Wednesday, November 12, 2008

 

Progressive Taxation

Ending the Curse of Tax Socialism

I recently came across this article from James Dorn of the Cato Institute. The essential position he has taken on ending tax socialism is an outstanding clarification of the tax trap we are currently in, and will undoubtedly be far further into in the near term. I include the beginning and ending here, but the entire piece is worth the effort to read:

James A. Dorn is vice president for academic affairs at the Cato Institute.

This article appeared on cato.org on September 13, 1996. Read it here!

"It's time to expose the pretense of morality that is inherent in progressive taxation and to end the system of tax socialism that has eroded economic and personal liberties in the United States. Progressive income taxation should be abolished and replaced with a flat-rate tax on income or consumption -- not just to enhance efficiency but to protect our rights to life, liberty and property.

In 1848 Marx and Engels proposed that progressive taxation be used "to wrest, by degrees, all capital from the bourgeois, to centralize all instruments of production in the hands of the state." Although communism has failed, the idea of progressive taxation, as a means of achieving "social justice," remains ingrained in the modern liberal psyche.

(…)

If we let constitutional principles be eroded by majority rule, in the name of social justice, then both freedom and true justice will be lost. Progressive taxation is not a virtue but a vice. It presumes that the property rights of the wealthy are not as sacred as the property rights of the poor and that the values of the majority are superior to the rights of the minority.

Those who support progressive taxation pretend to be on the moral high ground but, in fact, they have no ground to stand on. Envy, not justice, is at the root of the argument for discriminatory taxation. That is why those who most strongly advocate progressive taxation are in favor of the welfare state. "Law is the bond of civil society, and justice is equality under the law," wrote Cicero. If we are to restore civil society and move from tax socialism to tax justice, we need to abolish progressive taxation, institute a fair flat tax and limit the size of government. Otherwise, class warfare and welfare will prevail."

This position on our current tax system and the need for change to a flat tax I can heartily endorse.

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