http://clivecrook.theatlantic.com/archives/2007/11/opportunity_and_equality.php

This general argument is the ethical basis for taxation. If we didn’t gain anything from society, then taxation would simply be stealing. I’m arguing that it is not: it is a reasonable demand for a partial return.

So, given that taxation is OK, we can decide who should pay taxes, and how much. I don’t see the circularity in saying that it is OK–not required, but OK–to ask people who gained more to pay more.

But you cannot base it upon a notion that it is because of “gains they have gotten from society” that people deserve to pay. Those earning most are almost certainly the least “drain” upon the resources (especially, entitlement moneys). If the “gains” are to include all sorts of indirect effects that amount to “the totality of income”, then you have a circular argument: you want progressive taxation because you want those who earn more to pay a higher fraction.

The traditional mechanism for raising the required money is taxes. The U.S. has traditionally chosen to use a progressive tax system, though in the past it was far more progressive than it is today. Taxation is ethically supportable because we all benefit enormously from living in society. As you observe, this applies to everybody, rich and poor alike.

So it’s not a matter of “taxable guilt.” Unless we make radical changes to society, we need taxation. And I personally don’t see anything wrong with progressive taxation. Given that, I see nothing wrong with observing that at present many very wealthy people actually pay tax at a lower rate than most non-wealthy people–that is, the current tax system is not progressive. So I see nothing wrong with making it more progressive.

Ian said:
> When I mention raising taxes I don’t mean to “soak the rich.” I mean to adjust their payment to a
> level which reflects the gains they have gotten from society.

If the concept of “gains they have gotten society” as a source of taxable guilt is to have any logic to it, it would apply to underpaid peons as well — and to the limit of 100% to those collecting welfare.

We would all like jump from one income hump to the next by tripling our salary. What most find instead is incremental changes with a ceiling somewhere around $100K, and a distinct population collecting income from $300K and up.

That is, some kinds of jobs pay the same salary they did 30 years ago. Other kinds of jobs pay much much more. To show that income mobility has gone down, you need to show that people can not move between the two sorts of jobs. That could be true, but it is not necessarily true.

It has always been the case that people who make a lot of money pay more into social security than they receive. And it has always been the case that people who pay the minimum into social security, and who live a long time, receive more than they paid in. The effective rate of return for wealthy individuals has always been less than zero.

FDR created the social security system with individual payments so that everybody would feel invested in the system–if it were ever cancelled, people would want their money back. He explicitly said that this was a hook to make it very difficult to ever repeal the system. Without the individual payments into the system–if social security payments came out of general tax revenues–it would be much easier for later governments to cancel the program. FDR wanted to make it hard to cancel. So don’t let the payments confuse into thinking that social security is some sort of retirement savings account; it isn’t.