The most obvious reason for not allowing anyone to opt-out from that part of taxation which is devoted to public provision is that no one can be absolutely certain that they will not meet some calamity in the future which will leave them unable to pay. The experience of medical care in the USA shows how easy it is even for the rich to find their wealth shrinking to a point where they cannot get all the treatment they need – the Superman actor, Christopher Reeve, one of the highest paid Hollywood actors, found his resources exhausted within a few years of suffering the injury which paralysed him.
But there is a more subtle reason. The wealthier members of society should always remember that they owe their privileged position to the restraint of the have-nots and the power structures of society which are overwhelmingly weighted in favour of the haves. Individual effort and talent do of course play a significant role
in the lives of everyone, but it is also true that most people’s lives are to a large degree determined by the circumstances of their birth. If you are born into a wealthy family, the odds are you will live the life of the wealthy throughout your life. A person born into poverty will probably remain at the bottom end of the social spectrum. The same applies in varying degrees to those born between the top and bottom of the social pile.
No one needs academic studies to prove the truth and potency of inherited advantage. All people require is the evidence of their own experience. Let any man examine the lives of all those he knows and he will find that most will occupy a similar social position to their parents.
A simple way of understanding how much inherited social position determines lives is to consider crime. Proportionately, the working-class commit crime much more often than the middle classes (and even within the working class the frequency of offending rises with the degree of poverty). That cannot be because the working class are innately less able, intelligent or self-controlled, because we know that many of the middle class are also dim, incompetent and socially inept, yet they rarely end up with a criminal record.
The only plausible explanation for the greater criminality of the working class can be their different material and social circumstances. These are much more precarious than those of the better off. They lack money and the social network which eases access to better jobs, while the opportunities to intellectually develop that are commonly open to the middle class are denied them. Give every person the means to live a middle class life and crime would drop dramatically simply because the press of material necessity would not be there and because the alienation of the poor through being poor would have been removed.
The better-off also need to admit to themselves that there is no moral basis for inherited wealth. The person who inherits money and possessions has by definition done nothing to earn it. The person who earned the wealth, if it has been gained through moral means – and often wealth, particularly great wealth, has not been so gained -has a moral right to it, but no one else. The same applies to non-material advantages such as social connections.
There are, of course, those who attempt to treat inherited wealth as a moral matter. They claim that a person has the right through the consequence of ownership to pass on what he or she has to whoever they choose. That, of course, begs the question of how the wealth was obtained. But let us assume it was achieved entirely morally and by the direct efforts of the person – the best possible case for the supporters of inherited wealth. Even in that instance the effect of the transfer of wealth to others is to create a situation which is manifestly unfair, namely, the establishment of privilege for someone who has done nothing to earn it. Taken at the level of a society, that rapidly results in a permanent class privilege for the haves and their descendants. The fact that the development of hierarchies is an inevitable consequence of human society is neither here nor there when considering whether the consequences of a hierarchy is moral. Clearly the deliberate disadvantaging of some to the advantage of others is not a moral act, any more than enslaving a man is (the group now living who have by far the greatest moral claim to reparations are not the descendants of slaves but the descendants of the poor).
The American philosopher John Rawls in his book A theory of justice resurrected the idea of the social contract which was much in favour in the 17th and 18th centuries. He posed, in so many words, the question “Suppose a group of people were to form a society from scratch, what society would they favour if each person knew nothing about the other people and had no idea where they personally would fit, socially and economically, into the society?” He concluded that the only rational choice would be one in which people had equality because no rational man would chose an inferior position for himself and no agreement would ever be reached which created an unequal society, whether in terms of social status, rights and duties or material circumstances. Note that Rawls did not rule out a man or woman choosing an unequal state – some might do so thinking it would be worth the gamble to have a chance of gaining one of the favoured positions in an unequal society – he merely thought that it would not be a rational or normal decision.
Although Rawls’ hypothetical state (“The Original Position”) was not realistic, his thought experiment does demonstrate that what we have now as a result of the organic development of society is not what many, if any, would risk for themselves if they had the choice Rawls’ offered them.
Why not take away all inherited wealth? All of historical experience shows that such a cure is worse than the disease. Where the state controls (at least in theory) the totality of people’s lives, such as in the Soviet Union, the consequence is privilege and abuse not by the possession of money but by the wielding of state power. There is also something peculiarly degrading about the idea that everything a person does is to be ordered and permitted by the state. A degree of private wealth is a bulwark against state power. The trick is to ensure that wealth does not become too concentrated in the hands of the few, producing an uncaring and oppressive plutocracy.
As for the wealth which individuals create for themselves, to tax to produce material equality would plausibly have a deleterious effect on society generally. If a person is not to benefit from their own legitimate enterprise, why should they bother to make any extra effort or take risks? The obvious answer is they have no incentive to do so. However, that is to take to nakedly a material view of humanity. Even in circumstances where what someone did had no effect on their income, people would vary considerably in their willingness to work regardlessof the material outcome because personalities differ and there are rewards other than material ones such as the approval of others and celebrity. Nonetheless, it is reasonable to assume from the experience of communist societies that the overall effect would be to substantially reduce the individual will to work and take risk.
Of course, absolute material equality is improbable in any society, but the disincentive effect applies incrementally as the personal tax burden grows. Once tax reaches a certain level people either work less or become dishonest and evade the tax. That applies not only to the obvious case of the entrepreneur but to jobs generally, for people will be generally disinclined to take the more demading jobs if the material rewards they offer are not significantly better than those for unskilled and easy employment.
It is also true that Man being a social animal will always form hierarchies because social animals necessarily organise themselves in that way (if they did not, sociality would never arise because the members of a species would be in constant antagonism to one another and could never reach the point of sociality). Even if all material advantage was removed there would still be the advantages and disadvantages of genetic inheritance, the differing qualities of individual parents and pure accidental circumstances, such as the work available at a particular time and place, to create a socially layered society with patterns of dominance and dependence.
But that does not mean that societies should simply be allowed to develop without any state intervention to ameliorate socially determined disadvantage. Without social provision of necessities the poor are left to live hopeless lives which struggle from day-to-day, while untaxed or very lightly taxed wealth of the most successful results in a plutocracy within a few generations.
Plutocracy at best produces wider private charity – which is always inadequate – and at worst an uncaring attitude towards the masses which sees nothing wrong in allowing them to starve if that is a consequence of the economic circumstances of the society and times or even simply God’s will. Plutocracy is in fact one of the most oppressive forms of society and one of the most difficult to end because it cunningly presents itself as being the society of individual opportunity (“the Ritz is open to all”) and is not nakedly oppressive in the same way that, say, Nazi Germany or Stalin’s Russia was oppressive. Consequently, there is no obvious focus for discontent, no single hate figure and it has a much greater enduring power than an overt dictatorship.
What a society can safely do to narrow the differences in life chances at birth is to act to ensure that all have access to education, healthcare and the means to live in a decent manner. That is the minimum. A society can go further with the greatest public resources being directed at those in the poorest circumstances, for example, more money for schools in “sink” areas. It would even be possible to devise a scheme for those who inherit little or nothing by way of money or possessions to receive a payment from the state to remove to a degree the disadvantage of inheriting nothing.