Choosing To Be Taxed is a Rational Choice

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Recently I was looking for a place to live and was reminded of the “veil of ignorance” as popularized (?) by John Rawls in A Theory of Justice. If you had to choose where to live from the “original position” (one presumes missionary, but I could be wrong) from behind a veil of ignorance – that is, you did not know what status you would have in society– where would you choose to live? In a country where a few have wealth? Or in a more egalitarian society? Keep in mind that you have no choice of what rung of the societal ladder you will be perched upon. Rational minds go with the egalitarian society. It is the safest choice because even the lowest of the low in such a society will be better off than most people in a very unequal society. Better to be on the dole, in other words, than on the street.

If you pose this question in a classroom there is always a dude who wants to gamble that he will end up in the 1% and chooses an unequal society. He is confident that he will wind up on top because he is a good guy and a business major taking Introduction to Philosophy because he heard it would be easy. In this thought experiment there is no moral dimension to being poor, since it is randomly assigned, yet it is quite difficult to explain this to American students. It takes some imagination, in other words, to think of a place where the poor don’t deserve to be poor. This is, I think, what keeps this particular sort of student from choosing the egalitarian society.

Which brings me to taxes. If you had to choose from behind a veil of ignorance, in the original position, where to live, would you choose a place with high or low taxes? The automatic reaction might be low taxes. Low taxes means more money for me, right? Yet when enacting this thought experiment in reality while looking for a place to live, I found myself drawn to the places in America with the highest tax burdens. The reason: they are almost invariably the best places for a family to live. Better schools, better roads, better parks, better health care, better arts, better police, better services… As a lower-bracket kind of guy, working for non-profits and married to someone working for non-profits, I am happy to sneak into your high-tax district and take advantage of the rich-guy services you require. You can be as snooty as you like to my daughter while she takes advantage of your superior public schools.

What’s more, I think most Americans with families would be happy to make this choice – more taxes for better services. But somehow we have added a moral, or I guess an immoral, dimension to taxes. High taxes are bad, I suppose, if you consider the money completely wasted. Yet, one can see that in the high-tax areas (not to mention high-tax countries with free health care) people live longer, are happier, are smarter, and are currently strolling in a safe park while their kids play on the new swing set. I guess I am saying, with my move, that you should please tax me and in return I will get to live in an awesome place.

Of course, it is possible to both pay high taxes and get little to nothing in return. Take Cook County for instance where the poor pay more and services only trickle down to them eventually. (One only has to note which neighborhoods are plowed after a snowstorm to see where the revenue goes.)

So where did I end up moving? Connecticut, just south of Taxachusetts.

From the National Archives, a 1040 form from 1913. Considerably easier. Also, lower taxes. But note that the rich are taxed at many times the rate of the poor.