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Monday, August 29, 2011

Envy, taxation, and the hissing of the geese

by John MacBeath Watkins

There's a word followers of Ayn Rand throw around a lot: Envy. And of course, Rand is big among libertarians. Guess who Ron Paul named his son after?

Envy is a sin they attribute to anyone who thinks, for example, that inherited wealth should be taxed. The assumption here is that people think taxes should be levied on wealth because wealth should be reduced, and further that the only possible reason they think wealth should be reduced is because they don't have it and are envious.

Psychologists figure that sometimes, a thing and its opposite are identical. The man who worries about the lust of others has trouble with his own lust. The libertarians who worry about the envy of others, do they have trouble with their own envy?

It's possible there are people who want wealth taxed away because of envy. On the other hand, they could advocate the same policy for purely pragmatic reasons: We can tax people who have a lot of money, or people who don't have a lot of money; wwdtd? (That is, what would deep throat do. Follow the money!) It is quite simply a fact that people who have more money can pay more tax.

After all, one of the reasons the Ancien Régime of France fell was that it had one of the worst systems of taxation ever devised by man. The Dutch were condemned for allowing tax farming in their colonies, but the French allowed it in their own country. Most public offices were for sale (including tax collector) and nobles were exempt from most taxes, so peasants, artisans and small businessmen not yet wealthy enough to purchase a better position paid the taxes. Justice was for sale as well, judges demanding payment by both parties to hear a case, so justice was out of reach for peasants.

In a way, it's as if someone tried to build a government on libertarian principles. Want taxes collected? Sell the right to collect them to a contractor, he'll be more efficient! Want cases heard? Get the people who need a judge to pay for one!

A century before the French Revolution,  Jean Baptiste Colbert said that “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing” Unfortunately, the Ancien Régime cared about your hissing only if you were rich.

But in a democratic country, you have to care about the hissing of the voters. The idea is to avoid a recurrence of anything like the storming of the Bastille by having taxes fall most heavily on those who will suffer least by paying them.


This offends Rand-influenced libertarians. What's mine should be mine, they say, because I earned it. Strangely, they also think what's left to me in the will should be mine, even though I didn't earn it. If great differences in wealth are tolerable and even just because those who hold wealth earned it, wouldn't inherited wealth undermine this system?

From Page 387 of Atlas Shrugged:

"Only the man who does not need it, is fit to inherit wealth—the man who would make his own fortune no matter where he started. If an heir is equal to his money, it serves him; if not, it destroys him. But you look on and you cry that money corrupted him. Did it? Or did he corrupt his money? Do not envy a worthless heir; his wealth is not yours and you would have done no better with it. Do not think that it should have been distributed among you; loading the world with fifty parasites instead of one, would not bring back the dead virtue which was the fortune..."
 The assumption Rand's character, Hank Rearden, makes is that those who think inherited wealth should be taxed are not only consumed with envy, had they taxed it the result would be that it would be distributed among "parasites." Yet the taxed money could have been used for a purpose Rand, and her libertarian followers, would find legitimate; protecting the country from invasion and protecting property from theft.

But the notion that envy is the root of any wish to tax inherited wealth is tied in with the libertarian notion of justice, just as much as the Marxist notion that such wealth should be seized entirely is rooted in a different notion of justice.

Where is there room for Colbert's pragmatism? Do only liberals care about the hissing of the geese?

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