Desert theory and taxing the poor

James Kwak has an article in The Atlantic today about the ideological motivations of the modern-day Republican party. Specifically, he tries to explain why Republicans — the pre-eminent haters of taxation — often suggest raising taxes on the very poor. Kwak suggests, Republicans are believers in just deserts:

The other, even-more-disturbing explanation, is that Republicans see the rich as worthy members of society (the “producers”) and the poor as a drain on society (the “takers”). In this warped moral universe, it isn’t enough that someone with a gross income of $10 million takes home $8.1 million while someone with a gross income of $20,000 takes home $19,000.* That’s called “punishing success,” so we should really increase taxes on the poor person so we can “reward success” by letting the rich person take home even more. This is why today’s conservatives have gone beyond the typical libertarian and supply-side arguments for lower taxes on the rich, and the campaign to transfer wealth from the poor to the rich has taken on such self-righteous tones.

For Republican opinion-makers, I suspect this is actually true. Paul Ryan is after all an avid fan of Ayn Rand, one of the more famous just deserts proponents. Republicans of his ilk are not worried about taxes because they think the government spends the revenue inefficiently, or because they think taxation systems create distortions, or even because they think it “kills jobs.” No, their concern is that, from a moral perspective, it does not give to the very rich what they truly deserve: even more income.

Old school desert theory — including desert as conceptualized by Ayn Rand — regards entrepreneurs as the “producers.” Entrepreneurs are seen as the best and most productive among us, and therefore deserving of the most money. But with the financialization of the economy, they are not actually the ones reaping the most rewards right now. Despite rhetoric to the contrary, it is not enterprising entrepreneurs that are pulling down the big bucks, and then getting it unjustly taken from them. Financiers and the wealthiest of shareholders pull down the truly extreme amounts of income.

Under a conservative desert theory view that regards marginal productivity as the proper way to allocate income, earnings that come from ownership are not deserved. Only earnings that come from work are. The people whom the GOP’s policies actually serve then are not the mega-producers in the entrepreneurial sense; rather, they are financial rentiers.

So in reality, the modern GOP position towards desert is even a departure from extreme Randian ideas about desert. There is at least a plausibly moral basis for giving each what they produce (although I think it is flawed). Giving each whatever they can pull down no matter how they do so completely divorces out the central element of the just deserts view: deservedness. It creates a new, basically amoral, notion of desert that sees individuals as deserving purely because they have figured out a way to pull down huge sums of income, even if they have done so via passive ownership and scheming, instead of hard work.