Three Unconvincing Arguments for Higher Taxes on the Rich

Most of the popular moral arguments for taxing the rich at a higher rate than the rest of us are unconvincing. In fact, I’d say the only convincing one is simple: taxing the relatively rich at a higher rate to, for instance, fund transfers to the relatively poor harms the relatively rich less than it benefits the relatively poor. (Although even this argument isn’t a slam dunk—for instance, if it turns out that high taxes on the rich slow economic growth, a concern for the long-term material welfare of both the present-day poor and the future poor would speak against such taxes.)

Here are three unconvincing arguments:

1) The rich make use of public infrastructure and so should pay their fair share.

Elizabeth Warren makes an argument along these lines:

“Nobody in this country got rich on their own. They relied on infrastructure we all paid for, employees we all paid to educate. So if you're successful, good for you—now pay it forward so everyone has a chance at success.”

This problem with this argument is that it doesn’t provide a justification for taxing the rich at a higher rate than the rest of us. If a billionaire makes use of a public toll road, they should pay the toll. The mere fact that they’re a billionaire doesn’t imply that they’re obligated to pay a higher toll than the rest of us.

2) The rich benefit more from the goods and services provided by the government and so they should pay a higher tax rate.

First, it’s far from clear that the rich do benefit more from the state than the rest of us. For instance, while it’s true that a billionaire has more to lose than others if they can’t secure their material possessions, a billionaire is also able to more easily afford private security if needed.

But this reply might move too quickly. Maybe the claim is that society will collapse without the goods and services provided by the government and billionaires will lose more than the rest of us in that scenario.

Let’s grant this claim for the sake of argument. The mere fact that someone has more to lose than someone else if they aren’t provided with some good doesn’t obligate them to pay more for that good. Suppose both Fred Durst and I need a ride to the arena for a Limp Bizkit show. Fred has more to lose than I do if he can’t get a ride—he’ll lose his share of the proceeds from the show, while I’ll lose the chance to see Limp Bizkit (which is, admittedly, almost as great of a loss). Still, Fred isn’t thereby obligated to pay more for a ride than I am. For instance, if we end up riding in the same Uber, he isn’t obligated to pay more than half even though it might be nice for him to do so. Similarly, the mere fact that a billionaire has more to lose than the rest of us if a state isn’t provided doesn’t obligate her to “pay more” for the state than the rest of us.

3) The rich have used public infrastructure to make more money than others and so they should pay a higher tax rate.

I find this argument unpersuasive for three reasons. First, it effectively advocates for a punishment for putting public infrastructure to productive use. Second, this reply grants that the rich make a larger economic contribution than the rest of us, which should presumably count toward their payment of their fair share (albeit not in the form of taxes). Third, the Fred Durst counterexample applies here as well. Fred is putting the Uber ride to a more productive use than I am, but that doesn’t imply he’s obligated to pay more for the ride.