice.

Hadley Arkes, author of First Things (the book, not the magazine), approached the issue in the following way. We are all free agents responsible for our own actions. If one man injures another man, the responsibility is clear and the one who did wrong must pay. If a man is injured because of his own mistake in judgment or because of recklessness, he should bear the cost of his own error. But if a man is injured in an accident that is no one’s fault, then the community should seek to help him. And how might we help this man? Should we simply find a rich man, grab him by the collar and demand he pay for medical care and income supplements? Not according to Arkes, because there is no rich man who bears the blame for the injury. No, if we wish to come to the aid of the injured man, then we should take on the burden in a proportionate way, as a community. If one percent from each person is needed to help make him whole, then we will all pay one percent each. On that basis, the rich man will still pay far more than a poor one, but the same rule will have applied to each man. And is that not the very definition of justice?

This commentary was written for the Acton Institute and first appeared on its website.

Like this Article

Print this Article

Print Article
About the Author

Hunter Baker is associate dean of arts and sciences and associate professor of political science at Union University. He is the author of The End of Secularism and winner of the 2011 Michael Novak Award. His personal website is www.hunterbaker.wordpress.com.