The Moral Justification for Progressive Taxation

The director of the Congressional Budget Office recently wrote a blog post about the fundamental disconnect between the American people's desire for government services - specifically entitlements - and their desire for low taxes.

I think the equations on this issue are pretty simple.

First, you have entitlement spending as a moral issue. Do people deserve these basic service guarantees?

Second, you have the efficacy of government spending. Is the government the most efficient delivery system for these services?

Third, is our economic system inherently fair? Did the winners and losers deserve their fate?

Fourth, what role does taxation play in growth? Do higher tax rates inhibit investment?

Fifth, do people really deserve their wealth? Is it justified to progressively tax higher earners?

For decades the right has railed against taxation with assumptions on all five counts: People don't deserve these guarantees; the government is wasteful and inefficient; our economic system is a meritocracy; Supply-side principles say high tax rates slow the economy; progressive taxation is immoral because it unfairly redistributes legitimately earned income.

Yet all of these assumptions hinge on a simple question: how fair is our economy - do all people have equal access to the means of success? If they do, then they should be responsible for their own fate. Neither the government nor the people have any responsibility to them. Therefore, guaranteed access to services is not necessary and they can be provided more efficiently and better by private markets. Whether or not supply-side theory is correct is really irrelevant - taxation is in principle unfair and inefficient anyway. One's income is one's own and should not be subject to redistribution.

Yet during these same decades more and more data has been collected that disproves the assumption that our economy is fair, and provides equal opportunity for all - something liberals have always known intuitively. Research in many fields has unraveled the complexities of human behavior and uncovered overwhelming evidence with only one conclusion: one's success in life is solely determined by the genes they were born with and the environment that activated them throughout their life.

Starting in the womb, human development progresses according to its environmental stimulus. This includes everything from what social scientists call "human capital" (an individual's cognitive development according to levels of lead exposure, parental linguistic feedback, peer group interaction), to what social scientists call "social capital" (an individual's exposure to the cultural information and procedures necessary for success). Any theory is only as good as its predictions. And this theory of human development and social interaction has been confirmed repeatedly.

A simple thought experiment gives you an idea of what to expect: take two embryos and place one in the belly of a happy white mother from a wealthy, educated, functional family in Connecticut. Place the other in a 17 year old black girl in Detroit who is 4 grade levels behind with anger issues, her father incarcerated, her mother addicted to methamphetamines , her home with high levels of lead and pests, etc. - you get the idea.

The obvious predicted outcomes for each child are intuitively quite different. One child would seem to have quite an advantage over the other. But what researchers have done is isolated specific factors that can be applied to each situation with powerfully predictive results. Zooming out to the macro level - looking at populations in the tens of thousands, this application of data analysis gives us a clear understanding of what it takes to be successful.

The most common reaction to all of this from the right is to dismiss it, with an appeal to free will. They will point to one or another example of a man who has "risen to the top" despite all all odds. Coming from truly wretched circumstances, he has faced down adversity and by sheer pluck and determination achieved success. If he could do it, goes the argument, then anyone could. They just have to "choose" it.

This narrative is appealing. America is full of stories such as these. Its very founding was in a sense an expression of this sensibility - the power of the human spirit to overcome adversity - writ large. And it seems reasonable: we have set up a society that encourages the freedom to achieve greatness through individual effort. It would seem that all one has to do is work hard, make the right choices and success is easily within reach.

But this story is deceptively simple. It overlooks some basic realities of human development. For starters, "the exception does not prove the rule". These individual examples indeed seem heroic. But this is precisely because we all understand intuitively that these men were outliers. The fact that we see them as exceptional is based on the reality that most in their circumstance do not fare the same. Statistical demographic data bears this out. The children of poor Detroit do not succeed at the same rate as the children of wealthy Connecticut. What must it be then about the poor children of Detroit that makes them "choose" to be unsuccessful? And what then allows the children of wealthy Connecticut NOT to choose to be unsuccessful.

Well, we know why. In fact, we know exactly why. And it has nothing to do with "choice". If a child born to poor Detroit had access to sufficient human and social capital, the likelihood of his success would be virtually guaranteed. He would make the right "choice" every time. And if the child of wealthy Connecticut only had access to low levels of human and social capital, his likelihood for success would be rather dismal.

This can all be backed up by data. Countless devoted people all over the country are working tirelessly on finding ways to close this gap. How it will be done is a difficult proposition. There are no easy answers. But one thing is clear: all people do not have equal access to the means of success; all people do not have access to the means of freedom to self-actualize. Accordingly, it is then our job as compassionate and rational, civilized citizens to do whatever it takes to achieve this. It is our constitutional obligation.

The only way to guarantee equal access to human and social capital is through government services. Charity or private industry might fill in the gaps here and there. But if we are to truly offer equal access to every citizen, government is the only entity with the means to do so. This of course requires funding, and thus taxation. As we have already established, success is dependent on genetic and social circumstance. Earned income is dependent on success. Therefore, earned income is dependent on genetic and social circumstance. It is perfectly moral then to enact a system of progressive taxation. In fact, it would be immoral not to do so.