I would like to take this discussion in a slightly different direction. As
has been noted and as public choice would predict, the income tax burden is
heavily tilted toward taxpayers above the median. Those below pay about 5%
of all income taxes. I find it striking that there is a ceiling on Social
Security taxes. As many people on this list will know, an individual pays no
Social Security taxes on income in excess of about $75,000. Over the long
term under a system of majority rule, I expect that ceiling will be
eliminated and the incidence of the Social Security tax will mirror the
incidence of the income tax (everyone up to the median voter will pay 0-5%
of all Social Security taxes).
Here's the problem with that. Imagine that equality means not equality of
income but equality of respect. That is, we value equality because at least
in the political sphere it allows us to see one another as equals and to
accord each other an equal respect.(This view is taken from Mickey Kaus's
book The End of Equality who took it from Michael Walzer's Spheres of
Justice). If we adopt some notion of equality like this - and surely such an
idea captures at least part of what everyone means by equality - a wildly
skewed tax incidence is a bad idea. Government becomes a gift extracted from
the those above the median, especially the upper %10, and given to those
below the median. Those below the median get the money, but they become
dependents in the eyes of those above the median, who also come to see
government itself as exploitation. In sum, progressive taxation under
conditions of majority rule makes equality, as I have defined it,
impossible.
John Samples
Cato Institute
