THE DEBATES over President Bush's tax plan have centered on the role that it will have in stopping an impending recession that many economists are predicting on the horizon. Basic long-term economic theory suggests a tax cut will increase consumer spending, and in turn bolster the economy. However, economists disagree on the tax plan because of the myriad of factors that are involved. The issue further is complicated by the public's belief in the state of the economy, the causal relationship between fiscal and monetary policy, and the weighted benefit of long-term versus short-term economic goals.
But these debates obscure the important questions. In evaluating our taxes, we need to ask more fundamental questions than those related to the economy and expediency.
While we definitely are economic beings, we are moral, social and political beings as well. Even if economists could reach a consensus on the exact economic effects of President Bush's tax plan, they could not tell if the tax plan is right or wrong in a moral sense. Taxes bring up basic political questions: Should the government be larger? Should the government be smaller? Should certain citizens pay more taxes? If so, which ones? The wealthy? The poor? And who decides?
These questions often are overlooked for the more immediate questions that many economists are prone to ask. Instead of pondering why wealthy Americans should shoulder a larger burden of the government's budget, we should ask what effect a tax break for the wealthy will have on our own economic well being.
Citizens avoid the ethical questions behind the principle of progressive taxation by relying on the seemingly almighty force of the status quo. Once progressive taxation became a fixture of our political system, most citizens unfortunately ceased to question its ethical implications.
While making such a move is expedient and in the economic interest of the majority, it deprives citizens of a more meaningful political existence. Each generation should evaluate the political principles enacted by its ancestors and debate the fundamental political questions involved. Political discourse should cover more than just expediency and economics.
Members of the public should ask why they think it is fair that a wealthy citizen pays approximately 39.6 percent of his income to the government, while a middle class citizen pays only 28 percent. Asking this question would show many reasons why progressive taxation is unjust.
As a category, the upper class and the middle class receive the same benefits from the government, although an individual citizen receives exactly the same benefits. Some citizens receive welfare checks, some receive Medicare, some receive an education for their children and some citizens receive "corporate welfare." But as a category, the wealthy do not receive any different services from the government than the middle class receive. So the reason for their paying for more of the budget cannot be based on a principle of fair exchange.
Many individuals have made their wealth entirely by their own efforts. These people often are overlooked. However, even if one believes wealthy citizens are only well off because they were born into wealth, this is not a reason for the wealthy to have higher income taxes. It is a reason for higher estate and inheritance taxes. If one seeks equal material opportunity in society, one should seek to cut down inheritances and to equalize the quality of primary and secondary education in our schools. Placing a higher income tax on the wealthy penalizes both those who benefited from a wealthy upbringing and those who did not. It does little to start the next generation on equal economic ground.
A wealthy citizen deserves the fruits of his labor - as does every human being. The fact that an individual earned large amounts of money does not give the majority the right to forcibly seize that money.
Under this logic, it would be perfectly justifiable if all the countries in the world decided to form a world government and then levy astronomical taxes on countries whose Gross National Products were above a certain level. If America were to protest, the majority of countries simply could ignore America's complaints and insist on the principle of majority rules.
While a progressive tax is expedient and economically beneficial to the majority, it is not clear that it is a just policy. The ethical questions must be considered before taking a position on progressive taxes.
(Kelly Sarabyn's column appears Wednesdays in The Cavalier Daily.)
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