President Obama often asserts that fairness requires everyone “to play by the same rules.” He then calls for raising tax rates paid by “millionaires and billionaires,” but no one else. Well, Mr. President, you cannot have it both ways.Logically, if we are to enjoy what the Constitution calls “equal protection of the law,” government must treat us equally. But what does equal treatment (everybody playing by the same rules) mean when it comes to taxing income?
Present law imposes a progressive income tax—higher income earners must pay higher tax rates than lower income earners. Proponents of a progressive income tax justify this inequality of tax rates in two ways—equality of sacrifice and ability to pay.
Proponents argue that a progressive tax is needed because, for example, a $100 tax bill is more of a sacrifice to a low-income earner than it is to a high-income earner. But this example, which I think is likely to be true, does not justify a progressive income tax.
Sacrifice cannot be directly measured. If I pay $100 in income taxes, the sacrifice I experience is the significance my mind attaches to the loss, not to mention the effects on me in my particular circumstances. $100 may be more (or less) significant to me than to some other taxpayer. Thus, two people who each pay $100 in taxes do not necessarily experience the same sacrifice.
CONTINUED at FEE. Written by Charles W. Baird.ocrats,
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