Friday, November 7, 2008

Economic Fairness

Conservatives believe two things:

A) Taxes are bad for the economy.
B) Progressive taxation is unjust.

Liberals take the two opposite views:

A) Taxes are good for the economy.
B) Progressive taxation is just.

What’s interesting about these different stances are that they each make one subjective and one objective (at least more so) claim. Whether progressive taxation is just or not, is based in large part on relatively intangible philosophical principles. Whether taxation is good or bad for the economy is more measurable, although hardly reliably so and fraught with complexities likely too advances for the layperson to appreciate.

Yet in both political perspectives, each view is claimed to bolster the other.

For the conservative, if taxes are bad for the economy because they put a burden on investment, then progressive taxation must be doubly bad for the economy because it is especially burdensome – specifically to those in the best position to be investing, namely business owners. And if progressive taxation is unjust because money is private property and each is entitled to a fair share of his earnings, then taxation’s negative effect on the economy must be doubly unjust because it forces individuals to disproportionately contribute to a newly weakened economy.

For the liberal, if taxes are good for the economy because they act as social investments, then progressive taxation contributes to this investment. And if progressive taxation is just because it rewards citizens more fairly, then taxation’s benefit to the economy will of course improve everyone’s life.

So basically, each set of views are ideologically sympathetic. It is no wonder why they would be comfortably embraced as such. But just because they are sympathetic does not mean that either is contingent on the other, or that because one is true so must be the other.

Maybe taxes are bad for the overall economy, yet it is still just to make them progressive because that is indeed fairer. Or maybe the reverse is true: taxes are good for the economy, yet progressive taxation is unfair by principle.