Wednesday, April 4, 2012

Reflections on Inequality

This short essay by Robert A. Levy, chairman of the Cato Institute, nicely captures in a very few words key libertarian counter-points to the Occupy Wall Street stance on inequality.

Israeli president Shimon Peres reminds us: "By and large, those in the world who placed freedom above equality have done better by equality than those who placed equality above freedom have done by freedom." That observation, apparently lost on the Occupy Wall Street crowd, has a moral component as well: It is more just to reward effort, even if it cannot be proven to benefit the least affluent, than it is to reward the least affluent, even if they exert little effort to improve their status. Moral superiority does not entail punishing the industrious wealthy to sustain the indolent poor.

Further, the top 1 percent of income earners — persons earning more than $343,000 in 2009 — paid 38 percent of income taxes. And that doesn't reflect the nondeductibility of capital losses, the tax on illusory gains due to inflation, and the double tax paid indirectly by shareholders on corporate profits before they're distributed or impounded in stock prices. By contrast, according to the Committee on Joint Taxation, more than half of American households paid zero income taxes. Those numbers are astonishing. Even persons who embrace progressive taxation are hard-pressed to argue that the tax code is insufficiently discriminatory. How far must progressivity extend to satisfy the left's notion of fairness?
 Read the whole thing. It’s only seven paragraphs long!

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