Taxes & Profit

Thief (soundtrack)

Thief (soundtrack) (Photo credit: Wikipedia)

One of the rather useful aspects of philosophy is that it trains a person to examine underlying principles rather than merely going with what appears on the surface. Such examinations often show that superficially consistent views turn out to actually be inconsistent once the underlying principle is considered. One example of this is the matter of taxes and profits.

One of the stock talking points in regards to taxes is that taxes are a form of theft. The rhetoric usually goes something like this: taxes on the successful/rich/job creators is taking the money they have earned and giving it to people who have not earned it so they can get things for free, like food stamps, student financial aid and unemployment benefits.

Under the rhetoric seems to be the principle that taking the money a person has earned and giving it to those who have not earned it is theft and thus wrong. This principle does have considerable appeal.

This principle, obviously enough, rests on the notion that earning money entitles the person to that money and that not earning the money means that a person is not entitled to it. Simple enough.

A second stock talking point in regards to wages for workers, especially the minimum wage, is that the employers are morally entitled to (attempt to) make a profit and this justifies them in paying workers less than the value of their work.

Not surprisingly, those accept the first talking point also accept the second. On the face of it, they do seem consistent: the first says that taxes are theft and the second says that employers have a right to make a profit. However, these two views are actually inconsistent.

To see this, consider the principle that justifies the claim that taxing people to give stuff to others is theft:   taking the money a person has earned and giving it to those who have not earned it is theft and thus wrong.

In the case of the employer, to pay the worker less than the value of his work is to take money the worker has earned and to give it to those who have not earned it. As such, it would also be theft and thus wrong.

At this point, it might be objected that I am claiming that an employer making a living is theft, but this is not the case. The employer is, like the worker, entitled to the value of the value she contributes. If she, for example, provides equipment, leadership, organization, advertising, and so on, then she is entitled to the value of these contributions.

Profit, then, is essentially the same thing as taxing a person to take their money and give it to those who have not earned it. As such, it should be no surprise that I favor justice in regards to both taxes and wages.

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