Reclaiming fairness

The contemporary understanding of the word “fairness” in the context of human relations has come to bear little resemblance to the actual meaning of the word.

The Oxford English Dictionary defines “fairness” in this context as “equitableness, fair dealing, honesty, impartiality or uprightness.” Unfortunately, when people – especially politicians – use the word today, this is rarely what they mean.

Take, for example, tax policy, specifically the federal income tax in the United States. Politicians and others who laud the “progressive” structure of the tax code, which requires people who earn more to pay a greater portion of their income in taxes, are in fact lauding a system that is far from equitable or impartial.

“Progressive taxation” does not treat all citizens equally; instead, it demands increasingly larger portions of a person’s income as he or she contributes more to society by producing goods or services.

Even a so-called “flat tax,” in which all would pay an equal portion of their income in taxes, would not truly be equitable because it would demand an increasingly larger payment as a person becomes more productive.

University of Rochester economist and Slate columnist Steven Landsburg has characterized the issue like this: “There’s nothing equitable about a system that imposes different obligations on essentially identical citizens.”

This, of course, means that if we must have mandatory income taxes, the only fair kind would be what is known as a “head tax,” in which all taxpayers would be responsible for making the same size payment.

For a society in which progressive taxation is the norm and flat taxes are seen as radically capitalistic (and, therefore, bad), it might be difficult to conceive how a head tax could be remotely fair. However, when we evaluate it against our definition, we must conclude that it is indeed equitable, impartial and, thus, fair.

It’s worth asking, though, why people could ever have come to consider schemes like progressive taxation and flat taxes to be fair in the first place.

I think the mentality can be largely explained by a failure to distinguish between the types of wealthy people in the world and a lack of historical precedent for the noble type until recent times.

For much of human history, the primary holders of wealth were political rulers, who almost invariably acquired their wealth through the use of force, whether they seized the products of their subjects’ or their vanquished enemies’ labor.

Since the advent of the Industrial Revolution and the attendant spread of capitalism, however, the primary holders of wealth in free societies have tended to be people who earned their wealth through the free exchange of goods and services with others.

As this new kind of wealthy person became increasingly common in the 19th century, it must have been difficult to make the distinction between the new sources of wealth and the ancient source of wealth known as theft.

Thus, while it would indeed be fair to seize the assets of people who become wealthy through the use of force and to redistribute said wealth to the poor (as the legendary Robin Hood did), it makes no sense to treat people who have earned their wealth through capitalism in the same way.

Progressive taxation and flat taxes aren’t remotely fair. It’s time to right the wrong of treating capitalists like kings or conquerors. It’s time to reclaim the meaning of fairness.