Trump’s Tax Act and Rawls’s Difference Principle

There is no real controversy that the Republican tax act will redistribute wealth upwards. Its best friends have persuaded themselves that it will, however, benefit not only the Republican donor class, but the whole country. Most taxpayers will get some tax cut, at least in the first years. Yes, many will become medically uninsured. (That is, they will be “free to choose” between no insurance and insurance they could not begin to afford.) And the cost of health insurance will rise for everyone more than it otherwise would. Still, these and other disadvantages for the poor and middle class will, it is contended, be swamped by the tidal wave of new jobs and other benefits wrought through the economic magic of the supply side.  It will not be a trickle down, but a Niagara. People, especially politician people, can persuade themselves of the darnedest things when those things coincide nicely with their self-interest. 

Let us throw all caution to the wind and make the assumption that this is not wishful fantasy, but reality. The tax cut will benefit the poorest among us. It might then seem that the act would pass muster under John Rawls’s difference principle, which permits measures that increase inequality so long as they benefit the least well off social class.  Would the tax cut in fact be just if it benefited everyone at least a little, but increased inequality substantially?

In fairness to Rawls, it must be said that the Trump tax act wouldn’t really reach difference principle analysis because it would already be disqualified by the lexically prior part of Rawls’s distributive justice scheme: fair equality of opportunity. This principle requires that, in the race for positions of influence and reward in the society, every child must get pretty much an equal start. The chances that Barron Trump will grow up to be a CEO or cabinet secretary and to own a befitting yacht, I conjecture, were already rather better than the chances of the average  blue collar kid. The act tilted the playing field still more in his favor by exempting yet more millions from the estate tax. The ability of the wealthy to get themselves into powerful positions in business is obvious enough. Their ability to assume high governmental positions or to place their agents, friends, or relations into them is now effectively guaranteed by the Supreme Court’s election-money-is-speech jurisprudence.

So the tax act flatly fails Rawls’s fair equality of opportunity test. But let us put that aside and consider the difference principle in isolation – on which the act initially looks better.  At least, it would look better if we make one more gigantic assumption. Let us suppose that the act not only benefits the worst off class but that no alternative tax legislation that was less upwardly redistributive would have benefited that class more. Probably we can find some who believe even this, at least “within the limits of actual political possibility.” My interest in making this assumption is not so much a matter of real world political commentary, however, but of assuming into focus a theoretical question: Should equality concerns sometimes take precedence even over the absolute welfare of the worst off?

Forty years ago, I wrote an article on this topic, "Equality, Solidarity, and Rawls' Maximin," (6 Philosophy and Public Affairs 262.) Those were days when we were unaware that the chief influence holding back egalitarianism would not come from the caution of liberals but from a hard right turn in American politics. (It is interesting to speculate how far this right turn was facilitated by the effective disappearance of the American left after its brief flourishing in the 1960s. How important is it that the only critique of the status quo that penetrated to the Wisconsin warehouse workers was subsidized by Rupert Murdock, the Kochs, or the Mercers? Knowing that something was out of joint, workers were told what it was by Rush Limbaugh or one of his many well compensated clones.) 

Much of the value of historical movements towards economic equality has been in reducing outright misery by raising the standard of living of the worst off groups and the strata just above them. I argued in 1977 and still think today, however, that equality has a value in and of itself and it would be a good thing if living standards were not different by too many orders of magnitude bottom to top. This should, I think, sometimes take precedence even over the welfare of the worst off.

Rawls must himself have believed in the independent force of equality, otherwise he would not have so strongly advocated political equality, equal basic liberties, and fair equality of opportunity.  Justice does not, for Rawls, maximize liberty for the group with least liberty. In A Theory of Justice the liberty principle required “the most extensive basic liberty compatible with similar liberty for others.” In Political Liberalism it became, “each person has an equal claim to a fully adequate scheme of equal basic rights and liberties.” Why an equal right to run for office, to vote, to speak, to associate, to snowshoe? The question almost answers itself: because we are equally human, or, for some political rights, equally citizens. That shared humanity or shared citizenship, without more, requires these equalities of rights and liberties shows the independent moral force of equality.

The difference principle itself displays the independent value of equality.  Equality is the default. It is departures from equality that have to be justified by benefiting the worst off class. Now here is the key question of this post: If equality has enough weight in distributive justice to be the default, how can it be that an inegalitarian program, however much it increases inequality, can be justified by any benefit to the worst off class, however small be that benefit? It seems that could only be so if equality itself were of no value at all. In that case why should it be the default, and why its central position in the other principles of justice? 

Despite a couple of semesters in his classroom and several more teaching about his conception of justice, I am not very good at channeling John Rawls. I think, however, that he might respond here that I misunderstand his project. He was not laboring in the laboratory of theoretical ethics, in which the sorts of arguments I tendered might have some point. He was concerned with the justice of real societies in the liberal tradition with histories, institutions, and public discourse. His principles of justice were designed to be acceptable to rational participants in that discourse. Perhaps in some philosopher’s thought experiment, intuition might call for a small sacrifice in material welfare for the worst off in exchange for a substantial decrease in the wealth gap. Political theory, however, ought be conducted in and for the real world of political institutions and people with political histories.  For that enterprise, the difference principle, unmodified is the right principle.

     

The meta-philosophical issues raised by the Rawlsian distinction between moral theory and political theory are of the first order of importance – but difficult.  Even if the distinction can be clearly drawn and defended, I am not convinced that Rawls was right about the scope of the data within the proper ken of the political theorist. 

To explain, let’s go back to the 1970s. It was then widely contended that any criticism of the difference principle from the left could only come from some base and unworthy source. “I’ll give back my 20 cents an hour wage bump if the boss will give up his $2 million bonus.” That, it was said, is the voice only of spite and envy, not of reason. Reason looks exclusively to self-interest and delights in Pareto optimality. 

This refrain, from the songbook of classical liberalism, misses some important facts about human societies and the social psychology of the beings that live in them. I have in mind some facts that communitarian political philosophies take more seriously than does classical liberalism.  In 1977 I talked about “solidarity dispositions,” a terminology only partially apt. By whatever name, however, our sense of shared membership in society is important. When society is too severely divided those at the bottom will inevitably feel that they are not full members. Even those at the top sometimes concede that it is better to be surrounded by teammates than by flunkies. (Some, of course, really do love flunkies, but even their friends tend to doubt their mental health.) 

Back to the laboratory: There is a sole individual on a distant planet about whom we know only through the newly discovered miracle of hyperspace signal bounding, and we know only a little. Other things being equal, I should always be hoping that A’s life would keep improving. Yes, if A were already living very well, I might be a little envious, but that would not be enough reason for me not to want to maximize A’s well-being.  If I found out that A were a member of a society, I would still be fairly sure that small boosts in A’s well being were to be hoped for.  A great leap that would leave A living much better than anyone else in the society, however, would give me more to think about. Whether it was the right thing would depend upon facts about the society, the ways its members relate, and their social psychology.  

In our society, for better or worse, wealth is important. Beyond a certain point disparities in wealth undermine community by creating sub-communities of great salience for the nature of member interactions, for respect, and for self-respect.  (Disparities in wealth also, inevitably, lead to disparities in political power, but I leave this very important point aside here because, for Rawls, the possibility of any serious disparities in political power has already been dealt with by the prior principles of justice.) 

It is for these reasons that, even if the Trump tax scheme lacked its estate tax component or any other feature conflicting with fair equality of opportunity or equal basic liberties and rights, and even if it had some benefit for the worst off, it should yet be ruled unacceptable as a matter of political theory. It should be rejected because it would dramatically increase inequality for a country in which inequality is already far too dramatic.  

Rawls, to give him the final word, might well agree with the conclusion that the tax act is unjust, but contend that this does not show the difference principle to be wrong. The combined effects of other violations of the principles of justice are at fault for the existing broad inequality. Were equal rights and fair equality of opportunity observed, then there would already be significant limitations on how far the economically blessed would dwell above the rest of us. With those limits in place the difference principle would work just fine. It would be impossible for a small benefit to the worst off to come at the cost of a great increase in inequality because that great increase in inequality would itself be impossible.

I am a little skeptical, but do not rule this out. If we were to take fair equality of opportunity seriously and with a sharp eye to all the real world advantages of the wealthy, perhaps it would put a strict and not very high ceiling on inherited wealth.  With that ceiling in place, the difference principle looks very different. It also makes Rawls more radical than he has usually been thought.