GeofCoxAre there any coherent arguments against taxing very high incomes and wealth, to reduce social inequality ?
I don't think so. Three of the main arguments are:
1. Income and wealth belong to individuals - tax is theft;
2. Individuals make better investment decisions than governments or other social bodies; and
3. Unless people keep all or most of the income and wealth they have gained there will be no incentive to work, so everybody gets poorer.
The first argument breaks down because all income and wealth is social in origin - most profit arises from business 'externalities' - unpaid labour in the home, state education, free use of resources, use of public roads and other infrastructure... None of the world's major industries would be profitable if they paid for their use of these free resources.
The second argument breaks down because private investment only goes after financial returns or hobby-horses (like space rockets) not wider priorities with no quick investment returns (like education, home insulation, rewilding) - and a lot goes on socially useless investment in assets like housing just to extract rents - a disutility for almost everyone.
The third argument is disproved by history. In the 'Trente Glorieuses' - the 30 years or so after the war - marginal tax rates on both income and property were 70-90%, even in the US - but these were exceptionally hard-working years, with high economic growth, improving living standards, better education, more caring societies, etc, etc... When taxes were reduced from the 1980s on, social progress began to reverse.
Ted Spence