What's a "Fair Share" of Taxes?
One of the key tenets of the Democrat party, and liberalism in general, is the belief that the wealthy should pay their “fair share” of taxes. It has become something of an all purpose defense of liberal tax policy—supply-side economics is a bad idea because the rich don’t pay their fair share of taxes, tax increases are a good idea because they will force the rich to pay their fair share of taxes, in essence, any tax increase can be justified by the statement that it will make the tax system more fair across class lines.
Certainly, the rich should pay their fair share of taxes—that would be an obvious component of any just society. Deciding what a fair share of taxes is is a much more difficult matter.
Any state requires some taxation. And in any society, the wealthiest will be forced to bear the greatest part of the burden of government, even if tax rates don’t vary by income. And few would argue that it is unjust to require the rich to give a higher than normal percentage of their income to the state—after all, the state needs money (even in the most libertarian countries, the state is responsible for transportation routes and defense, among other things), and it is sensible in most cases to raise rates on the people most able to afford them.
These rates can vary—at times, the needs of the government will require a great deal of money (i.e., during a war), while at other times the government’s needs will be much less (i.e., never, because government expenditures always grow). So there is no set rate with which fairness can be measured—on one side, a fair tax rate, on the other, an unjust one. The parameters of “fair” are always changing.
Some libertarians argue that any tax rate other than a flat tax is inherently unjust. That is, I think, incorrect. It is merely inequitable. It would be better, when necessary, to tax a rich man at a fifty percent rate and a poor man at a fifteen percent rate than to tax both at fifty percent. It is not unjust (by most moral standards) to expect those who can pay more to do so.
The best evaluation of a fair tax rate would be an examination of where the tax dollars spent are going. For example, it is pretty much universally agreed upon that tax dollars spent on national defense are justified—all countries need an army, and it is only just to expect citizens to pay for it, and those that can pay more should. Transportation, too, is a legitimate government responsibility. And welfare, to some extent, is a duty of government—it is an obligation of a just society to help those incapable of helping themselves.
But there are some uses of government money that are very difficult to defend as just. Take universal healthcare, for instance. Leaving aside the open question of whether or not it works, it’s proponents say, basically, that it is a duty of the affluent to pay the health bills of the poor (or irresponsible). Or take foreign aid—does the state have the right to force taxpayers to give money to people in foreign countries, no matter how needy or deserving?
It seems to me that the best measure of a “fair share” of taxes is the way in which the money spent is being used, not the raw numbers involved. If the money being taken is spent justly, then the tax rate is probably fair. (“Probably” because other factors must be taken into account—for example, funding an otherwise just war by taxing only widows and orphans would hardy satisfy “fair share of taxes” requirements). If it isn’t, then the tax rate is certainly not just.
(A note on usage: the concept of “justice” will inevitably vary from person to person. A conservative’s idea of a just government would be a minimalist, libertarian microgovernment, while a liberal’s idea of a just government would be a welfare state.)