Wednesday 19 January 2022

Should the rich be subject to a wealth tax?

I frequently hear the sentiment that it is immoral for Governments to tax people. If people want their money to fund a health service, or to alleviate people's poverty and so on, then it should be voluntary. So, in the context of funding a health service, someone on Meta said:
"Forcing others to do things, even righteous things, is not morally sound. That is also basic common sense".
It seems to me, though, that this is confused thinking, perhaps deliberately so. Think of a rich person who is a socialist. He thinks society ought to be a great deal less unequal than it currently is. Now, he personally can give an appreciable amount of his money away and for no other rich person to do so. But, if he is giving away his money equally to millions of people, that won't make much of a dent in alleviating their poverty since his money, being spread out over so many impoverished people, will make little difference to any of their lives.  So it is fairly futile, all that happens is that he becomes that much poorer. So what he wants is for ideally all rich people to give a percentage of their wealth away, not just him alone.

Let's suppose many, if not most, rich people feel exactly the same way.  That is, they are not in favour of giving any substantial amount of their wealth away if they are the only ones doing so.  But they are in favour of giving a percentage of their wealth away should all other rich people do so too. In that case, by introducing some type of wealth tax, Governments would be forcing them to do what they want as a collective whole. 


There's a relevant article just been published today:

Millionaires call on governments worldwide to ‘tax us now’

It says:

The group, which also includes Nick Hanauer, a venture capitalist who made an almost $1bn fortune from an early bet on Amazon, said an annual “wealth tax” on those with fortunes of more than $5m (£3.7m) could raise more than $2.52tr.

That would be enough, they said, to “lift 2.3 billion people out of poverty; make enough vaccines for the world and deliver universal healthcare and social protection for all the citizens of low and lower-middle-income countries (3.6 billion people).”

So rich individuals would be forced to pay this tax, but it is far from immoral since, first of all, it is consonant with what a number of rich people would actually prefer.  But, more importantly, it would alleviate a vast amount of hardship and suffering.  Indeed, I submit it is immoral not to have either a wealth tax or some other measure to help out the most impoverished. 

People might find my following blog post also of interest:

Is there a better alternative to capitalism?


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