The Tyranny of “Fairness” in the Tax Code

The President and other politicians often invoke the idea of “fairness” when advocating for a public policy. There are a couple reasons for why politicians do so when speaking publicly. First, there is a positive connotation associated with the word. If you can make people assume that your policy is “fair”, then it is much harder to argue against. Secondly, there is a very subjective quality to the word. It can be very difficult to measure exactly what is “fair” because people have different standards for determining what “fair” is. This makes any debate on the issue a matter of opinion and not reality.

Tax policy is the perfect example where the idea of “fairness” is used. Politicians appeal to some undefined standard of “fairness” while giving their own opinions about who should pay taxes and how much. The President, and others on the left, claim that the rich need to pay their “fair share” of taxes, but nailing down who should pay what has been a difficult proposition. The “fiscal cliff” negotiations hinged on that very determination. The left wanted to increase taxes on those making over $250,000 and the right didn’t want to tax anyone more. Then the right countered with those making over $1 million. They finally settled on taking more of the income from those making over $400,000. The whole process was painful and above all highly arbitrary. That threshold was based solely on the collision of partisan ideologies. More importantly, the whole tax code is arbitrary because of the inequality with which income taxes are levied against us. Some pay higher taxes than others and still others pay none. In fact, the fiscal cliff deal, or the American Taxpayer Relief Act, is filled with special tax loopholes that offer preferential treatment to special interest groups and corporations. After all this talk of fairness in taxing the rich more we got a law that randomly taxes some more and some less.

Which leads me to my main point. We should abandon this fruitless pursuit of “fairness” and seek equality under the law. Only by treating every taxpayer equally can we achieve any measurable standard of fairness. Equality under the law is one of the main principles this country was founded on. This is most often associated with the courtroom, but it should also apply to tax policy.

If we pursued equality under the law would it matter how much money you make? True equality would see that the poor man pays the same tax rate as the rich man. If we truly count them as equals then there is no other way. Anything else is a form of tyranny. Taxing them at different rates is an admission that they are not equal. This is more pronounced when income is taken from some and given to others. That supposes that some citizens are less entitled to the fruit of their labor than others.

Equality before the law would bring us a much simpler and, I hate to use the word, “fair” tax code. Maybe a better term would be “consistent” tax code. Can anyone else think of a more corrupt and complicated system than our current tax code? It is riddled with inequality in the form of tax breaks, loopholes, special treatment, and harsh penalties. The worst part is that a great deal of it is written by special interest groups that lobby Congress for sweetheart deals. GE has been able to avoid much in federal taxes by taking advantage of the tax code. Only a tax code that seeks “fairness” can create such inequalities.

“Fairness” is a fuzzy idea at best and who are these politicians that they can decide what is fair? Let us strive for equality under the law. Treat everyone the same. No special groups and no scapegoats. Government officials talk about how no one should be punished because of their skin color, age, sexual orientation, and so on. So why does it matter how much money we make? Lady Justice is blindfolded. The tax code should be too. For an organization hell bent on eliminating inequality the government sure does create a lot of it.


Sources:

GE Tax rate – http://www.huffingtonpost.com/2012/02/27/general-electric-tax-rate_n_1305196.html
Fiscal Cliff tax loopholes – http://www.washingtontimes.com/news/2013/jan/1/maligned-loopholes-survive-fiscal-cliff-deal-to-th/?utm_source=RSS_Feed&utm_medium=RSS
Romney 49% – http://washingtonexaminer.com/its-worse-than-romney-said-49-on-federal-aid-49-pay-no-tax/article/2508314#.UPDdBonjmMS
Flat Tax and Fair Tax – http://www.freedomworks.org/blog/jborowski/flat-tax-vs-fair-tax
Lobbying in Washington – http://www.opensecrets.org/lobby/index.php

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