Tuesday, November 04, 2014

Is There a Moral Duty to Cut Taxes?

So claims David Cameron (ungated version here):
It is morally right that the rich pay their fair share in tax; and right that those who are able to contribute to our public services and safety nets do so.
But what is morally wrong is government spending money as if it grows on trees. Every single pound of public money started as private earning. Every million in the Treasury represents a huge amount of hard work: early morning alarms, long commutes, hours spent on the factory floor, the office, the hospital ward or the classroom. [...]
No one should doubt my position: with every spending commitment we must be mindful of who picks up the bill. It's easy for governments to trumpet what they spend money on - and claim a moral victory for it - but on the other side of the coin are those who work hard, many on low incomes, who would desperately like to spend more money on their family. The government has a moral duty to think of these people in any decisions made on tax and spending.

Cameron is surely right that governments should not waste money (e.g. fighting harmful and unnecessary wars).  I'm also sympathetic to the thought that individual citizens -- especially those with low incomes -- will often be able to make better use of money than the government does. But this is no reason for tax breaks that disproportionately benefit the wealthy.  A better option would be to disburse the wealth as an unconditional basic income or fixed lump sum payment to each citizen.


It's a common mistake to think that people "deserve" their pre-tax income in some strong sense that renders redistributive taxation illegitimate.  But there is no good reason to think this.  Income in a capitalist society reflects all sorts of arbitrary factors in supply and demand that bear no relation to moral desert. Does anyone really think that a wealthy pop star is harder-working and more deserving than a struggling single mother holding down multiple jobs?  People are not paid for how hard they work, nor even for the value of their work in any real (i.e. moral, rather than financial) sense.  Some people are lucky enough to have talents of the sort that are financially rewarded in our society, while other people -- who may be equally talented but in a less lucrative domain -- struggle to get by.  Some people do extremely demanding and important work (e.g. care work for their children or elderly relatives) outside of the market system and so do not get paid at all for these efforts.

The government does have a moral duty to think of all their hard-working citizens, many of whom would desperately like to spend more money on their families.  The government does not do a particularly good job of discharging this moral duty when it makes decisions that disproportionately reward those lucky few who already possess immense wealth due to morally arbitrary factors.  Given the vast and undeserved inequalities found in modern society, cutting taxes is not enough.  We should be redistributing wealth from the more fortunate to the less so, to compensate for the moral vagaries of our (efficient but not remotely desert-tracking) capitalist economy.

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