What are we, six years old? Taxes should pay for the costs of government. That’s what we have taxes for.
The proper purpose of taxes is not to establish a condition of “fairness.” It’s to pay for government: a legislature, executive, military, police, firefighting, courts, schools. But for 100 years now, the percentage-based income tax has been shifting public dialogue on taxes steadily away from their proper purpose, and toward increasingly juvenile arguments over “fairness,” as if the tax code is like Mom, telling Makayla to share the toys and be patient because Brendan is little.
If we let taxation be about “fairness,” rather than paying for the cost of government, the two big problems we have are defining “fairness,” and defining the role of government in promoting it. Those questions will never be settled to the satisfaction of all.
It might seem that the first question – “what is fair?” – is the more contentious one. We discuss it incessantly, after all. But the more fundamental question is actually what government should be doing about fairness. The freighted nature of our discussions about fairness is largely relieved if we assign a limited, utilitarian role to government. It doesn’t much matter what other people think is “fair,” in a lengthy list of situations, if they can’t harness the power of the armed state to enforce it on their fellow men.
Thus, I reject the whole idea that government needs to keep an eye on the citizens’ incomes, and worry about “fairness” as if the numbers are a meaningful indicator of it. For much of American history, no government at any level actually knew how much income individual citizens had. That was not a problem. It didn’t need correction. We could do away with virtually our entire tax code, if we did away with the modern idea that government needs to know what our incomes are.
We would also do away with the various ugly arguments that pit citizen against citizen in a do-loop of unrequitable resentments. No, childless people shouldn’t have to pay proportionally more in taxes than people with children do. No, married people with two incomes should not have to pay a “marriage penalty” in their tax bill. Neither demographic is battening on the other with its life choices. But however we feel about that issue, we could avoid the argument altogether, if the tax code didn’t creep around after us inquiring into our incomes and household arrangements.
Obviously, we should all obey the law as it exists today; the point here is that we once handled these issues in a way less susceptible to demagoguery, government interventionism, and social conflict – and we could do so again. The way to discuss the tax code is not in terms of “fairness,” as if the government should be charged with using taxation to establish conditions according to a “fairness” index, but in terms of what needs paying for and how we’re going to collect revenue for that purpose.
In our pre-16th Amendment days, the federal government collected taxes on imports, liquor, and cigarettes. It also collected, and continues to collect, fees for various kinds of concessions, such as mining, drilling for oil and gas, cutting timber, fishing, and so forth. State and local governments collected taxes primarily on real property. With the automation of market transactions, sales taxes have become a widespread method of collecting revenue for state and local governments.
These methods of tax collection can be pursued without knowing what anyone’s income is or what his household arrangements are. The first question about government knowing these things is why it needs to at all. Taxes can be collected in different ways; it is not as though government can only tax us effectively if it knows all our financial, family, and household business. Many things that are crimes today are crimes only because government now insists on having this information about us.
I consider it a very low-payoff proposition for conservatives to continue to debate tax “fairness” as if we are in a closed-loop system with our tax code, and no alternative is imaginable. The mechanism of automated payroll withholding has made percentage-based income taxation convenient, but not more so than automated sales taxes, or property taxes escrowed with mortgage payments. There are alternatives.
The real question is whether our citizenry has the maturity and largeness of mind to accept the idea of government that is not chartered to be our Mom, knowing all our business and ordering us to share the toys. Such a government would have, for starters, a lot less to do. It would cost us less, and be less exploitable by demagogues and special interests. That would be OK with me – I can go the rest of my life without knowing what Bill Gates’ income is, or Warren Buffett’s, or Warren Buffett’s secretary’s.
J.E. Dyer’s articles have appeared at Hot Air’s Green Room, Commentary’s “contentions,” Patheos, and The Weekly Standard online.
The Optimistic Conservative 
What is fair? is not a complicated question. You need to pay more than I, both as an absolute quantity and as a percentage. I’m surprised you had trouble with this concept.
At the risk of sounding like a liberal, if you are going to have taxes of any kind, you cannot completely avoid the fairness debate. Is it fairer to tax citizens’ current income (which most folks use to get by day-to-day), their current purchases or other economic actifity (which increases the cost of barely getting by as well as living high on the hog), or to tax inheritance (which people probably are not relying on for subsistence)? If you get taxes only from imports, which imports, benefitting which consituencies, will be taxed and how much? What fees should be charged for extracting what minerals on federal land?
Granted, smaller government is the best cure (well, maybe remediation, not cure) for a government that tries to play favorites with “fairness.” Free enterprise should be played as near as possible on a level pitch. Have you noticed that people who attack the greed of capitalism are generally supportive of greed at the ballot box, whereby voters try to install politicians who will confer subsidies, privileges, handouts, welfare and protectionism for them and impose taxes, penalties, regulations, restrictions and burdens on everyone else?
One other thing. People order their lives based on the tax code. That has been the intention of government in the first place. To then pull the rug out from under people may not be “fair.” (In capitalism this would be called fraud.) An example is the reliance people have placed on the mortgage interest deduction, Thirty year commitments are made with the current tax code in mind. Now, maybe people are foolish to rely on our tax structure staying the same for more than a couple of years, but historically, it has been (as you note) quite persistent. There is a real benefit from certainty in our tax code. One of the drags on the current economy is that businesses cannot predict their future tax burdens with any degree of confidence.
Amen, J.E.
Why is “fairness” somehow related to money? I’m a boring, unattractive individual that has a difficult time connecting with the opposite sex. That’s not fair. Why ain’t there a government program to hook me up with someone? I’m not very tall, either. Everybody knows that taller folks get farther in life so us vertically challenged need some fairness, too. Guys that don’t get bald on time are envied and hated by their peers, how about some fairness?
This is a makey-up issue like much of the rest of the Republican platform. The President was clearly referring to fairness in relation to paying for the cost of running the nation. In other words, that our tax contributions should be proportionate to means to pay. As we can see from Lord Romneycare of Zurich and Grand Caiman’s belatedly revealed tax-returns, under the present regime this just ain’t the case. The President was not suggesting that the tax-system should be used to impose anyone’s idea of fairness in the context of entitlement. The President particularly noted that under the present set-up the middle-classes bear a disproportionate burden in contributing to the cost of running the country (One of the more interesting things that emerged from the debate is that the Republicans don’t consider people on $250K well off. Goes to show just how in touch they are with ordinary folk in a nation where the average income is just over $30K!)
The size of government is an entirely different issue to taxation fairness. There are obvious differences between mainstream Americans and the Tea Party radicals on this issue.