Monday, January 18, 2016

Redistribution to make society stronger

This is Joseph

I occasionally hear the argument that taxes are a form of theft.  When this is a form of looting to make the lives of the political class more opulent, then this is a cogent objection.  However, taxes can be used for two other things: redistribution and the provision of common goods. 

Paul Krugman takes on the moral argument against redistribution:
Don’t say that redistribution is inherently wrong. Even if high incomes perfectly reflected productivity, market outcomes aren’t the same as moral justification. And given the reality that wealth often reflects either luck or power, there’s a strong case to be made for collecting some of that wealth in taxes and using it to make society as a whole stronger, as long as it doesn’t destroy the incentive to keep creating more wealth.
And there’s no reason to believe that it would. Historically, America achieved its most rapid growth and technological progress ever during the 1950s and 1960s, despite much higher top tax rates and much lower inequality than it has today.
Of course, this requires government to act as a moral agent.  But I do not think that it is unreasonable to try and hold government to this expectation.  Just because government accountability is a hard problem doesn't mean that it isn't a worthwhile problem to solve.   

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