I recently had a discussion with one of my “moderate” friends about the nature of the federal income tax system. He expressed the commonly held sentiment that those who make more money should pay a higher percentage of their income to the government simply because they can afford to, and that they somehow have a moral obligation to do so. Setting aside the fact that such a policy creates a society of freeloaders who feed off the productive, I pointed out to him that a progressive income tax relies on income discrimination, and arbitrarily grouping people into income classes.
It is odd that almost sixty years after the onset of the Civil Rights Movement, after a plethora of court cases and statutes outlawing discrimination based on attributes like race, color, ethnicity, religion, and gender, we still have widespread discrimination in this country, practiced by the federal government itself, with regard to a policy that affects all working men and women. If those other forms of discrimination are so lamentable, and I believe they are, why should we continue to allow equally insidious discrimination in our tax policy? My friend pointed out that those other attributes are not matters of choice because, for example, one cannot change their race or ethnicity, while level of income is a matter of choice. I think he’s one-hundred percent correct, but it creates a couple of problems for his overarching argument.
If it is the case that there is significant income mobility in the economy (i.e., income is a matter of choice), then people have the power to either increase or decrease their income at will. But one of the main points in favor of a progressive income tax is that there is a lack of income mobility in the economy to the extent that income must be redistributed in order to compensate for what people are unable to earn by working. Therefore, if level of income is a choice, then there is no need for a progressive income tax in the first place. However, if it is not a choice–a concept I reject–then according to my moderate friend, that is even more reason why it should not be subject to discrimination. Either way, a progressive income tax is unjustifiable.
The concept of income as a choice also leads to a more traditional argument against the progressive income tax. If you arbitrarily tax the “rich” at a higher rate than the “poor,” then the rich will choose to work less than they normally would because their work would no longer be worth the amount of money they got to keep after taxes. As a result, they will not aspire to high-earning jobs, and their new work will be less meaningful and useful. In effect, you will see a decrease in productivity within the economy. And when that happens, where does that leave the poor who benefit from the progressive income tax’ redistribution of income?
No matter who you are or how you look at it–whether you work or don’t work, or whether you consider yourself rich or poor–taxation is a civil rights issue. It’s time we as a country started to treat it like one. Now is the time to end discrimination in our income tax policy, oust the progressive income tax, and replace it with a system that treats all earners and producers equally.