Sometimes people argue that it is unfair for a person to pay more in taxes compared to others than they receive in government services. One response to this is to point out that those who earn more (and who are taxed more) actually benefit more from the economy. Another is to note that a good tax system is one that values rather than penalizes work.

Bill Ware writes:

We know that innate abilities are subject to wide variation. IQ, for example, is distributed on a bell shaped curve where 100 is the mean. For those that have an IQ of 120 and above, there are the same number who have IQ's of 80 and below. IQ is classically defined as the ability to learn. The higher one's IQ the greater one can benefit from education and training.

So we have a workforce with wide variations in their economic value related to the education and training they received based on their innate intelligence and other lesser factors, and their compensation varies accordingly. So we have a person with an IQ of 80 who is functionally illiterate, as are 17% of the adult population here in Rhea County, who works 12 hours a day as a security guard and part time janitor in order to support his family, who earns $20,000 a year and has no health insurance. Then we have the young executive whose IQ of 120 allowed him to get a college education, who puts in 60 hours a week to run a successful business who makes $120,000 a year and provides health insurance for himself and his employees.

They both work equally hard, but the one who was able to benefit more from his God given talents makes six times as much as the other because that's how a free market system rates their economic value.

A laissez faire approach would say nothing about this, let the free market determine these wages. A society which sees the moral value of work would question the justice of having two people who work equally hard, yet one earns $100,000 more than the other just because he was born with more talents.

To reinforce the value society places on work, and to compensate for variations in inborn talents over which a person has no control, we have decided that the head of family making $20,000 a year will pay no income taxes, while the head of family making $120,000 a year will pay, after deductions and child tax credits, etc., say, $20,000. This still leaves the latter with five times the money as the former based solely on his IQ advantage.

Reality is vastly more complicated than what Ware describes. IQ, after all, does not solely determine out futures and a person making $20,000 a year may be doing so for many reasons aside from IQ. Of course, some of those reason may be just as much outside their control as IQ is. The general point, I think, remains valid: some people have innate talents that will allow them to earn more money given the exact same amount of time and effort than someone else. Is it just that their tax burden be equal, or is it more just that a person who works hard but cannot thereby make large amounts of money pay less in taxes?

Read More:

• Guide to Ethics and Morality
• News About Ethics\