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36

Don’t the rich deserve to keep most of their money?

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A. McCarthy, M. (2016). Don’t the rich deserve to keep most of their money?. In Sunkara, B. The ABCs of Socialism. Verso, pp. 36-45

40

The socialist view of redistribution within a capitalist society must reject an important premise at play in nearly all tax policy debates: that pre-tax income is something earned solely by individual effort and possessed privately before the state intervenes to take a part of it. Once we break from this libertarian fantasy, it’s easy to see that individual and corporate income is made possible only through tax-financed state action.

—p.40 by Michael A. McCarthy 5 years, 6 months ago

The socialist view of redistribution within a capitalist society must reject an important premise at play in nearly all tax policy debates: that pre-tax income is something earned solely by individual effort and possessed privately before the state intervenes to take a part of it. Once we break from this libertarian fantasy, it’s easy to see that individual and corporate income is made possible only through tax-financed state action.

—p.40 by Michael A. McCarthy 5 years, 6 months ago
42

Of course, hard work, guile, and luck afford some workers the ability to become capitalists. But the basic structure of capitalism, in which a small number own most of the productive assets, guarantees that the vast majority of people will (at best) spend their lives earning wages, but never profits. Taxation provides a partial remedy to that essential, structural inequality of capitalist society.

—p.42 by Michael A. McCarthy 5 years, 6 months ago

Of course, hard work, guile, and luck afford some workers the ability to become capitalists. But the basic structure of capitalism, in which a small number own most of the productive assets, guarantees that the vast majority of people will (at best) spend their lives earning wages, but never profits. Taxation provides a partial remedy to that essential, structural inequality of capitalist society.

—p.42 by Michael A. McCarthy 5 years, 6 months ago
43

In the context of tax policy, however, positive freedom matters as well. Positive freedom is the “ability to”—the capacity to do things, and the possibility of selecting goals and making efforts to realize them. Such freedom requires resources. In capitalist societies with low levels of redistribution, positive freedom is a zero-sum game in which a few enjoy a great deal of such abilities at the expense of many others. Tax policy that divides the social product in such a way that allows some people to live opulent lives while others scrape by cannot be said to promote freedom. The public education system, for example, which offers citizens the opportunity to develop knowledge and skills in pursuit of both collective and individual ambitions, is a bedrock of positive freedom that can only be sustained through taxation.

—p.43 by Michael A. McCarthy 5 years, 6 months ago

In the context of tax policy, however, positive freedom matters as well. Positive freedom is the “ability to”—the capacity to do things, and the possibility of selecting goals and making efforts to realize them. Such freedom requires resources. In capitalist societies with low levels of redistribution, positive freedom is a zero-sum game in which a few enjoy a great deal of such abilities at the expense of many others. Tax policy that divides the social product in such a way that allows some people to live opulent lives while others scrape by cannot be said to promote freedom. The public education system, for example, which offers citizens the opportunity to develop knowledge and skills in pursuit of both collective and individual ambitions, is a bedrock of positive freedom that can only be sustained through taxation.

—p.43 by Michael A. McCarthy 5 years, 6 months ago
44

[...] Even a modest increase in the total tax burden on the top 1 percent of earners to a 45 percent rate, far lower than its postwar levels, would bring in an additional $275 billion in revenue. [...]

the obvious rebuttal to that is that such an increase might spur an increase in tax avoidance/evasion, or would lower the incentive to draw such a high salary. that's not addressed in this article, unfortunately. my response to that: you'd also need better enforcement + closing of tax loopholes, and as for the lower incentive, that might actually be a good thing in a macroeconomic sense, depending on where the money comes from (need to think about that more, esp in a global context)

—p.44 by Michael A. McCarthy 5 years, 6 months ago

[...] Even a modest increase in the total tax burden on the top 1 percent of earners to a 45 percent rate, far lower than its postwar levels, would bring in an additional $275 billion in revenue. [...]

the obvious rebuttal to that is that such an increase might spur an increase in tax avoidance/evasion, or would lower the incentive to draw such a high salary. that's not addressed in this article, unfortunately. my response to that: you'd also need better enforcement + closing of tax loopholes, and as for the lower incentive, that might actually be a good thing in a macroeconomic sense, depending on where the money comes from (need to think about that more, esp in a global context)

—p.44 by Michael A. McCarthy 5 years, 6 months ago