Social Justice, Income Tax, and New Worth Tax
Social Justice; a phrase often misunderstood.
Creating a level playing field in a free economy is difficult. Justice to some is an idea to push an agenda. Justice should not just be an idea it is a goal. Defining that goal in simple, clear, understandable terms is the hard part.
Funding government needs a transfer of wealth from the producers to administrators and protectors. In Middle Ages in Europe, the King would assess a tax based on assets to the Nobles. The Nobles would, in turn, apply a tax on the freemen in their domains. Each of these taxes for Administration and Protection.
Taxing of assets supports services for the community. The property taxes for schools is a prime example.
When Income Tax was introduced, it was a tax on the wealthy. Needs of the Federal Government expanded with; population and services provided.
Wealthy people did not get wealthy by accident (except modern day lottery winners). Taxation rules once outlined; are dissected by lawyers and accountants. Immediately an effort to change the rules to protect wealth was underway. Lobbyist, Attorneys, and Accountants are put to work protecting the Wealth.
What about Justice? Shouldn’t those that benefit most from society pay for society? The answer is that is not Justice it is a rationalization. If those that benefit are to pay the taxes then all should contribute equally, don’t all share the same Administration and Protections?
Taxation is about funding Administration and Protection, not equality. Equality is a relative statement used to mislead. Everyone does not equally enjoy the benefits of society.
Equality of opportunity to enjoy the benefits of society is Justice. Society does have a responsibility to provide opportunity. Responsibility and opportunity are vague words.
How to adjust the Justice in society? Children are told not to count their chickens. And wait until the game is completed to count our money. The same is true in taxation.
Income is not wealth. Income is the exchange of goods and services in an economy. Wealth is the accumulation of Income. Wealth is income converted to an asset.
Taxing New Worth is the answer to leveling the playing field. Wealthy can use advisors to change the taxability of income. Change used to legally avoid Income Taxation.
If an asset increases in value there is an increase in wealth, but no taxable income. Reducing the cash flow from assets will result in no taxes; until sold. Reclassify this income, taxed at a lower rate.
Taxing Net Worth, there is no avoiding contributing to Society.
In the United States, there are roughly eighty trillion dollars of net worth, concentrated in a small part of the population. Government protects rights and assets.
A three-percent tax on Net Worth would fund the entire Federal Government.
The income not taxed; strivers would have equal opportunity to gain wealth.
The tax on Net Worth put a target on the Wealthy, not possible with the Income Tax. Our Social Contract needs us to hold Government in check. A tax on Wealth can easily turn into a confiscation of wealth.
Limits on spending and taxation must go with the Net Worth Tax. Our Social Contract demands a limited Government. The only way to limit government is to control the funding available to provide for Administration and Protection.