Saturday, February 25, 2012

Yet Another Reason Government Can Never Be Moral

If government were a moral institution, there would be a moral way to fund it. Government establishes and maintains itself by taxes—an agency funded by voluntary donations would not be government—so for it to exist, it needs to tax, and to exist morally it need to tax morally. We would expect, then, that a moral system of taxation would exist, and further that this system would either be described in the Bible or be easily discerned from nature.

Alas for even the best-intentioned statists, such a system is not to be found. Income taxes, import duties, sales taxes, and inheritance taxes all cannot avoid being immoral, and this is true even if we grant the premise that taxation, the extortion of money under threat of greater violence, is moral to begin with.

Let's begin with the flat income tax, probably the most popular form of taxation among conservatives, who think, and rightly so, that it is fairer than the current graduated income tax with its complicated assessment and deduction system. While a flat tax with no deductions would involve less preparation work than today's abomination, and it would not discourage people from advancing into higher tax brackets, it would still not be fair or just. Here's why.

Ben and Mal work at the same job and receive the same hourly wage, and outside of work they like to play with their kids (they each have two) and go to movies. The salient difference is that while Mal works a forty-hour week, Ben works a sixty, all at the same hourly rate. So Ben's yearly earnings are half again what Mal's are. To the degree that income is the measure of richness, Ben is half again as rich as Mal.

If they both spend X percent of their income on food and shelter, and Y percent on their transportation, and put Z precent into savings, that leaves them both with W percent for discretionary spending. On that basis, we can assume that Ben's car, house, diet, and clothes are half again as good as Mal's, and his bank account is half again as large.

This is because neither is penalized by the grocer, the theater owner, or the clothier for their work habits.

When Ben goes to the store, he pays a shekel for a bag of potatoes and another for a bag of tomatoes. When he takes his family to the theater, he pays a shekel per seat. When he buys a shirt, he pays a shekel. Mal also pays a shekel for a bag of potatoes, a bag of tomatoes, a seat at the theater, and a shirt.

But look what happens at tax time: Ben's flat income tax is half again Mal's, though they both pay T percent.

Why is this unjust? They both net their hourly rate minus T percent per hour. Surely that's an improvment over a graduated tax, which would make Ben's hourly earnings less than Mal's if his increased earnings put him into a higher tax bracket. And doesn't the Bible's tax, the tithe, work exactly the same way?

These are valid arguments, but let's take a step back.

Ben has already spent more time at work than Mal. This not only means that Mal has twenty more hours a week to go to movies and play with his kids, it also means that Ben has, assuming both of them are engaged in worthwhile endeavors, already contributed half again as much to the well-being of his neighbors as Mal has. So if you're going to argue that Ben should "contribute more" or "give back" to society simply because he has more money, I would have to ask how much more he needs to give: he has already given half again as much time, as well as the goods or services he has rendered. To make him pay half again as much for his "stay out of jail permit" makes no more sense than charging him half again as much for a shirt. (And, of course, he could always refuse to buy the shirt; he doesn't have the same option with his tax bill.)

As for the tithe principle, God can ask for the tithe because, first, all property is his to begin with: "The earth and everything in it are the Lord's" (Ps 24:1). The tithe is what he requires from his subjects as acknowledgment of his sovereignty: "A tithe of everything from the land, whether grain from the soil or fruit from the trees, belongs to the LORD; it is holy to the LORD" (Lev 27:30).

Unlike government, for which taxes are its lifeblood, God has no need of the tithe: "If I were hungry I would not tell you, for the world is mine, and all that is in it. Do I eat the flesh of bulls or drink the blood of goats?" (Ps 50:12-13). He can claim a "flat tax" because the wealth came from him in the first place. So even a flat tax is an assertion of sovereignty; note the flat tax mentioned in this malediction against the Israelite apotates who preferred godless monarchy to godly anarchy: "[The king you are asking for] will take a tenth of your grain and of your vintage and give it to his officials and attendants. Your menservants and maidservants and the best of your cattle and donkeys he will take for his own use. He will take a tenth of your flocks, and you yourselves will become his slaves. When that day comes, you will cry out for relief from the king you have chosen, and the LORD will not answer you in that day" (1 Sam 8:15-18). They wanted someone other than God to assert sovereignty over them, and the king's tithe would be a symbol that they had gotten their wish.

Unless you also believe that the government is the ultimate source and owner of all wealth, you need something besides the tithe to base your claim on.

So what about per capita taxes and sales taxes?

One of the arguments for a graduated income tax is that per capita taxes are regressive, forcing the Mals of the world to part with a greater percentage of their incomes than the Bens, and the less Mal earns at his job the harder the per capita tax hits him. For that reason I would have to agree that per capita taxes are unfair: they impact the poor more than the rich. That leaves sales taxes and import duties, but as you've probably already realized, both are simply an income tax in disguise, paid by the merchant rather than by the employee, and the same moral problem remains: the more goods and services the merchant provides, the more he is penalized at tax time.

"God's work done God's way will never lack God's support," the old missionary saw goes. If we can trust the Holy Spirit to guide his people, we can say with confidence "The Lord is my helper; I will not be afraid": he will move his people to contribute voluntarily to a community that meets our need for protection from enemies near and far, and that provides for the needy in a just and fair way. We don't need a tax-fed system to "shepherd"—that is, coerce—us.

If you're looking around and thinking that's crazy, there's no way God would take the Christians you can see and build such a community, I would suggest that that's because either there is no Holy Spirit or those you are looking at aren't listening to him. Maybe they're too busy trying to protect, defend, and enlarge an inherently immoral system.

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