This book discusses taxation of the rich mainly in democratic countries when such measure requires the support of the people. It reviews such reasons as the ability to pay the compensation for privileges provided to the rich by the government. It presents results of sociological research that provided a few main categories of support for taxation:
- Equal Treatment [fairness]—Preference for the government treating citizens the same through a proportional or flat tax.
- Ability to pay [fairness]—Specifies that the rich are better able to afford or will be less harmed by a tax increase than the poor.
- Compensatory [fairness]—Suggests a higher tax on the rich is justified because of other inequalities or advantages.
- General Fairness [fairness]—Refers to fairness but not specifically to “Equal Treatment,” “Ability to Pay,” or “Compensatory” conceptions of fairness. These responses are often of the form “because it’s fair” and were employed to justify choices for both Plan A (proportional) and Plan B (progressive).
- Progressive Treatment—Argues for a plan that taxes the rich more or poor less but does not give any reason why.
- Economic Efficiency—Argues that the preferred plan is good for the economy in some way.
- Self-interest—Chooses the plan that makes the respondent better off economically.
Then the book reviews taxation history, trying to answer such questions as to when, why, and how taxing of the rich was implemented. Finally, it provides detailed reviews of taxation use as the tool of social mobilization during wars and as a tool of society stabilization necessary to prevent explosion due to inequality and perceived unfairness of society’s organization.
Part One — Debating Taxation
1. Why Might Governments Tax the Rich?
2. Treating Citizens as Equals
Part Two — When have Governments Taxed the Rich?
3. The Income Tax over Two Centuries
4. Taxing Inheritance
5. Taxes on the Rich in Context
Part Three — Why have Governments Taxed the Rich?
6. The Conscription of Wealth
7. The Role of War Technology
8. Why Taxes on the Rich Declined
9. What Future for Taxing the Rich?
MY TAKE ON IT:
The main reason for taxation in all its forms is the necessity to leave production processes mainly to the private sector. When the private sector creates resources, taxation as a form of robbery is necessary to obtain resources for the unproductive part of the population. The history of the socialist countries in the XX century, in which taxation was not really needed because most of the resources were created within the framework of the top-down government hierarchy, clearly demonstrated that it was not effective in producing goods and services that people need even for survival, let alone prosperity. It is not a new phenomenon. From ancient times to our day and from Egyptian pharaohs to contemporary presidents and prime ministers, the common knowledge is that private business produces wealth.
In contrast, the government hierarchy needs to take this wealth from others to spend. Traditionally, the elite did it with brute force ideologically supported by religious or quasi-religious teachings. However, when such teachings somewhat wear out due to scientific progress and individual use weapons such as firearms and IEDs become available, these traditional methods lose most of their power.
It is evident that contemporary somewhat oligarchical democracy is just a new tool for wealth transfer away from its producers to the governmental elite. It is then distributed throughout the government hierarchy from the elite members at the top to the welfare recipients at the bottom. What is very interesting, and what this book very capably presents, is the process of modern ideological conditioning in the environment of democracy. It shows how this conditioning allows such transfer, how justifications work on the population’s minds, and how emergencies such as wars allow moving tax rates up. Another point that I’d like to make is that increased productivity makes lots of people redundant for production and dependent on welfare handouts, often in the form of meaningless, even if well-paid jobs. The increase in numbers of such people provides expanding base for support of tax increases. However, too much taxes and ideological denigration of producers inevitably decrease the willingness of these people to produce. Why would a mentally fit person start a business, work hard, and use their talents to make something if the fruits of this effort are taken away? It would be much more beneficial and prestigious to use these talents and hard work to get a good place in the hierarchy and then just enjoy a good life at somebody else’s expense.