Do we own our pre-tax income?

Posted by Christie Malry on December 18, 2012 at 11:23 pm

Ritchie tries to explain why he believes that all your income are belong to us:

the idea that we own our pre-tax income is just that: an idea. That does not mean it is true, and the contrary is, in my opinion, correct. We actually only own our post tax income: the tax we owe must belong to the state. If it were not then we could not enjoy society as we do.

Tim has already shown that this is pitifully bad philosophy. But it's actually worse than Tim makes out.

Firstly the structure of Ritchie's argument is, from first principles, a logical fallacy. His argument amounts to:

  • A is an idea
  • Ideas need not be true
  • Therefore ¬A may be true.
  • Therefore ¬A.

Ritchie stamping his foot and protesting that his point of view is better than everyone else's still doesn't make it true. And it is vulnerable to people being able to argue from first principles that we really do own our pre-tax income.

And that's where our second argument against Ritchie begins. Because I believe you can argue from first principles that L Murphy and Nagel (and O'Neill) are wrong: you do own your pre-tax income:

  • Via Occam's razor. It must be simpler for your pre-tax income to be yours than for it to belong to the state only for a portion of it to be gifted back to you.
  • The L Murphy/Nagel/O'Neill argument is as follows: You only have your income at all thanks to the property rights which are enforced by society and a system of government, including taxation. Therefore that portion of your income that relates to taxation cannot be said to be yours, because without government you wouldn't have any property rights, and therefore no property at all. But this relies upon a view of rights as a social construct. I don't think we view rights in this way. We tend to view rights as universal. If rights are merely a social construct then many of the things we hold as central to our current system of rights may turn out not to be rights in the future. A universals approach to human rights would build up a system of human rights from basic first principles, such as freedom. And you could argue, using this approach, that property rights are a universal right. We have created a social construct, government, to aid in the enforcement of this universal right. But you can still believe that it's your right to own your things, even if you have no practical means of enforcing that right in the face of nasty people who would take them away. Taxation is then a specific exception to this fundamental right, solely because it's more efficient for there to be a central means of property rights enforcement.
  • For you to own only your post-tax income, that would mean the state owns your tax. Given that you can elect, with the blessing of Parliament, to alter your tax retrospectively, this is problematic for the L Murphy/Nagel/O'Neill approach.  For example, you can elect to make a charitable donation or pension contribution, reducing the amount of tax payable. Or indeed, prospectively you can avoid paying tax altogether by simply not working. If your pre-tax income didn't belong to you, the contortions necessary to make this sort of transaction possible would be difficult. Whereas if pre-tax income is yours, it's easy.
  • While the O'Neill piece is about companies primarily, it falls over altogether if its position on post-tax income is overturned.

Although I've searched, I can't seem to find any literature on rights as universals. While I studied philosophy at university, I didn't cover political philosophy in detail so I only vaguely recall that this was an approach. I can't remember who it was. I'm sure you can fill in the gaps. It cannot be right that the idea that rights are social constructs is an unopposed thesis.

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