Monday, October 18, 2010

Cohn says the rich are morally obliged to share their good fortune

Yeah, seriously. Jonathan Cohn makes the rather offensive argument in The New Republic that it's not only fair to tax the wealthy at significantly higher rates than everyone else, but that it's the morally right thing to do.

His argument follows on from the book Unjust Deserts by Gar Alperovitz and Lew Daly which makes the claim that luck is the driving force behind any individual's wealth. Not just luck in being a successful entrepreneur or businessman, but historical luck - being born into the right place at the right time. All success builds off the previous innovation of entrepreneurs and inventors throughout history, so without their work, the modern entrepreneur wouldn't be successful. Bill Gates would have been nowhere without electricity, for example. Therefore the wealthy have an obligation to repay a debt to society through higher taxes.

Now I'm not in favor of a flat tax, I have no problem with the wealthy having a slightly higher tax rate than me and I did not support the Bush tax cuts (the expiration of and debate over which is the main source of Cohn's argument). I think there are fair arguments to be made on both sides of whether or not the rich should have to contribute a larger tax burden to society. But for Cohn to argue that it's morally justified that the rich should contribute more is repugnant in addition to sounding a bit petulant.

So what if luck contributes to an individual's success? So what if historical innovation allows modern day innovators to create? Making the argument that a wealthy entrepreneur today is not 100% entitled to his wealth may be a philosophically sound position, but it doesn't logically follow that the rest of society IS entitled to it.

Lottery winners are lucky. In fact they have worked a minimal amount for maximum reward. A lottery winner can spend $1 (which represents approximately 8 minutes of minimum wage work) to win tens of millions. Should he be morally obligated to spread his winnings throughout society? Okay, lottery winnings are taxed as income and I think that's perfectly fair. But should it be taxed at a higher rate than other income? What if I find $20 in the street? Am I morally obligated to share it around with the other passers-by who weren't as lucky as I was in spotting it?

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