What are we, six years old? Taxes should pay for the costs of government. That’s what we have taxes for.
The proper purpose of taxes is not to establish a condition of “fairness.” It’s to pay for government: a legislature, executive, military, police, firefighting, courts, schools. But for 100 years now, the percentage-based income tax has been shifting public dialogue on taxes steadily away from their proper purpose, and toward increasingly juvenile arguments over “fairness,” as if the tax code is like Mom, telling Makayla to share the toys and be patient because Brendan is little.
If we let taxation be about “fairness,” rather than paying for the cost of government, the two big problems we have are defining “fairness,” and defining the role of government in promoting it. Those questions will never be settled to the satisfaction of all.
It might seem that the first question – “what is fair?” – is the more contentious one. We discuss it incessantly, after all. But the more fundamental question is actually what government should be doing about fairness. The freighted nature of our discussions about fairness is largely relieved if we assign a limited, utilitarian role to government. It doesn’t much matter what other people think is “fair,” in a lengthy list of situations, if they can’t harness the power of the armed state to enforce it on their fellow men.
Thus, I reject the whole idea that government needs to keep an eye on the citizens’ incomes, and worry about “fairness” as if the numbers are a meaningful indicator of it. For much of American history, no government at any level actually knew how much income individual citizens had. That was not a problem. It didn’t need correction. We could do away with virtually our entire tax code, if we did away with the modern idea that government needs to know what our incomes are.
We would also do away with the various ugly arguments that pit citizen against citizen in a do-loop of unrequitable resentments. No, childless people shouldn’t have to pay proportionally more in taxes than people with children do. No, married people with two incomes should not have to pay a “marriage penalty” in their tax bill. Neither demographic is battening on the other with its life choices. But however we feel about that issue, we could avoid the argument altogether, if the tax code didn’t creep around after us inquiring into our incomes and household arrangements.
Obviously, we should all obey the law as it exists today; the point here is that we once handled these issues in a way less susceptible to demagoguery, government interventionism, and social conflict – and we could do so again. The way to discuss the tax code is not in terms of “fairness,” as if the government should be charged with using taxation to establish conditions according to a “fairness” index, but in terms of what needs paying for and how we’re going to collect revenue for that purpose.
In our pre-16th Amendment days, the federal government collected taxes on imports, liquor, and cigarettes. It also collected, and continues to collect, fees for various kinds of concessions, such as mining, drilling for oil and gas, cutting timber, fishing, and so forth. State and local governments collected taxes primarily on real property. With the automation of market transactions, sales taxes have become a widespread method of collecting revenue for state and local governments.
These methods of tax collection can be pursued without knowing what anyone’s income is or what his household arrangements are. The first question about government knowing these things is why it needs to at all. Taxes can be collected in different ways; it is not as though government can only tax us effectively if it knows all our financial, family, and household business. Many things that are crimes today are crimes only because government now insists on having this information about us.
I consider it a very low-payoff proposition for conservatives to continue to debate tax “fairness” as if we are in a closed-loop system with our tax code, and no alternative is imaginable. The mechanism of automated payroll withholding has made percentage-based income taxation convenient, but not more so than automated sales taxes, or property taxes escrowed with mortgage payments. There are alternatives.
The real question is whether our citizenry has the maturity and largeness of mind to accept the idea of government that is not chartered to be our Mom, knowing all our business and ordering us to share the toys. Such a government would have, for starters, a lot less to do. It would cost us less, and be less exploitable by demagogues and special interests. That would be OK with me – I can go the rest of my life without knowing what Bill Gates’ income is, or Warren Buffett’s, or Warren Buffett’s secretary’s.