Thus says the Lord when opining about the tax breaks the rich get when they donate to a charity. For example, take two people, one in the 35% income tax bracket and another in the 20% income tax bracket and consider the “benefits” they get when they make a $100 charitable contribution.
If each of the individuals itemizes their deductions, they can reduce their taxable income by the full amount of the charitable deduction. Given that the wealthy person is in the 35% tax bracket, their taxes will fall by $35 while the taxes of the hard-working middle class individual will only get to enjoy a $20 tax break. We can talk about whether any deductions should be given in a future post (I don’t believe in deductions for anything), for now I just want to examine the consistency of the Messiah’s proclamation that allowing richer folks to get a larger benefit for the same activity that a poorer person participates in is “unfair.”
But if that is the case, then we have a profound problem. Why? Because the two policies are 100% identical.
If your judgments about social justice and taxation are central to your moral beliefs, shouldn’t you find such an outcome unsettling? We are very powerfully affected by our sense of “fairness” but our sense of what is fair is really hard to reconcile with a rational appeal to benefits and costs. And it should be really concerting that I can manipulate your thinking on what is fair just by rewording the way a policy is structured. Any progressive tax policy suffers from similar inconsistencies. If you are going to give people a benefit for engaging in a particular behavior, that is the same as imposing a cost on people for not engaging in a particular behavior. Similarly, if you are going to penalize people for engaging in a particular behavior, it is the same as not penalizing people for not engaging in a particular behavior. And in each case, your views on what is fair or unfair are highly unlikely to be the same for each scenario, although the scenarios are identical.
So Mr. President, stop speaking with a forked tongue. We all assumed you are intelligent enough to understand this distinction. Is it possible that you have fooled us? Do you not recognize the hypocrisy of your views? Without a more foundational approach to fairness and justice, you are going to find yourself committing similar embarrassments for the next 8 years. What say you sir?
Sounds like Allais’ paradox to me.