Raymond V. Bottomly  ©  October 2008

 

http://www.bottomlylaw.com/

 

 

Observations on the Morality of Taxation

 

Introduction

 

            Imagine a tax system in which every citizen over the age of 20 years old paid ten dollars each year on a given date.  No other tax would be imposed.  People could pay by installments if necessary.

 

            Would such a head tax be fair? 

 

            In our current economy (meaning, given the current value of a dollar), hardly anybody is likely to complain about the tax.  The reason is obvious:  people would not feel burdened enough to complain.  If nobody complained about the tax, the issue of "fairness" would not be a burning political concern.

 

            But concern increases as burden increases.  If the head tax were one hundred dollars, perhaps only a few would complain.  If the head tax reached a thousand dollars, complaints among lower income taxpayers would become stronger.

 

            It seems clear, of course, that the ability to pay has an intuitive connection to the concept of fairness.  This is commonly addressed in tax literature.[1]  However, the concept of fairness contains the often unaddressed concept suggested above: at what point does the actual amount of tax demanded become unfair?  If we examine the concept of "fairness" a little closer, we should concede that it is a statement that contemplates a right or wrong answer, however ill-defined it may be at the margin.  Such a term is therefore decidedly moral.  The question, then, can be put more directly:  at what point does the amount claimed by a taxing government become immoral?

 

            Another aspect to the concept of fairness is the idea that a tax may be considered fair in proportion to the benefit received.[2]  A common objection to this approach is the difficulty in determining how much an individual benefits from a collective benefit.  Considering national defense as one example, should one person living on the border next to a potentially hostile nation be required to pay more than someone living far from the border?  Or perhaps more up-to-date, should people who live in "target zones" be required to pay more?  Almost nobody would forward this as an argument.  People seem to agree that such a structure is wrong.  But, again, what moral principle is at work in coming up with this view?

 

            It seems it should go without saying that when someone takes something from another person, there must be a moral justification for that taking.  Otherwise, common sense tells us that the taking is wrong.  In the realm of taxation, sometimes (although perhaps rarely in academia) a person may make the statement that taxation is theft.  Although the typical response to such a statement may be to roll one's eyes, the issue is not so straightforward.  Often the response is in the form of questions:  "Well how are we to pay for a civilized society?  What will be used to pay for all these social services that are needed?"  Such responses can only be considered answers if one presupposes that one's needs define a legitimate claim upon another.  Without such a presupposition, the response would merely be begging the question.  In other words, the presumed justification for taxes used to pay for social or public good is simply because the governing body says so. 

 

            Discussion regarding tax policy usually starts from this positive law view.  This is justified by invoking democracy.  Leaving aside the notion that democracy differs from a republic form of government, the term democracy is used as an atoning touchstone to cover the simple justification for taking from one and giving to another because a majority of citizens (or their representatives) have stated "because I want to."  If we rest there, it is obvious that the issue is merely one of force of numbers.  The only philosophical or principled basis for imposing a tax on people to benefit other people is that the more powerful group can do it without retaliation.  If this is all there were to it, it could very well be admitted that taxation is theft.

 

            So, different approaches are required if justification for taxation can be established on something other than brute force.  The debate over fairness is complicated, but perhaps can be distilled into two propositions:  First, what are legitimate claims society in general and individuals in particular have on another?  Second, what are the rules for administering those claims? 

 

            Answering both questions involves a great number of variables and sophisticated analysis.  But even these two questions involve basic issues that often get lost in the discussion.  Regarding the first question, how we define "legitimate," "claims," and "society" impact the conclusion.  Regarding the second, questions of equity and even the issue of changing the rules in mid-game, so to speak, impact the concept of fairness.  A change to any of these starting points almost necessarily changes the analysis.  This fact is obvious in the many different perspectives presented by numerous commentators on the issue of tax fairness.

 

            So there are many factors and facets to the "fairness" debate.  But the underlying moral justification for taxes in general remains unstated and largely assumed.  Other than a few fringe political candidates and the occasional brave academician, the topic is avoided.  Nevertheless, assumptions about how money raised should be spent are implicitly adopted in theoretical analysis. 

 

            Most discussions of tax fairness, use of revenues, and mechanical issues of how revenues should be raised, assume that redistribution of wealth is a good thing.  Why this is considered a good thing could stand to be examined a bit further. 

 

Basic Justifications:  Ownership, Individual Right, or Covenant Community.

 

            I propose that there are three basic models from which one's perspective on taxation may be viewed:  the Ownership Model, the Individual Right Model, and the Covenant Community Model.

 

            By Ownership Model, I mean that the taxing government is presumed to own, in some sense, all property taxed.  The Individual Right Model assumes an individual's total right to own possessions justly obtained.  The Covenant Community Model similarly recognizes an individual right to possess property, but also understands that there is an externally imposed claim upon all members of the community.

 

Ownership Model.

 

            A simple illustration of what I mean by the Ownership model may be found in the Biblical account of Joseph in Egypt.  The story is stirring as well as illustrative.[3]  Joseph was the second-youngest son of the patricarch Jacob.  Joseph was the favored son of his father's old age.  His brothers conspired to kill him out of envy.  At the last moment, however, they had second thoughts and sold him into slavery, telling their father that he had been killed by a wild animal.

 

            Joseph eventually was sold as a slave to an Egyptian official.  While serving the official, he prospered his master's affairs to the point that he had been granted full control of the household.  The master's wife falsely accused Joseph of attempted adultery, and Joseph was placed in prison.  While Joseph was in prison, he successfully interpreted dreams of two prisoners, prophesying that one would be executed and the other would return to the Pharoah's service.

 

            After several years, the Pharoah had a series of dreams that troubled him.  Nobody in his court could interpret them.  Finally, the restored prisoner recalled that Joseph, still in prison, could interpret dreams.  Joseph was quickly brought to the Pharoah whereupon he interpreted the dreams.  Joseph stated that God had revealed to him that there would be seven years of plenty followed by seven years of famine.  The Pharoah was so impressed with Joseph's abilities that he promoted him to be, essentially, prime minister over Egypt, giving him authority to set aside from each year's harvest enough to prepare for the famine.  The amount Joseph set aside was twenty percent.[4]

 

            We are not told whether this was a tax.  The requisition, in whatever form, was imposed during the years of plenty to save up for the coming famine.[5]  It was only later, during the time of the famine, that a perpetual form of taxation was imposed.

 

            After the seven years of plenty, the years of famine followed.  In the first few years, the inhabitants of Egypt, and others from neighboring countries, came to Joseph to purchase the stored food.  After a few years, however, "the money failed."[6]  At this point, the people were starving and had come to depend upon the governmental stores of grain.  They were willing to sell whatever they could to purchase food.  First they sold their cattle.[7]  When these were sold off, they sold their land, and finally even themselves in exchange for food and seed with which to plant.[8]  Having given up total ownership of their possessions and themselves, Joseph established a permanent tax of 20% on whatever the people produced.[9]

 

            Two things are striking about this account.  First, the initial requisition was a response to national emergency and was not contemplated to be a permanent tax.  The sovereign of the era, Pharoah, seemed to recognize that the people had free and clear title to their cattle, land, and themselves.  Second, it was not until the people had alienated their property and their very selves that the tax could become permanent.

 

            Similar systems were established in other periods and other kingdoms.  The Babylonian tax system was based upon a tithe, but several tithes were imposed.[10]  The basis for the right to impose the tax was the deified ruler.[11]  The Persian system was similar.[12]  Much later, the Roman tax system was also based upon the idea that the State, occupying the position of a deity, claimed ownership over all property and all people.[13]

 

            Several historical commentators have observed that a kingdom tax was based upon the state being the representative of God.[14]  The justification for collecting a tax upon subjects, accordingly, stemmed from an ownership interest held by the ruler, representing the state, in all that the subjects possessed, including themselves.

 

            Modern tax policy commentators implicitly adopt the Ownership Model.  An obvious (and pehaps extreme) example would be that advocated by Liam Murphy and Thomas Nagel in The Myth of Ownership.[15]  Although the title of the book may imply that the authors believe ownership in general is a myth, in fact, what they argue is that, in the context of taxation, there is no fundamental private ownership:

 

The conviction that determines our approach to all more specific questions is that there are no property rights antecedent to the tax structure. Property rights are the product of a set of laws and conventions, of which the tax system forms a part. Pretax income, in particular, has no independent moral significance. It does not define something to which the taxpayer has a prepolitical or natural right, and which the government expropriates from the individual in levying taxes on it. All the normative questions about what taxes are justified and what taxes are unjustified should be interpreted instead as questions about how the system should define those property rights that arise through the various transactions---employment, bequest, contract, investment, buying and selling-that are subject to taxation.[16]

 

    This view forthrightly asserts that there is no moral connection to ownership of anything.  Yet, it speaks in moral terms, stating that normative questions regarding taxation "should be interpreted" in light of how "the system should define those property rights."  These are certainly moral statements, but the standard by which they may be measured is left unstated and unsupported.

          

    According to the authors, an analysis of property rights cannot begin upon assumptions that such rights exist.  Starting from this bold (and bare) assertion, the authors argue that what we call property rights are merely conventions derived from the system of laws in effect.  Evaluating the propriety of such laws can only be done by looking at whether they benefit the whole of society.  In short, the good of society is the standard for determining the rules of ownership:

 

Evaluation must decide how "mine" and "yours" ought to be determined; it cannot start with a set of assumptions about what is mine and what is yours. The right answer will depend on what system best serves the legitimate aims of society with legitimate means and without imposing illegitimate costs. That is the only way an essentially conventional system of property, and therefore a tax scheme, can be justified. The justification may refer to considerations of individual liberty, desert, and responsibility as well as to general welfare, equality of opportunity, and so forth. But it cannot appeal, at the fundamental level, to property rights.[17]

 

         

    This presents an apparent dilemma.  The system seeks an objective standard by which the fairness of property rules may be evaluated, yet seeks also to avoid setting such a standard.  Such "bootstrapping" is common not only to liberal discussions of taxation, but, as addressed later, a fundamental problem arising in most positivist theories.

    

        Even more serious is the internal confusion that results from their argument.  The authors assert that considerations of individual liberty should be included in the analysis.  They further assert that property rights themselves are nonexistent without a framework of laws.  By following through on their rationale, on what basis can one consider individual liberty?  If property rights are nonexistent outside of law, why should not other individual rights likewise be creatures of law?  Once that is conceded, there is no basis at all to allow for individual rights of any sort.  The government decides that too.  One critic noted regarding this book:

 

[O]pponents of taxation are guiltless of the conceptual error our authors impute to them. They maintain that people possess property rights that the government ought to recognize. Why is the falsity of this view "perfectly obvious"? It is rather Murphy and Nagel who have lapsed into grievous error: they confuse legal with moral rights.[18]

 

          Of course, the authors are aware that their system may bring strong objections from people who still think in terms of owning what they own:

 

(I)t is likely to arouse strong resistance. . . . It sounds too much like the claim that the entire social product really belongs to the government, and that all after-tax income should be seen as a kind of dole that each of us receives from the government, if it chooses to look on us with favor.[19]

 

         The authors' response is less than reassuring:

 

The state does not own its citizens, nor do they own each other collectively.  But individual citizens don't own anything except through laws that are enacted and enforced by the state.  Therefore, the issues of taxation are not about how the state should appropriate and distribute what its citizens already own, but about how it should allow ownership to be determined.[20]

 

          While the authors labor hard to establish a nuanced distinction, it stretches reason to say that the state does not own everything the citizens possess, but merely determines whether such ownership should be allowed.  It is telling that even in mainstream tax literature, such presumptions are implicit.  Maxims such as, "The power to tax involves the power to destroy"[21] and "tax exemptions and deductions are 'a matter of grace [that] Congress can, of course, disallow . . . as it chooses'"[22] are common and accepted at face value.  Yet they seem to acknowledge total sovereign ownership by the state.  It seems that Nagel and Murphy are merely making explicit the underlying assumptions of modern tax jurisprudence.

         

    The Ownership Model allows for other semantic play as well.  For instance, in tax literature it is common to assume that a tax preference is a subsidy.  In a strict economic sense, if we assumed that nobody owned what they possessed, this would be true.  Any sort of allowance by the "grace of Congress" for someone to not pay a tax and to possess income owned originally by the state would indeed be a subsidy.  But to a person under the mistaken assumption that he may own what he has earned, such a tax break would seem to be merely the government leaving him alone.

      

      From a historical perspective, such a person would indeed be justified in his view.  In the early years of the income tax only the very rich had to pay any income tax at all.  A factory worker, a farmer, a laborer, all were unaffected because none had to pay an income tax. In today's terminology, they were granted a tax preference. Would any of them, at the time, consider themselves as receiving a subsidy from the rich?  Most likely not because they weren't getting any money from the government.  Because they never understood themselves to have the obligation to pay for whatever social good this income tax paid for (they likely sensed no obligation to pay for some "social good"), they did not sense that they were discharged of any sort of debt.  Because they were not discharged of a debt, they doubtless would not think they received a subsidy simply because the government did not demand a portion of their earnings.

 

            A tax preference cannot be a subsidy without a discharged debt (implied or otherwise) on the part of the person not having to pay a tax.  Importing the concept of subsidy, therefore, presumes a debt has come about.  But assuming that the debt exists begs the question.  And merely assuming that the state owns everything similarly begs the question.  Neither assumption does anything to establish the moral basis for the view asserted.

 

            The Ownership Model, therefore, suffers from internal inconsistencies.  At best it is in force because, well, the ones with the force enforce it.  Although it appears to be the paradigm we operate in, it cannot be easily justified on a moral basis without resorting to dogmatic statements derived from subjective perspectives.

 

            Before going on, allow one more recent example of the extremes one can be led into by following blindly the idea that the state owns everything, including its citizens: endowment taxation.  Endowment taxation is the concept that the state should tax a person based upon his ability to earn, not his actual earnings.  Tax scholars recently have been discussing the issue seriously.[23]

 

Individual Rights Model.

 

            Individual rights based theories originated in the Enlightenment, but suffered from competing and inconsistent philosophies as time proceeded.  Although its development had many contributors, primarily it arose from the thinking of Hobbes, Locke, and Grotius.

 

            Thomas Hobbes (1585-1679) believed that, absent a society in some form, people would live in a state of nature.  People in this state inherently possess natural rights and unlimited freedom.  The natural rights were grounded in individual autonomy (literally, "self-law").  Under such a condition, any person would have the right to possess whatever he could possess, subject to threats imposed by others.  This "right to all things" was countered by others' freedom to harm, resulting in a sort of law of the jungle he called Bellum omnium contra omnes ("war of all against all").[24]

 

            People quite naturally became tired of this battle, so, according to Hobbes, they entered into a social contract.  The bargain was to gain civil rights in return for placing themselves under civil law.  Under this system, the sovereign is not involved in the contract, but is created by the contract. 

 

            Another version argues that civil rights are granted in exchange for the obligation to defend the rights of others.  Under this approach, the individual voluntarily gives up some freedoms in exchange for protection from the society.

 

            The Dutch legal scholar and philosopher Hugo Grotius (1583-1645) introduced the modern idea of individuals' natural rights.  Grotius began with self preservation and derived other natural rights from this.  His approach was an attempt to establish moral consensus in the presence of religious plurality.  He sought a set of fundamental laws common to all people, that "even if we were to concede what we cannot concede without the utmost wickedness, that there is no God, these laws would still hold."[25]  In the 16^th and 17^th centuries, this was a radical concept because it implied that the people themselves were sovereign.  As time went on, however, the idea took hold, especially in the period leading up to the American Revolution.

 

            The Individual Rights model, although radically different from the Ownership Model, contains a potential flaw.  The individual is always presumed to retain his ownership interest in rights (including property rights) unless he voluntarily relinquished them for some benefit.  Theoretically, the people could agree to relinquish all ownership rights in themselves to the sovereign.[26]  This is what happened under Pharoah.  One difference, however, that may provide some potential relief to those who object to excessive taxation is that under the Individual Rights model, the sovereign gains his authority by agreement of the people.  Presumably the authority could be revoked at any time.  Another flaw, as we will see later, is that the concept of autonomy can lead to a tendency to redefine the meaning of justice.

 

Covenant Community Model.

 

            The tax[27] system of ancient Israel contrasted with the Ownership model of ancient Pharoah.  Under the Mosaic law, ten percent was to be collected from the "increase" of the agricultural production.[28]  This was to be paid to the landless priests of the tribe of Levi.  The Levites performed both ecclesiastical functions and essential civil functions.[29]  Other tithes were also imposed, but on alternating years.[30]  One commentator states that three different but central objectives were accomplished by the tithe: support the Levites (who were landless priests), bring people regularly together for worship, and to support the poor.[31]  One distinctive difference between the Old Testament tithe and modern taxation was that the law setting out the tax structure was immutable as God's law, and therefore "impervious to special interest 'politicking.'"[32]

 

            In addition to providing a food tithe for support of the poor, Old Testament law provided other measures.  Farmers were required to leave portions of their fields unharvested for the poor to glean through their own efforts rather than begging.[33]  They also were required to leave their land untended one year out of seven, and allow the poor to harvest from it what they could.[34]  Many commentators consider that these laws have the effect of increasing the sense of community.[35]

 

            The difference between the tithe system of ancient Israel and the flat income tax of ancient Egypt as depicted in the story of Joseph, is not in the rates.  Indeed, when all of the tithes of the Mosaic law are considered, the rate on income is estimated to be between 15 and 20%.[36]  The difference, rather, lies in which entity claims ownership of the people and property.  As we have seen, under Pharoah's regime, the people had relinquished ownership of their property and themselves to the ruler.  Under the Mosaic system, ownership claims were not relinquished, but all property and life was acknowledged to belong ultimately to God.[37]

 

            From a tax history perspective, this structure is significant in two ways.  First, the level of tax is fixed and not subject to the whims of a ruler.  Second, the basis for the tax arises not from a state or ruler's ownership interest in the people, but rather the people's dependence upon God, who is independent of a state or ruler.  This second aspect is reflected in what is called in theological circles the "covenant community" of Israel, which means that the community is bound by a covenant with God, both to God and to each other.[38]

 

            An important distinction about the system of ancient Israel is that there were no criminal sanctions for failing to pay the tithe.  Instead, such failure would render a person "cut off" or excommunicated.  In other words, the violator would not be allowed to be a member of the covenant community.[39] 

 

            The Covenant Community Model has some similarity to the Individual Rights Model.  The social contract sounds very much like a voluntary association.  However, there is one big difference.  Under the Individual Rights model, the whole scenario rests on the idea that the natural rights of individuals are fundamental.  In the Covenant Community Model, natural rights are granted by God as the external authority.

 

            There are essentially no modern adherents to this model outside of theological circles.  Even in such circles, many have not thought much about these issues.  Some who have include R.J. Rushdoony, Greg Bahnsen, and Herb Titus.

 

A Look at Traditional Objective Standards as they Relate to Justice and Property.

 

            It can be fairly stated that some version of the Covenant Community Model prevailed in Western Civilization and continued in the early years of the United States (although the influence of Enlightenment thinking was heavily present).  The concept of justice protecting private property was pervasive.  For instance, St. Augustine of Hippo, in his great work City of God, observed the following:

 

Justice being taken away, then, what are kingdoms but great robberies?  For what are robberies themselves, but little kingdoms?  The band itself is made up of men; it is ruled by the authority of a prince, it is knit together by the pact of the confederacy; the booty is divided by the law agreed on.  If, by the admittance of abandoned men, this evil increases to such a degree that it holds places, fixes abodes, takes possession of cities, and subdues peoples, it assumes the more plainly the name of a kingdom, because the reality is now manifestly conferred on it, not by the removal of covetousness, but by the addition of impunity.  Indeed, that was an apt and true reply which was given to Alexander the Great by a pirate who had been seized.  For when that king had asked the man what he meant by keeping hostile possession of the sea, he answered with bold pride, “What thou meanest by seizing the whole earth; but because I do it with a petty ship, I am called a robber, whilst thou who dost it with a great fleet art styled emperor.”[40]

 

          For Augustine, therefore, if a kingdom operated in such a fashion as to unjustly take possession of people's property, it was no different from a pirate or a thief.  It should be acknowledged that Augustine's concept of justice was nuanced.  He certainly equates justice to obedience to the eternal law of God as established in the Ten Commandments and elsewhere in scripture.[41]  In the same vein, his view encompasses the idea that obedience to the laws of God entail concern for those less well off.[42]  Nevertheless, his term for sovereign governments that do not follow the objective principles laid out under the law of God is "organized brigandage."[43]

         

    Similarly, the 16^th century Swiss reformer Zwingli wrote on the proper role of government as being subject to the law of God:

 

‘For, for this cause pay you tribute: for they are God's ministers attending continually upon this very thing.’ Some rulers open their eyes very wide indeed when they hear that the paying of tribute is made a duty by divine pronouncement; but they do not reflect that Paul says, "for, for this cause." What then, is the cause on account of which the paying of tribute is commanded? This, that the rulers may smite the evil and not the good, maintain the public peace, honour and establish the good and not the evil. For Paul says they ‘attend continually upon this very thing,’ upon taking vengeance in God's stead, and punishing those who do that which is evil (Rom. 13: 4).[44]

 

           

    After the United States Revolutionary War, John Adams, in 1787, in discussion on the establishment of the U.S. Constitution and concerned about the possibility that in a pure democracy a majority may vote to appropriate the wealth of individuals, wrote the following:

 

The moment the idea is admitted into society, that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. If "Thou shalt not covet," and "Thou shalt not steal," were not commandments of Heaven, they must be made inviolable precepts in every society, before it can be civilized or made free.[45]

 

          And in the following century, Representative David Crockett addressed Congress regarding his understanding that, under the Constitution, federal tax money should not be spent even for charity:

 

"Mr. Speaker -- I have as much respect for the memory of the deceased, and as much sympathy for the sufferings of the living, if suffering there be, as any man in this House, but we must not permit our respect for the dead or our sympathy for a part of the living to lead us into an act of injustice to the balance of the living. I will not go into an argument to prove that Congress has no power to appropriate this money as an act of charity. Every member upon this floor knows it. We have the right, as individuals, to give away as much of our own money as we please in charity; but as members of Congress we have no right so to appropriate a dollar of the public money.[46]

 

         These brief excerpts show how property rights have historically been viewed in light of objective standards.  The fact that they were derived from Biblical law was not particularly questioned generally, although numerous philosophers, particularly from the period of the Enlightenment until the present, have sought in one way or another to remove the concept of laws of God from jurisprudence.  Perhaps the clearest juxtaposition of point of view can be shown by contrasting the view of William Blackstone with the later legal realist, Roscoe Pound.

 

            Scholarly writers rarely discuss Blackstone, let alone his interesting distinction between "The Laws of Nature" and "Natural Law." Blackstone clearly articulated the distinction and considered the two terms to be separate terms of art, and further grounded the "Laws of Nature" upon the law of God:[47]

 

"Yet undoubtedly the revealed law is of infinitely more authenticity than that moral system, which is framed by ethical writers, and denominated the natural law. Because one is the law of nature, expressly declared so to be by God himself; the other is only what, by the assistance of human reason, we imagine to be that law. If we could be as certain of the latter as we are of the former, both would have an equal authority; but, till then, they can never be put in any competition together." [48]

 

         

        The point Blackstone made, which was rejected by the legal positivists of the late 19th and early 20th centuries, was that the express law of God is the primary authority. We may use our minds and reason to try to develop an understanding of law (this is "Natural Law", in other words, what our fallen minds attempt to deduce from Nature), but the clear teaching of God (the Law of Nature, the very decree that binds the universe and all of its creatures) must guide our reason.
        

        One of the legacies of Christopher Columbus Langdell, dean of Harvard Law School in the late 19th century, is that now almost nobody reads Blackstone. Langdell adopted the case study approach of law. It was supposed to be a "scientific" approach, following inductive analysis of how courts decided cases instead of an abstract analysis based upon ancient principles. Legal thinkers initially opposed this idea, but it became the standard format for legal education in almost every law school in the country.
    

         This approach was a conscious unmooring of jurisprudence from theology. Roscoe Pound, following Langdell, stated the following in his essay "Mechanical Jurisprudence":

 

"We have, then, the same task in jurisprudence that has been achieved in philosophy, in the natural sciences and in politics. We have to rid ourselves of this sort of legality and to attain a pragmatic, a sociological legal science.
. . .
Herein is the task of the sociological jurist. Professor Small defines the sociological movement as "a frank endeavor to secure for the human factor in experience the central place which belongs to it in our whole scheme of thought and action." The sociological movement in jurisprudence is a movement for pragmatism as a philosophy of law; for the adjustment of principles and doctrines to the human conditions they are to govern rather than to assumed first principles; for putting the human factor in the central place and relegating logic to its true position as an instrument." [49]

 

         

       The point of contrasting these views is to demonstrate the shift in thinking of legal philosophers with regard to property rights, among other things.  The old concept that property of another could be taken by force of government was quite simply considered to be unjust.  As such, it was regarded as theft.  The only way to call such appropriations just would be to change the concept of justice.  This process has been undertaken quite consciously for more than two centuries.

 

The Decline of the Individual Rights and Covenant Community Models.

 

            John Locke (August 29, 1632 – October 28, 1704), considered the first of the British Empiricists, heavily influenced the development of individual rights based social contract theory.  He is widely regarded as one of the most influential Enlightenment thinkers and contributors to liberal theory.[50]  Locke's influence is easily perceived in the work of not only Thomas Jefferson, but Alexander Hamilton, Jonathan Edwards, Jeremy Bentham, John Stuart Mill, Voltaire, Montesquieu, Leibnitz (as an opponent) and Kant.[51]   Locke's work influenced the American Declaration of Independence.[52]  His approach to epistemology laid the groundwork for the Enlightenment's departure from relying upon the Bible as a basis for individual rights.

 

            Locke's starting point was to attack the idea of innate ideas.[53]  He sought to demonstrate that humans derived all of their knowledge from experience.  His goal was to show that knowledge was possible for a mind that had no prior ideas in order to counter skepticism (the idea that one cannot have knowledge) without relying upon some a priori foundation.  Immediate sensations produced simple knowledge.  However, Locke conceded that there needed to be some connection between our perceptions and true reality.  The simple ideas we have come about in a natural fashion and are conformed to reality by an external agency.  That external agency, what he called "the goodness of God," assures that our simple ideas about things conform to the reality of those things, at least to the extent of human needs.[54]  For more complex ideas, such as mathematics, this is not necessary because such ideas do not have to conform to concrete things.

 

            Notwithstanding his epistemology, Locke believed that some things were fundamental, such as property rights:

 

Though the earth, and all inferior creatures, be common to all men, yet every man has a property in his own person: this no body has any right to but himself. The labour of his body, and the work of his hands, we may say, are properly his. Whatsoever then he removes out of the state that nature hath provided, and left it in, he hath mixed his labour with, and joined to it something that is his own, and thereby makes it his property. It being by him removed from the common state nature hath placed it in, it hath by this labour something annexed to it, that excludes the common right of other men: for this labour being the unquestionable property of the labourer, no man but he can have a right to what that is once joined to, at least where there is enough, and as good, left in common for others.[55]

         

       David Hume (1711-1776) extended some of Locke's epistemological ideas to their logical conclusion.  He did away with the requirement of the "goodness of God" to make ideas conform to reality.  In so doing, he ultimately concluded that the spirit that did the thinking did not exist at all.[56]  In the end, his philosophy epitomized skepticism,[57] and Hume was the philosopher who established that inductive reasoning can yield no knowledge at all.  This was because induction required an assumption that the experienced universe was uniform, and we could not be sure how things behave when they go "beyond the present testimony of the senses, and the records of our memory"?[58]

    

        Consistent with this perspective, Hume considered virtue to be what is useful to mankind, not something that conformed to an objective standard of good.[59]  Jeremy Benthem, the "father" of utilitarianism, revised the standard to be the greatest good of the greatest number.[60]

 

            From this point, if not earlier, Enlightenment thinking splintered off in several directions.  For instance, Auguste Comte (1798-1857) introduced "Positive Philosophy," an entirely empirically based system that sought to address society's problems from a scientific standpoint.[61]  A 19^th century critic described it as follows:

 

"Positivism" takes its pretext from the seeming certainty of the exact sciences, and the diversity of view and uncertainty which appear to attend metaphysics.  It points to the solid and brilliant results of the former, and to the asserted vagueness and barrenness of the latter.  It reminds us that none of the efforts of philosophy have compelled men to agree touching absolute truth and theology; but the mathematical and physical sciences are asserted to carry perfect assurance and complete agreement to all minds which comprehend their proof. [W]hen we see the human mind thus mocked by futile efforts of the reason, we must conclude either that it has adopted a wrong organon for its search, or that it directs that search towards objects which are, in fact, inaccessible to it.[62]

 

            Comte sought to apply exact science to sociology upon an entirely empirical basis.  For all his rejection of religion, however, he has been discredited somewhat by attempting to replace all religion with a new religion of enlightenment resulting from positivistic study, and he actually proposed that he himself should be the first "Pontiff of Humanity" overseeing this process.[63]

         

       Nevertheless, Comte's positivism influenced many later thinkers, such as John Stuart Mill and John Dewey.  The fact of its influence in modern politics can easily be demonstrated by the ubiquitous reliance upon empirical economic studies to justify almost any governmental program.

    

        During the same period, another French writer was concerned with the rise of socialism.  Writing from an individual rights perspective also arising from Locke, Frédéric Bastiat (1801-1850), the 19^th century French political theorist and economist, considered redistribution through taxation to be "legal plunder":

 

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

 

Then abolish this law without delay, for it is not only an evil itself, but also it is a fertile source for further evils because it invites reprisals. If such a law – which may be an isolated case – is not abolished immediately, it will spread, multiply, and develop into a system.[64]

 

….

 

At this point, I think that I should explain exactly what I mean by the word plunder.

 

I do not, as is often done, use the word in any vague, uncertain, approximate, or metaphorical sense. I use it in its scientific acceptance—as expressing the idea opposite to that of property [wages, land, money, or whatever]. When a portion of wealth is transferred from the person who owns it—without his consent and without compensation, and whether by force or by fraud—to anyone who does not own it, then I say that property is violated; that an act of plunder is committed.[65]

 

            From just this short overview, I hope that it is apparent that at least two strains of thought derived from the original Individual Rights theories.  "Autonomy" can lead to a moral conclusion that individual liberty must be protected.  Yet it also leads to a conclusion that man cannot prove morality at all from his own empirical observations.  Philosophers from the 16^th century to the present have had to wrestle with this dilemma.  Some, like Immanuel Kant, attempted to find some absolute standard outside of the empirical world on which to rest.  Others, like Sartre, sought to define meaning through experience.  In either case, the foundation required to support a moral standard regarding the role of government collapsed, and theories such as utilitarianism (the greatest good for the many) and their more sophisticated refinements (such as economic theories incorporating Pareto efficiency) have taken their place.[66]

         

       John Rawls attempted to regain some philosophical footing by building upon Locke, Rousseau, and Kant.[67]  He rejected utilitarianism for its disdain for individual liberty.[68]  Yet he sought to establish a fundamental system of government (including redistribution) on the basis of economic efficiency that recognized individual liberty.  His definitive work, A Theory of Justice, states his case.

    

        Rawls attempted to develop a system of justice that applied the concept of "fairness" to justify a progressive liberalism that may intervene in people's activities in certain ways to reduce economic and social inequality:

 

(T)he guiding idea is that the principles of justice for the basic structure of society are the object of the original agreement.  They are principles that free and rational persons concerned to further their own interests would accept in an initial position of equality as defining the fundamental terms of their association.  These principles are to regulate all further agreements; they specify the kinds of social cooperation that can be entered into and the forms of government that can be established.  This way of regarding the principles of justice I shall call justice as fairness.[69]

 

            His basic approach begins with what he called the “original position”, which corresponds with the Hobbesian state of nature.[70] The choices made by hypothetical rational men in this state would determine the principles of justice.[71]  Rawls contrives an imaginary condition in which one is stripped of all "morally irrelevant" information about himself.  This includes knowledge of one's attachments and associations, memories, awareness of particular passions, talents, and virtues and vices, and social position.  All these things are, for Rawls, “arbitrary from a moral point of view.”[72]  The point is to start from a veil of ignorance of everything that makes one unique.  What is left is the knowledge of what is shared with other human beings: the formal capacity for choice and a rudimentary sense of justice.

         

       Combining a group of individuals from this imaginary position, Rawls believes that they would intuitively agree that an unequal society would be unfair.  However, he also believes that individual freedom would be preferred as well.  These intuitive assessments lead to his two "Principles of Justice":  First, one would take as a fundamental the principle of “an equal right to the most extensive basic liberty compatible with a similar liberty for others.”  Second, also fundamental, one would require the arrangement of inequalities in society so that they are “to the greatest benefit of the least advantaged, and attached to positions open to all under conditions of fair equality of opportunity.”[73] 

    

        Rawls is not opposed to inequality of condition per se and allows for it so long as it is "to everyone's advantage, and at the same time, positions of authority and responsibility must be accessible to all."[74]  He proposes holding such positions open and then arranging "social and economic inequalities so that everyone benefits."[75]

 

        No doubt it is a tall order, and Rawls does a commendable job trying to achieve this in theory.[76]  However, it is the starting assumptions that have caused him the most difficulty with his critics.

 

            Perhaps Rawls's most significant critic was his colleague at Harvard University, Robert Nozick.  Nozick admired Rawls's work even though, as a libertarian, he disagreed with it:

 

(I)t is impossible to finish his book without a new and inspiring vision of what a moral theory may attempt to do and unite; of how beautiful a whole theory can be.  I permit myself to concentrate here on disagreements with Rawls only because I am confident that my readers will have discovered for themselves its many virtues.[77]

 

          One problem Nozick had with Rawls was that Rawls's system sought to distribute the total benefits of social cooperation rather than the incremental increase in value resulting from social cooperation.[78]  Indeed, why would rational people choose to enter into an agreement that would potentially make them worse off than if they had not entered into a social contract at all?  From a property rights perspective, gains from social cooperation belong to those who cooperate, not to society.

         

       Nozick conducts a thought experiment that begins from what could be called a microstate and attempts to describe how it grows, according to Locke's "invisible hand" into a minimal state.[79]  For Nozick, the minimal state is the ideal: its functions are "limited to the narrow functions of protection against force, theft, fraud, enforcement of contracts, and so on."[80]  Any more extensive state powers would violate fundamental rights.[81]

    

        Nozick's criticism of Rawls's redistribution (which would apply to other schemes as well) was based upon his entitlement theory:

 

To think that the task of a theory of distributive justice is to fill in the blank in "to each according to his ________" is to be predisposed to search for a pattern; and the separate treatment of "from each according to his ________" treats production and distribution as two separate and independent issues.  On an entitlement view these are not two separate questions.  Whoever makes something, having bought or contracted for all other held resources used in the process . . . is entitled to it. . . . Things come into the world already attached to people having entitlements over them.[82]

 

          Nozick defended the entitlement theory on the basis that it reflected reality and that it better accounted for how people traded in goods.  The distributive justice approach "treats objects as if they appeared from nowhere, out of nothing."[83]  His counter-maxim to the standard "from each according to" phrases was this:

 

From each according to what he chooses to do, to each according to what he makes for himself (perhaps with the contracted aid of others) and what others choose to do for him and choose to give him of what they've been given previously (under this maxim) and haven't yet expended or transferred.[84]

 

          Recognizing that the slogan was not very catchy, Nozick converted it to this:

         

           From each as they choose, to each as they are chosen.[85]

 

            Nozick's theory of justice is comprised by the following elements:  (1) justice in acquisition; (2) justice in rectification (if the first principle is violated); (3) justice in holdings;  and (4) justice in transfer.[86]  All legitimate holdings justly transferred will also be just.  His entitlement theory is a non-patterned historical principle as opposed to a patterned principle of distributive justice as found in Rawls's system, utilitarianism, and egalitarianism in general.[87] 

 

        The disadvantage of distributive justice systems is that they focus on snap-shot slices of time and seek to change the inequalities found at that moment.[88]  It ignores the question of whether someone did something in the past to deserve the inequality.[89]  Nothing is inherently unfair in introducing time sequence into the question.  A person could be compensated for the little he has now by gaining more later.[90]

        

        Nozick's famous "Wilt Chamberlain" hypothetical demonstrates how the Rawls (or other egalitarian) pattern could be disrupted.[91]  In that example, Nozick allowed an initial starting point in which everyone was economically equal.  Then he has Wilt Chamberlain charge $0.25 admission fees to anyone who wants to see him play basketball.  A million people do so.  At the end of the series of exhibitions, Wilt Chamberlain has a quarter of a million dollars and each of the million people have $0.25 less than they started with.  Then Nozick points out that this distribution is no more unjust than the starting one (which was, by the liberal egalitarians' definition, just) because each transaction was done freely and without coercion.[92]  But the endpoint distribution in this example is different and contrary to the snapshot egalitarian standard.  This demonstrates, according to Nozick, that the standards of justice for the redistributionists are themselves not just.

    

            In addition, Nozick states that this hypothetical demonstrates how freedom to trade disrupts patterns.[93]  Inevitably the distribution will stray from the egalitarian's ideal.  Continual coercion by the state would be required to return things to the ideal state.  Such coercion would inhibit the freedom Rawls seeks to preserve.  If Wilt had to return a quarter to every person who had become "less well off", it is unlikely that he'd continue to perform exhibitions.

 

          Nozick identifies redistribution schemes as following what I call the Ownership Model:

 

Whether it is done through taxation on wages or on wages over a certain amount, or through seizure of profits, or through there being a big social pot so that it's not clear what's coming from where and what's going where, patterned principles of distributive justice involve appropriating the actions of other persons.  Seizing the results of someone's labor is equivalent to seizing hours from him and directing him to carry on various activities.  If people force you to do certain work, or unrewarded work, for a certain period of time, they decide what you are to do and what purposes your work is to serve. . . . This process . . .makes them a part-owner of you; it gives them a property right in you.[94]

 

         Nozick's system proved to be a significant response to Rawls.  However, it contains its problems as well.  For one thing, politcal "realists" may be suspicious that the system would adequately provide for those who, for various reasons, cannot compete in the free market.  This practical problem contains transition costs that would impede political adoption of his system in any sort of quick fashion.

         

           But an even greater problem is that Nozick, like Rawls, begins as a Kantian.  He obtains his first principles through human intuition.  This self-referent origin of principles leaves open the charge that the first principles are not principles at all, but merely whims.  The anarcho-libertarian Murray Rothbard noted:

 

Finally, a grave flaw permeates the entire discussion of rights and government in the Nozick volume: that, as a Kantian intuitionist, he has no theory of rights. Rights are simply emotionally intuited, with no groundwork in natural law - in the nature of man or of the universe. At bottom, Nozick has no real argument for the existence of rights.[95]

 

         This difficulty could be easily avoided, from a logical standpoint, if Nozick or other libertarians followed the lead of John Adams quoted on page 17.  Taking seriously as a first principle the commandment, "Thou shalt not steal," neatly bypasses Rothbard's objection.  The other objection, regarding assistance to the poor, likewise could be bypassed by an adoption as a first principle a limited duty to care for the poor on the basis of an external commandment.  However, in our day it seems that first principles themselves are avoided (or at least politely unmentioned) primarily because they necessarily imply a God.

 

Examples of Uneasiness with Moral Standards: McCaffery, The Uneasy Case for Wealth Transfer Taxation.

 

            Edward McCaffery's 1994 article, The Uneasy Case for Wealth Transfer Taxation,[96] precipitated a discussion from many sides that illustrate the presuppositions and uneasiness with which commentators approach moral standards.  A brief overview of his article follows.

 

            McCaffery frames the problem by noting several points.  First he begins by accepting the view that a "liberal democratic state" is uncomfortable with privately held wealth and unequal distribution across generations.[97]  He acknowledges that the purpose and role of other taxes, such as the income tax, have shifted over time, but asserts that our approach to wealth transfer taxation has not essentially changed since 1916 when the first estate tax was put into effect.[98]  He also acknowledges that scholarly support for a wealth transfer tax, including calls for a confiscatory estate tax, is still strong among academics.[99]

 

            However, McCaffery identifies several problems with the estate tax.  First, it does not appear to work.  It is complex and does not raise significant revenue.  And it has never been popular.[100]  Second, McCaffery believes that the estate tax itself cannot be supported on liberal grounds.  He attempts to demonstrate conclusion by applying a political and interpretive approach, borrowed from John Rawls, that seeks to avoid discussing "essentialist concepts like 'income' or 'consumption'" and "metaphysical" concepts such as natural rights to individual earnings.[101]  He acknowledges that if a political theory of taxation is grounded on the idea that legal and economic rights are human made, and therefore, a set of tax rules would be "up for grabs."[102]  Nevertheless, he seems comfortable applying his conception of Rawl's "interpretive" approach of "grounding (a) 'political conception of justice' on 'certain fundamental ideas seen as implicit in the public political culture of a democratic society.'"[103]  His interpretive approach means seeking "norms in society's actual practices and beliefs."[104]   It appears that McCaffery seeks to apply a positivist view based upon the subjective understanding of political culture.  Such an approach is consistent with avoiding application of absolute standards and adopting the rough consensus of a democratic majority.

 

            McCaffery justifies his democratic starting point by noting that the primary objection against tax policy based upon will of the majority, that expressed in Federalist Paper No. 10 by James Madison, in reality does not seem to have come to pass.[105]  Understanding what McCaffery is addressing requires a brief review of Federalist No. 10.  Madison was concerned with instability caused by what he called "factions."  His definition of a faction:

 

By a faction, I understand a number of citizens, whether amounting to a majority or a minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adversed to the rights of other citizens, or to the permanent and aggregate interests of the community.[106]

 

          Madison believed that there were two ways to deal with the "mischiefs of faction," one by removing the causes and the other by controlling the effects.  He rejected the first because it would require either destroying liberty or requiring all citizens to have the same opinions and interest.[107]  However, although he acknowledges the problem arising from man's self interest and competition, Madison believed that it was the purpose of government to prevent the majority from infringing on basic rights, a view that is decidedly different from that of the modern liberal:

 

The diversity in the faculties of men, from which the rights of property originate, is not less an insuperable obstacle to a uniformity of interests. The protection of these faculties is the first object of government. From the protection of different and unequal faculties of acquiring property, the possession of different degrees and kinds of property immediately results; and from the influence of these on the sentiments and views of the respective proprietors, ensues a division of the society into different interests and parties.[108]

 

          Because it is unrealistic to believe that "enlightened statesmen" will always be in power, Madison sought to control the effects of a majority faction against the rights-based interests of a minority by establishing a republic form of government rather than a democratic form of government.  He noted that under a pure democracy, "there is nothing to check the inducements to sacrifice the weaker party or an obnoxious individual" and that governments based upon this system have "ever been spectacles of turbulence and contention" and incompatible with personal security and private property rights.[109]  Madison's "cure" was to have a republic of delegated representatives who are somewhat removed from the passions of the majority of the electorate.  Indeed, Madison seems almost to be speaking directly to modern egalitarians in his appeal, stating that because states in a Confederacy are less likely to be subject to local passions, they may avoid a "general conflagration" of strange and foolish ideas that may arise from other states:

 

A rage for paper money, for an abolition of debts, for an equal division of property, or for any other improper or wicked project, will be less apt to pervade the whole body of the Union than a particular member of it; in the same proportion as such a malady is more likely to taint a particular county or district, than an entire State.[110]

 

          McCaffery, however, believes that the problems feared by Madison must not be real problems because they have not yet come to pass.  As he states, "(p)art of what makes the estate tax such a fascinating example is that neither envy nor any 'soak the rich' populism can explain the tax's unpopularity and its practical evisceration, here and in other democratic societies."[111]  Of course, this conclusion requires that McCaffery accept the debatable proposition that we have become a pure democracy in practice.  Unaddressed at this point is the question of how much of our political culture has retained Madison's ideal.  In other words, it may be that the reason that people are not particularly interested in redistribution by confiscating inherited wealth is because the principles advocated by Madison are inherent to our culture, or even inherent in man in general.

         

           McCaffery's approach in attempting to explain why redistribution of wealth through the estate tax is contrary to egalitarian ideals sometimes is plainly circular:

 

My argument follows three basic steps: (1) The current gift and estate tax does not work, is in deep tension with liberal egalitarian ideals, and lacks strong popular or political support. (2) While the failure of the status quo may suggest a stronger wealth transfer tax as an alternative, such an answer suffers from two distinct problems: (a) a stronger tax is neither practical nor popular, and (b) given the many imperfections of the real world and the likely consequences of a strengthened transfer tax, such as reduced work, reduced savings, and increased inequality in consumption, a stronger wealth transfer tax may not be preferable even on ideal liberal grounds. (3) Motivated by the first two points to think through matters more deeply, we can arrive at alternative tax systems that both comport better with liberal first principles and fit well with the implicit spirit of our actual practices and beliefs, without any form of state tax at all.[112]

 

          Reading this section carefully, he seems to say that the estate tax does not conform to egalitarian principles because (1) it lacks popular support and is in tension with egalitarian ideals, (2) it is not practical or popular, and may not, considering actual economic effects, comport with ideal liberal grounds (by this I assume he means egalitarianism in part).  Granting from further reading of his article that he raises substantive questions, this circular argument (that is, the estate tax is does not conform to egalitarian principles because it is in tension with egalitarian ideals) opens McCaffery to all sorts of criticism.  However, as he develops his argument, McCaffery seems to find himself supporting (albeit, I believe inadvertently) an objective standard that Madison, Adams, and perhaps Augustine, all would recognize as fundamental law.  It is this inadvertent conclusion, I believe, that has generated so many vigorous responses.

         

           McCaffery first sets out the traditional liberal egalitarian case for wealth transfer taxation (and consequently, redistribution in general).  Although the traditional case includes revenue raising and breaking up large estates, he points out that almost all scholars acknowledge that these have historically been minor results.  He states that the strongest arguments for wealth transfer taxes come from liberal egalitarian "philosophical foundations and intuitions."[113]

        

            Essentially, McCaffery argues, "liberal egalitarians" view intra-generational uses of wealth differently from inter-generational transmissions, typically willing to allow intra-generational divergences while wanting to control inter-generational transfers.[114]  The reason for this seems to be a desire to have an equal starting point.[115]

        

            McCaffery's outline of the liberal-egalitarian position is essentially Rawlsian.  He quotes Rawls extensively as the best systematic exposition.  The two basic Rawls principles are reviewed:

 

1.         Each person is to have an equal right to the most extensive scheme of equal basic liberties compatible with a similar scheme of liberties for others.

 

2.         Social and economic inequalities are to be arranged so that they are both (a) reasonably expected to be to everyone's advantage, and (b) attached to positions and offices open to all.[116]

 

            McCaffery reviews the Rawls basic tax scenario that applies a relatively flat rate consumption tax and a steep inheritance tax.[117]  He notes that "Rawls advocates bequest or inheritance taxes, on the other hand, 'not to raise revenue . . . but gradually and continually to correct the distribution of wealth and to prevent concentrations of power detrimental to the fair value of political liberty and fair equality of opportunity.'"[118]  This rationale is assumed to be consistent with Rawls's second principle set out above.  McCaffery further clarifies that Rawls is rather modest in his aims: he does not seek equality of result or outcome, but rather is more concerned about excessively unequal starting points.  McCaffery considers this relatively moderate position is "within a characteristically American liberal egalitarian tradition."[119]

 

            Having set out the basic liberal egalitarian scheme and accepting them, McCaffery seeks to establish that an estate tax is contrary to such liberal "first principles."  He advances several criticisms against the estate tax while accepting the "moral and ethical bases of liberal Rawlsian egalitarianism (of course, without explaining why they should be accepted in the first place).[120]  First, he states that the "income-tax-plus-estate tax system undercuts its own best theoretical support."[121]  By this he means that the gift and estate tax system actually encourages large and frequent inter vivos gifts, which is opposite to the goal of alleviating unequal starting points.  A second criticism is that wealth transfer taxation cannot, as a practical matter, support the egalitarian ideal.[122]  His reason for this is that the popular demand for exceptions to a confiscatory tax reflects "deep-seated" human motivations to save and transfer wealth inter-generationally.[123]

 

            In addition to these relatively practical criticisms, McCaffery seeks to argue against the estate tax on "purely liberal grounds."  However, even here, he brings in a pragmatic bent to the argument by stating that an improved estate tax is still inappropriate in a non-ideal world, stating that "[n]either of the background conditions of the liberal egalitarian, equal-opportunity model -- equal initial entitlements and just social institutions -- materialize in the real world."[124]  It is difficult to see how this is different from the pragmatic argument that the estate tax just does not practically work.  What is useful in this section is McCaffery's acknowledgment that the "fact of ongoing inequalities ironically makes the role of wealth transfer taxation more complex and more contestable than it might at first appear."[125]  This is a welcome acknowledgment that something near to omniscience may be required to avoid unintended consequences.  For example, as he notes, a confiscatory estate tax would discourage savings and capital investment, and encourage wasteful spending, which in the end may make the less well-off even worse off because of the decreased capital's impact on employment.

 

            One response to McCaffery's article was fairly heated.  Charles Davenport, in a letter to the editor, criticized the entire scheme.[126]  His primary objection to the article was that it presupposed that savings was morally superior to consuming, asserting that McCaffery was converting an economic question into one of "moral goodness."[127]  After raising some good points about whether public opinion can produce an effective tax policy (which are actually practical issues), he concludes by stating:

 

Taxation is not a question of morality.  Rather, it revolves around administrative, distributive, political, and economic issues.  To call one alternative moral and thereby imply others are immoral puts an aggravating and dividing edge on the policy arguments, a result that does not seem moral to me.  Maybe the description of pragmatic questions as moral ones is, do I dare say, amoral.  No! No! Maybe I misspeak?  Maybe I mean immoral?  I certainly do not mean moral.[128]

 

         Rhetorical effectiveness aside, this is not an argument.  From a starting point, on what basis does Mr. Davenport determine that an "aggravating and dividing edge" on an argument is itself immoral?  If he is assuming that causing aggravation is immoral, any number of people, perhaps McCaffery himself, could use the same standard to call him immoral.  The objection sounds more like a dogmatic defense of dogma.  In other words, because McCaffery dared to raise the issue of morality (in a fairly timid way at that, in my opinion), the response is a loud "No!" without reason.

         

         The ipse dixit aspect of this objection ignores the underlying assumptions.  By mere assertion, questions of distribution are defined as not ones of morality.  If someone seeks to understand why it is permissible, yea, why it is moral, to take money from one person by force of law and give it to another, they are not to ask a tax policy specialist.  Then who else should that person ask?  Davenport would not have us ask the general population through polls (a position he ridicules earlier in his letter).  Presumably, then, one should ask a different sort of expert:  perhaps one who has no acquaintance with tax policy, politics, or history.

         

          While Mr. Davenport's letter may not be particularly helpful, a similar but much longer critique was presented by Eric Rakowski.[129]  Even so, the critique seizes upon the question of morality and seeks to dismiss it as out of hand:

 

I further contend that some of the crucial premises on which he relies in defending the abolition of wealth transfer taxes—most especially, the claim that work and saving are objectively good and that extravagant consumption is objectively bad—have no place in leading liberal theories and should not command allegiance.[130]

 

         Although Rakowski rejects McCaffery's use of objective standards, he does demand "a more compelling moral argument. . . ."[131]  What is interesting is that as Rakowski criticizes McCaffery's argument that wealth transfer taxes are wrong because people tend to reject them, he uses an argument that might come from a libertarian:

 

[E]ven if one somehow managed to compile an exhaustive list of people's reasons for rejecting wealth transfer taxes, that list could not tell us which (if any) of the majority's reasons is morally compelling.  No justification can avoid making moral claims about how social resources and opportunities should be divided up; merely reporting people's claims is not enough.[132]

 

          It is a good argument, one that directly attacks positivism.  As Hume pointed out centuries ago, an "is" does not prescribe an "ought," and just because you choose to do something does not make it right.  However, the same argument can be used to oppose the imposition of the wealth transfer taxes in the first place. 

          

          Rakowski clearly states what is at stake in the debate.  McCaffery's use of objective standards, for instance, the idea that savings and capital formation is good and flagrant consumption is bad, is at odds with liberalism:

 

This claim . . . sits ill with political liberalism, which is inclined to leave the fostering of individual virtue to the private sphere rather than make it a public policy.  Liberalism's rejection of the notion that the state is an apt religious or moral tutor historically has been one of its defining features, and it is one that most liberals wish to preserve.[133]

 

          No doubt many conservatives wish that this statement were true.  The list of moral statements invoked by liberals is long, including some like these from Michael Graetz:

 

"Tax equity requires that tax burdens be correlated with people's ability to pay."[134]

 

 Or,

 

"The goal of providing a basic income level to poor workers after their retirement is simply no justification for mandatory social security provisions that require poor workers to shift consumption from the present to the future."[135]

 

         Leaving the apparent inconsistency aside, it seems obvious that different commentators define morality differently.  For one person (as the Davenport letter suggests), it is matter of personal offense.  For another, it is a set of normative rules but not objective standards.

         

        Rakowski's rebuttal to McCaffery itself generated an in-depth response from Liam Murphy.  Although Murphy agreed with much of Rakowski's critique, especially with regard to McCaffery's overgeneralization of what a liberal is,[136] he states, among other things, that his aim is to demonstrate that there is not a prima facie moral reason to confiscate and redistribute gifts and bequests, and that one is not necessary.[137] 

 

            Anne Alstott also offered a fairly detailed critique of McCaffery.[138]              Although much of the critique attacks the empirical evidence relied upon by McCaffery, she devotes a section to McCaffery's attempt to draw a normative conclusion from public belief and practice.  Her objections to drawing such conclusions include (1) the difficulty in determining what the public believes through, for example, opinion polls;[139] (2) the public may not be educated enough for the polls to provide a meaningful basis for a norm; [140] (3) even if informed, "there is no particular reason to think that public opinion necessarily reflects liberal values" (acknowledging that majoritarian opinions may discount views of minorities);[141] and that real-world opinions derived from practical politics are; "virtually by definition" a poor guide to what people would hypothetically decide in the original position.[142]

 

            These objections demonstrate an interesting mix of perspectives.  First there is elitism with regard to public opinion which is contrary to liberal egalitarianism's commitment to democratic principles.  Second, it demonstrates a commitment to give greater weight to the views of an impossibly hypothetical group of reasonable people than that of people in the real world, which also seems contrary to democratic principles.  It almost sounds as if Alstott would prefer a group of scholars, scribes, or perhaps (as did Auguste Comte) an all wise humanistic pontiff to provide the norm.  If so, how is this different from the conservative monarchists who yearn for a strong king?  In any event, I believe it again demonstrates how trying to discuss justice in terms of positivism results in arguments biting their own tail.  Unless we are willing to abandon the search for norms altogether, at some point, self-referential autonomy, whether directly through an individual, or, as with Rawls, indirectly through hypothetical individuals ignorant of their future physical condition, tends toward self-negation.

 

 

Concluding observations.

 

            Once we have adopted the principle of redistribution, we have embraced the Ownership Model.  Regardless of whether this is a good idea, it is clear that this is a departure from history.  Finding ourselves operating under this model, the only standard we can turn to is one of subjective desire derived from a popular vote.  Yet this standard is subject to shifting sentiment and, as McCaffery points out, stubborn resistance to what liberal redistributionists think should be right.  This could well be because the population itself has not fully subscribed to the Ownership Model. 

 

            The debate over tax fairness is inextricably tied up by the unstated conflict of worldviews.  While legal commentators may be largely committed to the Ownership Model view, it is clear that a significant portion of the population considers taxation itself to be theft.  Dismissing these views as ignorant or uninformed will not make them go away.  Even as most liberal egalitarians admit, taxation is politics.

 

            Both the Ownership Model and the Individual Rights Model suffer from some sort of fatal flaw.  The Ownership Model of taxation suffers from the practical problem that people just do not believe it to be proper.  No matter how much philosophy we develop, as McCaffery proposes, people will not buy it.  Taking property from one in order to achieve some egalitarian end simply does not have subjective support of the people.  This is disastrous for a theory based upon democracy.  In addition, the philosophy upon which liberal egalitarianism is grounded is internally inconsistent and self-contradictory.

 

            Similarly, the theories supporting the Individual Rights Model rely too heavily upon undemonstrated preconceptions: was there ever, in fact, a state of nature?  Did people consciously adopt restrictions upon their freedom in exchange for protection?  Such ordered considerations presuppose a set of principles that the theory tries to prove.  Furthermore, grounding a set of principles upon individual autonomy inevitably leads to different principles because individuals themselves are different.  In the end, neither philosophy provides a sure foundation for the various justifications for how we perceive "fairness" to be involved in the idea of taxation—that is, the government confiscation of the fruits of labor and of industry.

 

            The tax fairness debate is similar to a larger debate regarding philosophy.  The more things change, the more they stay the same.  Philosopher Gordon Clark, at the end of his extensive history of philosophy, concluded as follows:

 

The history of philosophy began with naturalism, and, so far as this volume is concerned, it ends with naturalism.  The Presocratic naturalism dissolved into Sophism, from which a metaphysics arose; and the metaphysics lost itself in a mystic trance.  Then under the influence of an alien source, Western Europe appealed to a divine revelation.  In the sixteenth century one group put their complete trust in revelation, while another development tuned to unaided human reason.  This latter movement has now abandoned its metaphysics, its rationalism, and even the fixed truths of naturalistic science.  It has dissolved into Sophism.  Does this mean that philosophers and cultural epochs are nothing but children who pay their fare to take another ride on the merry-go-round?  Is this Nietzsche's eternal recurrence?  Or, could it be that a choice must be made between skeptical futility and a Word from God?  To answer this question for himself, the student, since he cannot ride very fast into the future and discover what a new age will do, might begin by turning back to the first page and pondering the whole thing over again.  This will at least stave off suicide for a few days more.[143]

 

         Although Clark's observations sound depressing, he in fact was optimistic that at some point philosophers would revert to first principles.  I suspect that today's social engineers will likewise continue to fail to reach utopian fairness until they do the same.