Justice, Equality and Taxes

Justice and equality are excellent ideals to aspire to; since these ideals are offered as the reason why we pay taxes - to collect mandatory tax donations from the rich and use that money to provide resources for the poor so that it's just and equal - nobody can credibly disagree with the need for taxes in a civilised society. The only trouble is, nobody really questions what is really meant by the concepts of Justice and Equality in this context.

Questioning the meaning of legal concepts

Some legal concepts have an automatic effect on a debate, namely to kill the debate. If a concept reflects conduct that is self-evidently good or self-evidently bad, you don't expect anybody to quibble once the magic word is said. An example is the notion of 'fraud'. In law, they say that ‘fraud unravels everything’. You can do pretty much anything you want, really, but the minute fraud creeps in it’s game over. ​

No Court in this land will allow a person to keep an advantage he has obtained by fraud. No judgment of a court, no order of a Minister, can be allowed to stand if it has been obtained by fraud. Fraud unravels everything. The court is careful not to find fraud unless it is distinctly pleaded and proved; but once it is proved it vitiates judgments, contracts and all transactions whatsoever...

Lord Denning in Lazarus Estates v Beasley [1956] 1 QB 702
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​Nothing can be lawful that is tainted by fraud, and activities otherwise lawful will become unlawful if they are pursued fraudulently. It doesn't matter how fantastic your plan is - if it amounts to fraud you can't do that. Someone should have explained this to Bernie Madoff before he rolled out his amazingly successful Ponzi scheme. Obviously the scheme worked, given that it ran for several decades with many happy customers, but unfortunately the deceptive element of the scheme was not considered acceptable by securities regulators, so he ended up in prison. That's the effect of fraud - it will unravel your proposals.

The twin notions of Justice and Equality have exactly the same effect on rational discourse and every-day transactions. The minute somebody shouts ‘what about Justice, what about Equality!’ it’s game over. Whatever it was you were trying to say, before somebody raised the justice and equity points, you will have to stop talking now. There can be no further discussion. Whatever transaction had been entered into must immediately be treated as suspect, regardless of its causes or outcomes. Like fraud, Justice and Equality unravel everything.
 
Take for example the debate about taxes, i.e. the debate concerning whether it’s rational to impose a financial penalty on hard-working folk in order to redistribute their income to better uses. Here’s one way you could see that:

​Taxes are nothing more than a penalty on work. When politicians talk about raising our income taxes, they are really saying that they are going to increase the cost of getting up and going to work each morning.
 
John Tamny, Popular Economics, xxii
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​So, from Tamny's perspective you might say that “taxes are nothing more than a price placed on work” and that the economy will grow if people get to keep more of what they earn, because keeping what you work for is an incentive to work harder and produce more stuff. Before long, everybody will be working harder and producing more, at cheaper prices, so that everyone is better off. Simple as that, really, you might think:

​Economic growth is not only simple, it is also easy to understand. There is nothing mysterious about economics…In truth, nothing is less complicated than the subject of economics, and therefore nothing is easier than economic growth.
 
Popular Economics, xxii
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From that perspective, it does seem unwise to have penalties on work. People should get to keep all the money they earn, except for maybe a small fixed levy deducted to finance roads, bridges and, conceivably, drainage systems. If there’s a penalty on work, people might decide not to bother, and just stay home waiting to be supported by…the taxpayers. Less productivity, less wealth to go round, less economic growth. So far this all makes sense.

But wait, what about Justice and Equality?
 
Immediately the picture looks completely different. First, there are many poor and hungry people out there who would either have to go out to work themselves and root for their own food or rely on private charity, or just die of starvation. That’s obviously not acceptable. Second, there are also many people out there with less stuff than other people, a dastardly phenomenon known as wealth inequality which is obviously not acceptable. Justice and Equality are tools that allow us to take money from those who are earning it, and use it to feed the hungry (Justice) and make sure that everyone has the same amount of stuff (Equality). 

​By this means, Justice and Equality unravel the entire case against taxes. That's because Justice and Equality do not function according to immutable universal principles. The precepts of Justice and Equality tend to reflect simply the speaker's opinions about the moral ideals they think we should aspire to.