Wealth taxes treat the symptom not the cause of inequality-reinforces market fundamentalism

(Liam, Law/Phil@NYU, https://www.bostonreview.net/articles/liam-murphy-how-not-argue-tax-justice/ , 10-30)

Democratic presidential candidates used to be far less comfortable about advocating higher taxes, let alone proposing an entirely new one. The dramatic transformation of America’s tax system that has brought us to this point is told in Emmanuel Saez and Gabriel Zucman’s important and accessible new book, The Triumph of Injustice. Drawing on their own technical work in economics, the authors present a detailed picture of the distribution of income and wealth in the United States over the last century, along with the history of taxation in all its forms—federal income, corporate, payroll, and estate taxes, as well as state and local income and consumption taxes. Thanks to a flurry of new economic research on inequality in recent years, the basic arc of this transformation is familiar: income and wealth inequality have increased dramatically, while marginal income and corporate taxes have fallen significantly from their highest rates. The two developments, Saez and Zucman contend, are not a coincidence. Despite all this, the book is optimistic. It is not a dispassionate, normatively neutral presentation of a set of options for policy makers to choose from; economists do not usually use words like “injustice.” This is a piece not just of policy analysis but of policy advocacy, timed no doubt for the 2020 election cycle. Some will read the book as nothing more than a how-to guide for soaking the rich. But in addition to its economic analysis, the book contains the elements of a powerful vision of economic justice. Still, there is an unfortunate mismatch between that vision and the way the authors lay out their argument. Their headline claim is that the U.S. tax system is no longer progressive: the rich no longer pay more than the rest of us, as a percentage of their income. But in tying the moral force of their advocacy so closely to the issue of the shape of the tax distribution, instead of to overall welfare outcomes, Saez and Zucman focus on the wrong question and risk playing into the hands of the market fundamentalists they oppose. The moral demands of distributive justice do not compel us to implement this or that particular form of taxation. What matters is how well the tax system promotes just outcomes, all government services considered. Progress on economic justice will not be made by pretending—even for the sake of argument—that there is an entirely separate issue of tax fairness. Instead, we must challenge head-on the market fundamentalism that insists on that, precisely in order to shut down any discussion of just welfare outcomes.