The Problem With Wealth Redistribution
74
A WHAT-IF SCENARIO
Let's picture a scene -- however real or imagined -- where the government redistributes wealth. Money is taken (or taxed) from the wealthier members of the populace and given to those who don't have quite so much. Let's leave intentions aside -- or better yet, let's assume that those in charge of this redistribution are well-intentioned.
Still, if the government redistributes wealth, then it advances unfairness in the world.
TWO KINDS OF EQUALITY
All people are created equal. But all people are not entitled to material equality. There are two basic kinds of equality at work:
- Equality of Results: This theory argues that because everyone is equal in their humanity, everyone is entitled to similar outcomes in life. Some are born to poverty through no fault of their own, while others, through no merit of their own, are born into great wealth. Equality of results evens things out and makes sure everyone gets a similar piece of the pie. There is no set standard that applies to everyone.
- Equality of Standards: This theory recognizes that everyone is equal in their humanity, but it argues that similar standards, not outcomes, should be applied to everyone. Everyone is equal in the eyes of the law and innocent until proven guilty, for instance. But not everyone will end up proven innocent. Everyone, regardless of background, gets to play shortstop for the Yankees -- if they're good enough at it. Everyone can take a shot at CEO -- whether they succeed or not.
Back to wealth redistribution: taxes are designed to provide for the common welfare, but they cannot attempt to achieve material equality among all people. A progressive tax system does exactly this: it redistributes wealth in an attempt to create material equality. But fairness and private property are the casualities.
FAIRNESS
A tax system that increasingly penalizes people who make increasing amounts of money is fundamentally unfair. This is a progressive tax system, and though well-entrenched in the States, is a form of theft. It denies a set standard for all citizens -- an inequality -- in favor of results-based equality.
That jovial philosopher Kant aptly said, “if [a citizen] does not reach the same level as others, the fault lies either with himself (i.e. lack of ability or serious endeavor) or with circumstances for which he cannot blame others, and not with the irresistible will of any outside party. For as far as right is concerned, his fellow-subjects have no advantage over him.”
Principles of fairness are principles of nature. Nature requires a rational relationship between input and output. To pervert principles of labor and bend them to conform to results-based equality perverts principles of nature: success or failure, in a true sense, depends on work and input, not upon special favors.
PRIVATE PROPERTY
Ownership and private property are at the core of this idea. Richard M. Weaver called private property our “The Last Metaphysical Right.” Provided wealth and property are acquired in direct proportion to one’s work, one has a Right to that wealth. If you don’t work, you don’t eat. But if you do work, you do eat — in direct proportion to how much you work.
A government must tax, but that tax system must honor a worker's right to fair income. Fair based upon his own honest efforts, and not in relation to anyone else. A progressive tax system tramples that right. A progressive tax system claims that, at a certain higher level of work, one’s right to a directly proportionate income no longer exists. “If you work more, you will eat proportionally less.” A difference in percentages applied to different levels of income directly contradicts principles of Right. It mocks fairness. It denies an equal, unchanging standard applied to everyone, and so denies equality.
TOUGH CASES MAKE BAD LAW
What about the hard, sad reality that “distribution of circumstances for those who are extremely wealthy and extremely poor has not been fair"? What about the fact that "the majority of the extremely poor were born in circumstances that significantly contributed to their poverty"?
These are difficult facts of life which we should all do our utmost to solve. But difficulty in one area is not solved by unfairness in another. "Distribution of circumstances” is irrelevant. These are the “circumstances for which he cannot blame others . . .as far as right is concerned, his fellow-subjects have no advantage over him.” The support of income redistribution (via progressive tax methods) is justified only when there is a fundamental injustice on the part of the worker; and being born into a good family or working diligently to earn a high income is not an injustice against anyone.
CommentsLoading...
selected a good topic, nice hub. voted up
Assuming that he has no money?
"I'm all in favour of teaching a man to fish, where should he get his fishing tackle from?"
The store.
Hey Jaydoug: The money is NOT being lent. Most of it has gone overseas and the banks are not lending what they have to the little people.
Nor, in spite of being able to borrow money at no charge themselves, are they refinancing loans. I still have a chattel mortgage at 5.25% and they will NOT redo it!
When the less wealthy spend is money not also distributed through businesses?
And more often through business that will benefit many rather than the rich man whose spend more often only benefits the few.
When the wealthy don't spend they invest their money often in foreign businesses.
I'm all in favour of teaching a man to fish, where should he get his fishing tackle from?
To some who have commented:
When the wealthy spend, money is distributed thru businesses. When the wealthy don't spend, their money is invested by themselves or lent out/invested via banks.
The money is not buried in a box in the backyard or stuck under the mattress.
Please focus on education reform (teach a man to fish) more than wealth redistribution (give a man a fish).
The problem is that under the current ordering it is allmost inevitable that those who have money through no merit of their own will become richer and those who do not will by consequence become poorer (hence the increasing whealth gap in America which is one of the worst in the world). Given this fact the meit based system does not work, the only way it could work would be to ensure as much equality as possible for individuals upon birth.
The thing is, you tax wealthy people but the money doesn't stop moving. Give some money to the poor man and he buys another loaf of bread, who profits from that purchase? It wouldn't be the rich man would it?
The only time money stops moving and stops working is when the rich man who has plenty doesn't need to spend it.
People who have enough money for 100 lifetimes complaining that we want them to give back a few months..
The wealthy are not impoverished by this, otherwise it would not work. You really think millionaires are or will be going hungry over this? The notion of redistribution of wealth is ridiculous, it is not wealth that is being redistributed, it is some money. Noone is getting wealthy off governement hand-outs, my bad, not real people anyhow, only big ole corporations pretending to be individuals. All this conservative stuff looks great idealogically and on paper, but in practice causes suffering. I won't ever feel terrible about taxing wealthy people to pay for social services.
You say that wealth and power (which usually go together) are not wrong. But the wealth all ways comes from somebody else and the power is all ways wielded over someone else!
A good point: if anyone uses wealth and power to rob from others (poor or not), they should be punished. Wealth and power are often abused, it's true; but wealth and power are not themselves wrong.
What about the wealthy who use their wealth and power to take more money from those who have neither?
twaggoner Level 2 Commenter 2 months ago
Interesting hub, but I feel flawed in its logic. It goes without saying that no one has gotten wealth without the work of other people, and it is those people who suffer under the capitalist rationale. While definitions vary of what is fair, I think that it is not too much that everyone afford a life giving them a home, food, health care and the ability to work to support themselves. Progressive taxes mean nothing when you can afford a lobbyist who can give you the tax breaks to be able to pay nothing. “It’s all right to tell a man to lift himself by his own bootstraps, but it is cruel jest to say to a bootless man that he ought to lift himself by his own bootstraps.” -Martin Luther King Jr