The rich didn't become rich in a vacuum. They operated in a social environment that provided them with infrastructure, resources, and markets that made their wealth possible, so it is appropriate that they contribute to maintaining, sustaining, and furthering certain aspects of that social environment to some proportionate degree. What counts as proportionate can be negotiated. But the need for incentives and the work done (and time expended thereby) by the rich also need to be taken into account, and the classical Marxist conception of labor is too narrow for that.

The rich didn't become rich in a vacuum. They operated in a social environment that provided them with infrastructure, resources, and markets that made their wealth possible, so it is appropriate that they contribute to maintaining, sustaining, and furthering certain aspects of that social environment to some proportionate degree. What counts as proportionate can be negotiated. But the need for incentives and the work done (and time expended thereby) by the rich also need to be taken into account, and the classical Marxist conception of labor is too narrow for that.

I agree with Karl, except I think he may be giving the super-rich too much credit for their efforts. If your only goal is helping yourself, you might more readily, with some luck, become the head of an organization or even possibly rich, when those who are looking to do good, and aren't always looking for an angle, a way to promote their interests just for the sake of themselves, carry the actual burden. The world does not need oligarchs. They need to take advantage of everyone else. If the only 'incentive' is to get rich, that goes off the rails really fast.

Compare the distribution of income now to the 1890s. Not so good, either of them. But between those times, taxes have been higher and yet the economy grew. We don't need oligarchs.

This question reminds me of the adage that history is written by the winners.

I do not believe there is an absolute answer regarding whether it is right to tax the rich. The rich will say, "no," and the non-rich will say, "yes." The answer will be imposed by whoever is in power.

An imposed answer is not necessarily a true answer. Recall the "How many fingers am I holding up, Winston?" scene in Orwell's 1984.

I agree with you that an imposed answer may not be true. However, there is no objectively determinable "correct answer." The parameters are all qualitative. The imposed answer is the one we will live with, right or wrong.

As John Locke and others have pointed out, taxation is just and necessary when used to defray legitimate costs of running the State. People receive benefits from having a government and should pay a fair share of the costs. It is, however, unjust to tax people without the means to pay, or to tax others at a greater rate simply because they can pay. Nor is taxation for social purposes other than the legitimate costs of government justifiable (an idea coming from German socialism), except in extreme emergencies, e.g., famine or war. The idea that "the rich" should be exempt from taxation is an idea rooted in the disproved belief that existing accumulations of savings are essential to finance new capital formation, thereby creating jobs for the non-rich, whether or not they produce marketable goods and services (a principle of Keynesian economics). As Dr. Harold Moulton demonstrated in "The Formation of Capital" (1935), new capital formation is better financed by the expansion of commercial bank credit, creating money backed by the present value of the future marketable goods and services. Instead of using the accumulations of the rich as collateral (which is what savings are usually used for, not direct financing), Louis Kelso recommended capital credit insurance and reinsurance in "The New Capitalists" (1961). It is unjust to tax the rich at a greater rate than anyone else, and it is unnecessary to exempt them from paying their fair share.

Michael D. Greaney RE: "It is unjust to tax the rich at a greater rate than anyone else, and it is unnecessary to exempt them from paying their fair share."

I agree in spirit with what you said in your answer, but this quotation therefrom gives me pause. It seems to me that paying the "fair share" for the rich may require taxation on an increasing scale rather than at the same flat rate. As one gets richer one is able to take advantage of more public goods and resources or otherwise benefit from the State in a way that is more than the proportional measure of the increase in wealth.

Granted. I was unclear. The classical principle of distributive justice (not the socialist version) under which taxes should be levied is based on equality of proportion. Thus a fair — just — share of taxes would be the same tax rate applied on all income for everyone above an amount required to live a decent life. A progressive tax rate can be justified under the principle of double effect (the anticipated good outweighs the unintended evil) in emergency situations, but not otherwise. If someone who is non-rich pays 10% above (say) $30,000, then the rich pay 10% on all income above $30,000. The sole purpose of a tax system is to raise funds to defray the legitimate costs of government, not engage in social engineering.

I take it the legitimate cost of running the State would include policing. So then I would plump for a trade-off: spend some of that cost on a bit of social engineering and culture instead to achieve a similar net effect. First bread. But then circuses instead of prisons. (That's the cartoon version, which admittedly requires some bedeviling with details.)

Thank you for your wonderful answers.

I would like to point out some aspects either that I had in mind when asking the question or that came to mind as I went on reading the answers. I shall refrain from elaborating on these aspects, however, otherwise I'd be answering my own question, whereas what I want to do is provoke you further so it's still on you to elaborate:

(i) Preventing the rich from getting richer (i.e. correct some alleged market failure that allows the rich to get even/ever richer).

(ii) Fighting inequality without first questioning whether inequality is, either in itself or always, bad.

(iii) Ressentiment and slave morality.

(iv) The rich's (inherent, inescapable, and so on) lack of character (which for some could explain their being rich in the first place).

(v) A so-called proportionate duty to give back to society, but if any, at what kind of mathematical proportion (e.g. polynomial or exponential).

(vi) Positive and/or negative externalities from the fact that the rich are (perhaps too much) richer than everybody else, and how this plays out differently, if at all, in equal as opposed to unequal societies.

Other than an object of envy and an object of the greed of others, what is the basis for suggesting that we have some justified claim on the wealth of those around us?

If, we all have similar opportunities, and you do something that causes many in our society to give you their money in return for your product .... does that automatically make you a just target for my envy and my greed?

If I make 50 thousand a year in our society and you find a way to make 50 millions, am I suddenly entitled to part of your wealth?

Of course, the answer is apparently YES!

We have long felt that there is a "social" component to wealth as well as a "private" component.

Your wealth is yours, and in some way, your wealth is also OURs.

Figuring out the proper balance defines a just society.

You just brought a lot of clarity to this, Stephen Martin Fritz . In the end, it’s all about who’s entitled to what. Now, one thing that really bothers me is, and I’m always speaking philosophically (theoretically, hypothetically, &c.), if I pay $ 10,000 in taxes and the next person pays $ 1,000,000, what does it matter that I pay 50% of my income whereas they pay 10%? If the tax system allows me to pay 10% of my income so long as I am able to pay $ 1,000,000, what’s wrong with it? Does the tax system needs fixing, or does something else? This being of course, the social mechanisms that allow for such tremendous concentration in the first place. Otherwise, let’s say we ‘fix’ the tax system so that whoever paid $ 1,000,000 now pays $ 5,000,000. Down from $ 9,000,000 they now have a disposable income of a ‘meager’ $ 5,000,000 (let’s say such a result could be achieved, which it probably couldn’t anyway). What is accomplished? Is this a more just society? Is the playing field now level? Did we get rid of income concentration? Wealth concentration? Have we put an end to structural differences that curtail quality of life for the poor and slash their opportunities? Probably not. But then we can rely on the soothing consolation that the government has $ 4,000,000 more and will (efficiently?) transfer say, $ 1,000 to me, which gives me $ 11,000 disposable income as opposed to the $ 5,000,000 of my fellow, wealthy being.

I agree with Mr. Fritz' analysis based on the premise, " If, we all have similar opportunities, and you do something that causes many in our society to give you their money in return for your product .... "

However, that premise does not exist in many situations. Wealth can come from tax maniputlation, both domestic and international. Wealth also comes from a taxation system that is specifically designed to favor certain classes of people. The news headlines are replete with reports of wealth generated on the backs of the nonprivileged. Income inequality is now greater than ever. In many cases CEO compensation is out of proportion to company performance. There was even one study that suggested that over the study sample that CEO performance was inversely proportional to the price of the CEO's house.

There are people who use the label "socialist" successfully in order to divert attention from the facts.

Robert Cogan

Dear Mr Cogan, I believe it’s not exactly wealth comes from tax manipulation, it’s tax manipulation comes with wealth accumulation. There’s worldwide talk going on about how the tax system is to blame for the ridiculous level of inequality that’s blossoming everywhere. How the system transfers money backwards from poor to rich and tolerates the latter’s fooling the taxman. Part of the criticism is germane, but in the end it’s due to beget a worse tax code instead of better. By fixing the tax code the wrong way (out of ressentiment against the rich), a country forfeits the opportunity to pursue a more workable and effective system. Is the wealth of billionaires such low-hanging fruit you can just walk up there and fetch it? We have to ditch the illusion that taxation will ever allow us to transfer any wealth. That’s a misconception. It could have been true centuries (maybe, decades) ago but with the impressive mobility of today? Tax them as you may (wealth tax or no, tax breaks or no), they’ll still get ever richer. They’ve learned how to do that that’s why they’re billionaires. IMHO we have to think outside the tax box on this one.

Dr. Tripodi,

My view as to "... it’s not exactly wealth comes from tax manipulation, it’s tax manipulation comes with wealth accumulation" is that both are true. There is certainly abundant evidence. There are many parameters and interactions. There are cases that exemplify all of the opinions expressed above, some more than others. I believe that trying to come up with an answer that would fit in one page or in one shelf of books in a library is somewhat akin to developing a unified field theory.

Leandro Tripodi The example you use you seem to suggest that there is something in THE SYSTEM that allows some people to make more and others to get less. But it may not be anything in the "system" at all. It may be in the genius or capacity of the person.

If you work twice as hard as I do, and you earn twice as much, should you be forced to pay twice the amount in taxes?

What you get from the State in protection and services has not doubled. You are being punished for being a harder worker.

But the theory of Dual Morality says we have two moral systems within us that allow us to see RIGHT-and-WRONG in two different ways about everything.

In one of our internal moral codes we strive for equality in all things. So the answer would be that it is RIGHT to tax you doubly.

You earned more and should pay more. You should not be allowed to accumulate too much more than your fellow man as INEQUALITY in inherently evil.

Our other internal moral code strives to DISTINGUISH and looks for MERIT.

When seeing the world in this outlook we feel that those who do more should get more. We believe anything we do (legally) that sets us apart and above others is meritorious and that we rightly deserve praise. That INEQUALITY can be good. That we should seek the better people and follow their lead.

Our two internal moral systems keep us internally conflicted and lead to conflicts outside ourselves as well. They are represented politically by LIBERAL political parties that emphasize equality and CONSERVATIVE political parties that emphasize STRENGTH and MERIT.

Thank you Stephen Martin Fritz for letting us in on a bit of your Dual Morality theory. I must confess I sometimes find myself very much torn between the two stances on inequality you refer to in your message. And both are in me — that’s for sure.

I know this isn’t your main point, but I very much believe there are some elements in the ”system“ that allow for unwarranted accumulation quite beyond the threshold of healthy competition. We don’t have to delve into any ugly details: let’s stick with a rather straightforward example, which is that in many countries, some regulatory (e.g. antitrust) bodies may be exposed to capture with the result that their regulation ends up reinforcing some of the trends that these bodies were designed (and mandated) to offset in the first place.

Of course regulation itself is predicated on the assumption that no one should be given an unlimited advantage which for merit purists could be unacceptable.

Some passionate and completely logical positions are not informed by real world experience.

Have you ever been in a company which could solve a potential customer's problem in a much more effective manner and who had to compete against another company which was entrenched and well-connected? Experience shows that there is NOT a one-to-one correspondence between high-quality hard work and reward. Assigning labels such as liberal or conservative is nothing more than a distraction from empirical data.