Chris Bertram has just issued a rather worrisome post entitled, “Squeezing the Rich is Good: Even When It Raises No Money.” In other words, destroying huge amounts of wealth, intentionally, even if it will not increase government revenues, is just and right. I think this is awful and I think just about everyone should agree, even people as or at least nearly as egalitarian as Bertram is.

Bertram gives three arguments to refute the claim that if a high tax on large incomes “would raise little or no money then that should count against it decisively” (all of which, if successful, would generate much stronger conclusions than this).

(1) People in a complex society lack full liberal property rights to their pre-tax income. “They participate in a co-operative venture with others in society subject to certain conditions, and those conditions include one that part of ‘their income’ already belongs to the wider society, via the state.” Bertram notes that libertarians hate this argument, and that he won’t rely on it. That’s good because the argument is plainly fallacious. Even if conventions play a role in constructing property rights, it does not follow that the state has a claim to that property. I addressed a similar claim offered by Philip Pettit here (Property Rights are Conventional, So Libertarianism is False?).

(2) Inequality is “deadly for democracy, and for the equal political status of citizens.” The power and influence that high earners have comes from their income and so we can constrain their income to constrain their power and influence. Now, let’s be clear that the argument requires destroying huge amounts of wealth is justified to preserve democracy. Many libertarians will deny this claim, but I think it’s more illuminating to simply question Bertram’s empirical claim. Having lots of people in a society much richer than others is not deadly for democracy no matter how you slice it. As Jerry Gaus has argued in some detail, there simply isn’t good empirical evidence that democratic societies with relatively high-income inequality or high wealth inequality function less well on various political measures than democratic societies with relatively low-income inequality (The Order of Public Reason, pp. 511-21). There is some positive correlation (as Gaus says: “below average income inequality countries always score high or middle on political rights, while above average income inequality countries scored both high and low, but with the exceptions of Mexico and Turkey, the differences are very slight.”) That said, there’s just no serious measurable difference between the health of democracy in, say, the US and Denmark, that can be clearly attributed directly to the spread of income between the two countries. Bertram and others will dispute this, but I suspect doing so will require appealing to a rather will value-laden and contentious conception of what a “healthy democracy” looks like. I’m merely appealing to standard measures of political participation, electoral process and high functioning government scores from the 2008 Freedom House rankings (you can find all the citations in the Gaus).

(3) Finally, “income inequality makes life worse for the rest of us in real terms.” That is, if some people are much richer than I am, my life is objectively worse off. Bertram’s example is this:

If those on high incomes have too much, they can outbid the rest of us for goods that are intrinsically limited in supply or where supply can’t be quickly increased. If I’m further away from being able to buy a house near to where I work, because house prices are raised in an auction I can’t compete in, then I’m worse off even if my income stays flat. Reducing the purchasing power of the wealthy is therefore good for me … and similarly for many other goods.

I can see no way to construe this argument as successful. Bertram ignores the fact that rich people produce any positive externalities that could outweigh the negative ones, such as investing more in surrounding institutions, creating new businesses, contributing to charity and public works, purchasing new products that later become cheaper for the rest of us, etc.

What’s more, there just aren’t that many goods that are intrinsically limited in supply that would still be sold if there were fewer rich people around. The only such goods that are even candidates are positional goods, but even the supply of positional goods can be increased in the long-run. Further, you can’t solve this problem by making the rich less rich. You can only solve it by ensuring that there is no good that anyone possesses that allows them unequal access to political goods. Even if everyone had the same income, other factors could affect the distribution of positional goods, such as popularity and networking. So it’s just not impressive when Bertram says the following:

Unrestrained income for the wealthy also means that they can commit more of their resources to ensuring that their offspring make it to the top in the next generation, thereby harming the opportunities for the rest of society.

Finally, notice that Bertram thinks the best way to argue that income and wealth inequality make people objectively worse off is to demonstrate that inequality restricts my access to goods and services. But that emphatically does not show the income inequality is the cause of my being worse off. The cause of my being worse off is a deprivation of goods and services. Perhaps if inequality systematically leads to deprivation, then we’d have something like an argument. But whatever it is, it does not vindicate the claim that inequality makes me worse off in real terms. Killing tall people does not make me taller.

I conclude by asking the reader to consider the core point. Bertram is talking about leveling down – using coercive power to destroy the wealth that people have accumulated in a largely voluntary fashion. I find this morally perverse. Even if there are good reasons to do it, there are many good reasons not to, not least of which involves respecting the liberty and dignity of people who happen to have more than others. Moreover, even if people’s pretax income is not “theirs” they still spent a great deal of time and energy generating it. So even on Bertram’s fallacious view about pre-tax income, destroying wealth seems simply odious.

The only way to halfway justify destroying wealth is by appeal to a series of empirically dubious assumptions and assuming they’re ironclad.

If Bertram wishes to destroy people’s wealth and livelihoods, he needs better arguments.