Wednesday, January 19, 2011

Taxation and taking

Using the farmer analogy from earlier

Taking some of the surplus of a farmer's crop is not unethical if there is some benefit to the farmer from doing so. If the system which takes of the surplus also provides certain things of benefit to the farmer in exchange, this is called taxation. It is part of a societal contract. The system which provides the farmer with a method for enforcing his contracts and securing his property from theft or damage from others must pay the costs associated with providing those things somehow and it is perfectly reasonable that the farmer should bear part of the cost through taxation. That the benefit does not flow solely to the farmer is not a bad thing, either.

The problem with taxation is not whether or not it is right or wrong. It is necessary and is neither right/wrong nor good/bad in and of itself. It can be abused, however. The main problems with taxation can, I feel, be summed up in two questions.

1; How much taxation is appropriate? Too much taxation and you stifle the individual's effort to improve their personal lot in life which creates a disincentive to strive for something better. Too little taxation and you can't sustain the system.

2; What should taxation support? This is a major contention when it comes to discussing specific programs. When a person feels as if they receive no benefit from a particular program, they may feel like they don't want their money(or their effort/energy/the products of their labor, in any form) used to support that program. This can further be boiled down to "should we(society/the system) do/provide this particular thing?" Even if they don't disagree with an end goal, they might have problems with the structure. Ex. comparing two different universal health plans, one where the government acts as an insurer and one where the government acts as the provider. Even someone who believes universal health care is a great idea might have a preference for one of those over the other, believing one to be superior for whatever reason. Is one necessarily superior? Both have their pros and cons. Are either of them superior to what currently exists in the US? Maybe. Maybe not. I don't know, I can't answer that; it can't be answered without examining which of the available options does the most good while doing the least harm while being sustainable.

But obviously, whichever program is thought to be best will end up being supported through that system of taxation I mentioned. I personally wonder, if we were to figure out what should be provided by a system, what level of taxation would be necessary to support all that should be provided?

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