Inequality and redistribution

Posted: 9 January 2012 in Uncategorized
Tags: , , , ,

The new right-wing argument against progressive taxation is becoming increasingly clear.

It’s based on two false premises: first, that concerns about inequality are a recent invention, based on envy and not material deprivation; and second, that taxation only benefits the state itself, not those who receive transfer payments (such as the poor and the elderly) and who benefit from other government programs (such as workplace safety, public education, and a cleaner environment).

That’s the argument made by George Will in his diatribe against government programs that, in his view, end up “supplanting markets as society’s primary allocator of wealth and opportunity.”

What Will fails to understand, from U.S. and world history, is that inequality in the distribution of income and wealth has been a problem since capitalism was invented—and the wealth produced by many was appropriated by a tiny minority at the top. And it’s only gotten worse in recent years. That’s why the majority of people continue to support progressive taxation and the programs taxes finance.

The real problem is that the tax system in recent decades has accomplished less and less by way of changing the unequal pretax distribution of income. And lower-income households are having to shoulder more of the burden, as taxes on those at the top and corporations have declined.

Of course they’re angry. And for good reason. It’s that anger people like Will and the current Republican/Tea Party are trying to redirect, by inventing phony strife between generations and the discourse of class envy.

The alternative is to see the origins of inequality in the economy itself, long before taxes are levied and government programs are financed. That’s a different kind of anger, one that calls for a change in economic institutions, which Will and company are so afraid of.

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Comments
  1. Christian says:

    David,

    Would you agree that Marxists aren’t opposed to competition and merit etc per se. Instead, they are opposed to societal structures that cause such great inequality that a greater number of members of society withdraw from formal society and join the informal society?

  2. David F. Ruccio says:

    On one hand, you’re right, Christian: Marxists aren’t necessarily opposed to competition and merit. But, on the other hand, Marxists’ opposition to societal structures that cause inequality stems from an indictment of exploitation, regardless of whether we’re talking about formal or informal society.

    The point is, the formal structures of capitalism are based on class exploitation, which allows a tiny minority to appropriate and distribute the surplus produced the majority. Ideas of competition and merit often serve to disguise that exploitation.

    But we can certainly imagine other forms of competition and merit—call them socialist competition and merit—that have nothing to do with exploitation.

  3. Sheldon says:

    I often think of what a joke so-called “merit” and competition is in our capitalist society. Think about all the different starting points people start at in their life. A rich kid is given the best educational experiences, goes to the best schools making contacts with people who can advance his career to the greatest heights, versus kids who grow up in crumbling inner cites or Indian reservations. An even playing field? Hell no!

  4. [...] (source) The New Yorker “Occupy Wall Street” cover [...]

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