As I read Tibor Machan’s assault on fairness, I rubbed my eyes in disbelief. Surely he must be jesting; surely his tongue is in his cheek. He caricatures the moral principle of fairness, considering it a “minor virt ue,” while at the same time appealing to it in order to justify his opposition to the progressive income tax. It is unfair, implies Machan, to tax rich people on a progressive scale! Rich folks, he complains, are the “victims of taxation,” and this is “plain old extortion.” I grant that some may have misused the fairness argument for trivial issues; nonetheless, it is a vital virtue that is essential if we are to balance the scales of justice.
I have known Tibor a long time, and I can understand his fear of excessive government. He escaped from communist Hungary; as a result, he has rebelled against taxation and believes fervently in the free market.
Now, I agree that the free market can be a powerful engine of economic growth. It is not, however, infallible. The government often has an important role to play in fulfilling needs that the free market does not—enforcing contracts, maintaining roads and bridges, ensuring the common defense, and providing vital services such as police, fire, and public health. Some regulations are essential in a democratic society, and appealing to fairness is eminently worthwhile.
The free market for some is equivalent to the infallible “hidden hand of God,” but it may not always promote the general welfare. The Preamble to the Constitution of the United States proclaims: “We the People of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty . . . do ordain and establish this Constitution for the United States of America” (emphasis added). Indeed, virtually all democratic states in the world have in place some form of progressive taxation to achieve their goals. It is based upon the premise that each person is entitled to some equality of consideration. This is a vital principle of justice. Thus, a child of a poor person has as much right to an education as a child of a rich person; progressive taxation helps the community to redress disparities in income, and it seeks to help those who cannot help themselves.
Radical libertarians would deny this. Many demand a flat tax with no progressivity whatever. Yet, paradoxically, many seek preferential treatment for certain classes of income, such as dividends and capital gains (now taxed at 15 percent); at the same time they oppose the minimum wage. These policies are a form of regressive taxation.
I maintain that fairness is a widely shared, common moral decency and that it is related to our sense of justice. (See John Rawls, Justice as Fairness: A Restatement [Harvard University Press: Cambridge, 2001]). Machan’s indictment of fairness is especially unfortunate today for a compelling utilitarian reason: the United States is in danger of becoming an entrenched plutocracy because of unfair tax policies.
I surely do not believe that the progressive tax should be confiscatory, as it was during the presidencies of Franklin Delano Roosevelt and Dwight Eisenhower, when the wealthy had much of their income confiscated. Moreover, I think that there may be some justification for lower capital-gains taxation as an incentive to economic growth. But, please, let us not discard even a moderate form of progressive taxation.
The demand that estate taxes (the so-called death tax) be entirely eliminated is especially unwise, for many in a family’s second and third generations may have inherited wealth and not earned their fortunes. These fortunes, if exempt from taxation, are apt to compound and grow exponentially. Warren Buffett has argued that it is unfair for him to pay a lower tax rate on his dividends and capital gains than his secretary, who is taxed up to 35 percent on her “earned income.”
A new book by Paul Krugman, The Conscience of a Liberal (W. W. Norton, 2007), points out that because of these exemptions, the top 1 percent of earners have made substantial income gains in recent years, whereas the middle class has seen its real income reduced. Disparities in income and wealth are widening. If such inequalities persist, there is grave danger to the future of democracy, which depends on a large middle class. Indeed, Krugman points out that it is the richest .01 percent of Americans who have improved their economic status the most—sevenfold in the last few decades—whereas middle-class Americans have barely increased their status. We are confronted today with a Gilded Plutocracy, a return to the pre-New Deal age of disparity. Surely, Machan’s cavalier dismissal of such inequalities should not rest on his alleged case against fairness. One can make a moral case for the widest range of people sharing in the productive wealth of society, not primarily a small privileged group of people.
I should point out that I support some forms of libertarianism: first, in the po-litical sphere, where civil liberties, free elections, and an independent judiciary should prevail. Second, in the moral domain: I defend the moral freedom of in-dividuals. The state should not legislate morality unduly; it should not intervene in the hospital room (for example, as in the case of Terri Schiavo) or the bedroom; nor should it prohibit “the right of privacy” and the right of individuals to choose their own lifestyles so long as they do not harm others. Third, in regard to economic libertarianism, clearly we need to support the free market but not in an absolutistic sense. I submit that some measure of altruism and empathy for the needs of the disadvantaged should be encouraged. I consider politics based on greed and self-interest alone morally wrong. My view combines libertarianism with social justice.
The recent efforts of the radical Right to privatize Social Security, to deny the extension of opportunities for the disadvantaged, would in effect solidify an entrenched oligarchy in which a relatively small percentage of absentee aristocrats rule and a large sector of the population is effectively impoverished.
I find Tibor Machan’s dismissal of the virtue of fairness shortsighted and intemperate, and I plead for some sense of justice in a free society where we need to respect both the blessings of liberty and an equality of concern.