Progressive Taxation: Do Low-Wage Earnings Need Wage Taxes?

In the debate over wage taxes, the Federal Insurance Contributions Act (FICA) often comes under scrutiny. While some argue for a more progressive system where lower wage earners are taxed at reduced rates or exempted altogether, the core question revolves around the ethical and practical implications of taxation.

Taxes as a Form of Theft

One notable perspective posits that all taxation, whether progressive or regressive, should be abolished. This view hinges on a fundamental principle that taxes are a form of theft. To quote Jean Noroian, “No wage taxes ‘should’ exist for any wage earner at any level.” Let’s break down this argument and explore its implications.

Force, Property, and Violence

The assertion that taxation is a form of theft primarily centers around the concept of force and coercion. The New Oxford Dictionary defines force as 'coercion or compulsion, especially with the use or threat of violence.' This definition aligns closely with the nature of taxation, where individuals are compelled to hand over a portion of their earnings to the government, either by choice or by force.

Moreover, the concept of 'money they rightfully earned' underscores the idea that the money earned through labor rightfully belongs to the individual. Labor, whether in the form of wages or earnings, is an extension of one's property. Individuals own their bodies and have the right to control how they use their labor to procure money or property. This right to earn and control one’s income is a fundamental tenet of personal freedom and property rights.

Practical Implications

Despite the ethical argument against taxation, it is practical to consider the role of government in society. Would a government with no means to raise revenue be viable? Is it fair to expect low-wage earners to subsidize government mismanagement? These questions are at the heart of the debate over wage taxes for low-wage earnings.

A Case for Progressivity

While taxes, in principle, should be abolished, a more practical approach might be to implement a progressive taxation system. Lower wage earners could be taxed at reduced rates or even exempted altogether. This idea is supported by the benefits that a portion of the population derives from government services, such as social security and Medicare (both of which are funded by FICA).

Similar to the original intent of FICA as an insurance policy for living longer and avoiding running out of savings, a progressive system can provide targeted support to those in need while still ensuring that the wealthy contribute more. This approach can address inequalities and provide a safety net for those who might otherwise struggle to afford essential services.

Conclusion

Whether one supports the abolition of all taxation or the implementation of a more progressive system, the debate is rich and multifaceted. From the perspective of force, property rights, and the practical needs of a society, the question of wage taxes for low-wage earnings remains a critical area of discussion.

Key takeaways include:

Taxes as a form of theft and coercion Personal property rights and labor Practical considerations of government financing Benefits of a progressive tax system for low-wage earners

As the discourse on taxation continues, it is essential to consider both ethical and practical implications to ensure a fair and effective system for all.