The morality of taxation

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The morality of taxation

Postby Silhouette » Thu Jan 04, 2018 2:14 am

So we all know that taxation is theft if you're pro-Capitalist and property is theft if you're anti-Capitalist...

Consider the flat-to-progressive taxation that we currently get in the actual mixed economies that we get in the West though.
The whole point of for-profit business is for the employer to make money from employees - that's the whole incentive. It's the compensation for risking your capital, right? These are the arguments you usually hear.

But that's the thing: given that an employer makes a choice to derive their income from the practice of distributing expenses to employees in such a way that they amount to less than the total revenues earned by said employees (the definition of profit), is it therefore morally justifiable for them to complain when they pay more tax the more the disparity between earned employee wages and employee drawings? Ought they not to be disincentivised from free-loading out of a sense of entitlement - by the only body powerful enough to do so?

What if the employer contributes towards the work that earns revenues? Then why not pay themselves a wage in proportion to the revenue that they actually contributed to making, no differently to the way that all other participants are compensated in proportion to the revenues that they attracted? A difficult balance to judge for sure, but the fairness of such a distribution method could easily be agreed upon by all contributing parties if the transparency and agency existed - and an employer is only going to be rewarded for their ability to hire the most reasonable employees in this respect - ones who will recognise the efforts and results of their employer and respect and allow a higher proportion of earnings whenever deserved. Actual meritocracy.

But surely the employer is entitled to draw from the earnings of their company with private discretion because it is their capital investment that allowed others to earn anything at all for themselves? In the same way that charging rent is charging others for not being as rich as you and not being able to afford their own home, a desire to use capital to add value doesn't only happen to those who can afford to realise it. Ideas for adding value happen to those who can't afford to do so as well - in what way is it a free market if so many are not free to enact their own entrepreneurship? Let's not kid ourselves that real money is in business with low capital expenses anymore (apart from cons of course).
Besides, it is the choice of the employer to risk his own riches by investing it in their company or any other company - nobody is forcing them. Their choices are to spend it on consumables, save it and gain nothing but a feeling of security, or to use it as capital and potentially gain more from it - and just like with any gambler, the highest risk is part and parcel of the highest reward. Otherwise it's just Socialism for the greedy, eh? Of course the rich are going to continue to choose this option no matter how much they are taxed, there's zero risk of tax countering the incentive for the rich to invest. How else are they going to corner and maintain their own dominance?

These have been arguments in favour of hard work and fairness, meritocracy and freedom, and against greed without accountability. All of these are achieved through, if not co-operative partnerships or sole-trading, the simple act of flat-to-progressive taxation (the more progressive the taxation the more one's morality is grounded in the values I have put forward). There is no compromise to competition, quite the opposite - it's just channeled into performance instead of loss aversion (the only justification whatsoever for the level of social immobility that is currently the most rewarded outcome that we see in the current Western economic model). Economies in their entirety cause them to turn out how they do, not just employers, not just one's company and employees, everyone - and taxation is the way to feed back to indirect causes of wealth where drawings and wages are for the direct causes.
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Silhouette
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