India’s finance minister this week released a budget that includes, among other things, a five per cent reduction in the corporate income tax. Narendra Modi, the Prime Minister of India, won a landslide election last May...
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- Tax Freedom Day and Morality
Tax Freedom Day and Morality
The Tax Foundation has calculated Tax Freedom Day since the early 1970s, and we thought we had seen every possible criticism of it since. Turns out we were way off.
Professor Thad Williamson of the University of Richmond caught us off guard with his bizarre critique of "freedom." ["No Taxes Would Mean No Prosperity," Richmond Times-Dispatch, April 30, 2007. Also linked to on the Tax Prof Blog.]
He is offended at the very notion that Americans might consider taxes to be a heavy burden, and that we might celebrate when we've finally earned enough to pay them.
In his world, Americans don't fund government to safeguard their rights so that individuals can earn their own living. Instead, government rightly appropriates as much of our so-called earnings as it needs to build an economy that we mooch off.
The reason we have no moral claim to our pre-tax income is that that very income is made possible not simply by our personal efforts, but by our participation in a broader system of social cooperation ("the economy") that is itself made possible in part by taxes and the public action they facilitate.
It brings to mind the Beatles' famous lines from their song "Taxman":
Let me tell you how it will be
There's one for you, nineteen for me
Should five per cent appear too small
Be thankful I don't take it all
Professor Williamson erroneously uses Tax Freedom Day to advance his belief that the government grants us the right to earn income, so we should just be happy with what it allows us to keep.
This is absurd. Assuming Professor Williamson took at least one economics class, he knows the economy is not based on a government's right to our income. Since he has a degree in history, he knows that in the few places where the government did own all the income-the Soviet Union, Cuba and North Korea-widespread poverty was the result.
The Tax Foundation's Tax Freedom Day report never makes any moral judgment about the proper level of taxation and never claims that April 30th is too late, too early or just right. Tax Freedom Day is designed to simply and clearly educate the public, lawmakers and the media about the size of government so they can make informed decisions about government's size in the future.
It especially pains me to see such an out-of-left-field take from my own alma mater, the University of Richmond, where I was a student at the very leadership studies school where Professor Williamson now teaches.
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