On the trade off between the rule of law and lower taxes

The recent Carrier deal has caused some controversies in liberty-oriented circles. For example, The Mises Institute published a defense of the deal, arguing (along other lines, please read the article yourself):

there is nothing inherently wrong with an administration focused on keeping jobs in America — especially if this is accomplished by relieving tax and regulatory burdens.

The point I wish to make here is a general point, so I won’t go into the specifics of the Carrier deal. Among other reasons: I don’t know the specifics of the deal (I don’t know the content and I don’t know how the deal came to pass.) What I wish to do here is to argue the general case on how to view these kinds of tax exceptions.

The point we ought to remember, I think, is that there are a trade offs between two important liberal values, although they are important in different ways. On the one hand, we have the idea of rule of law, the idea that the law is general, not specific, applies to everyone rather than some, and that it’s not designed to favor some because it should serve an open-ended order. Things that contribute to such a legal order are ipso facto prima facie good, things that take away from such a legal order are ipso facto prima facie bad.

On the other hand we have the idea that taxes are bad. Things that lower taxes are prima facie good, things that increase taxes are prima facie bad.

But neither of these things trump all other considerations. Let me give you two examples.

  • Suppose there was a law that said that the taxes on, for example, business started by family members of politicians are automatically exempted from taxes. Would this be a good law?
  • Suppose there was a law that said that everyone has to be drafted and has to serve mandatory military service overseas, except the family members of politicians. Again: would this be a good law?

In both of these questions, the answer depends on the liberty-inspired framework you use to answer the question. If you think the value of the rule of law outweighs the value of individual liberty of those family members (who are, after all, not responsible for the actions of their political family members) than you think these are bad laws. If you think the increase in individual liberty for those family members is more important than the violation of a rule of law principle, than you think these are good laws. My point is not to say how one should determine this, my point is that there are two liberty-inspired frameworks that can justify an outcome, and both of these frameworks are relevant in determining what kind of laws we ought to support.

To make the issue slightly more applicable: is the increased damage on the rule of law (created by allowing a specific exception on the general laws on taxes) larger or smaller than the benefits that allow a company to have less taxes?

Some people have tried to argue by analogy – for example, comparing it to the draft. The problem is that analogies quickly run into the problem of changing the relative values of the two important concepts. For example: is it a good thing that women are exempted from the draft? Yes, this seems like obviously a good thing. Would it be a good thing that male children of politicians would be automatically exempted from the draft? This seems like less obviously a good thing.

Would it be a good thing if white people were automatically exempted from the draconian drug laws? Maybe it would, but maybe that also lowers the chance of getting rid of the drug laws altogether. Different margins matter in these kinds of evaluations.

The wrong thing to think is that all policies are pro tanto good just because they increase liberty on some margin for some people, especially if this allows for the prolonging of bad policies by the current ruling class. Some policies can be bad on some margins and good on others and reasonable people can disagree whether the complete net effect of this is good for all.

Maybe it’s a good thing that some people are exempted from evil laws (such as taxes), but it’s not good that the political class gets to choose who does so. Because those who will be exempted will be those who are connected to the political class. So one can absolutely like lower taxes, oppose politicians’ power to choose who is exempted and oppose that, and still be happy for a company that they got a tax cut. (Unless, of course, the company itself is evil. This is certainly possible if they are partners in, for example, the wars that the USA commits.)

So tl;dr. As I posted somewhere on facebook:

Rule of law and lower taxes are two good things. A president (or important person connected to the ruling class such as the president elect) getting to pick and choose winners isn’t desirable, but a tax break is. A higher tax isn’t desirable, but a rule of law is.

Trying to argue the case based on principle seems wrong. It depends on the margins. In the case of the draft, the margin *against* rule of law seems important enough to say it’s a clear victory for liberty to not have women included.

In the case of tax breaks, this is less obvious and reasonable people can come out on different sides of this, I think.

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The trade offs of Hillary vs Donald

An interesting thing to talk about is whether one ought to support the Donald or the Hillary. And it’s my impression that those who are marginally in favor of Donald and vice versa do that with a completely different view on the risks associated with either of them.

People who favor Hillary have something like this in mind:

Hillary will continue with the status quo that started with George W. Bush (especially foreign policy) and continued under Obama (who added domestic trends such as Obamacare). Trump, on the other hand, is a complete wild card who will transform the (fragile) political institutions we have into something of an even more authoritarian system. And having an authoritarian figure with his fingers on the red button just seems like a very bad idea.

People who favor the Donald are seemingly thinking something like this:

Hillary will continue with the status quo that started with George W. Bush (especially foreign policy) and continued under Obama (who added domestic trends such as Obamacare). Trump, on the other hand, will be such a weak politician that he will get almost nothing done. Even in his own party, he is so unpopular that he won’t get executive discretion even if he asked for it. He won’t be able to achieve anything and he might even get impeached. But regardless, he will be an overall failure of a politician, and that’s a good thing relative to the trend that Hillary started.

I could be wrong, of course, but this seems like the trade off that people are making. We know, with a reasonably high certainty margin, what kind of policies Hillary will favor. Trump, however, is a complete wild card. Some people think the wild card will accomplish very little (and thereby show a high confidence in the current workings of the American governmental system), so therefore he is preferable to Hillary. Other people think he will accomplish a lot (and thereby showing very little confidence in the current workings of the American governmental system.)

I think this trade off is basically right: where you stand on Hillary versus Trump depends on your view in the likelihood they’ll achieve what you think their plans are. Which of these have the correct view, I do not know. But it’s an interesting question nonetheless.

Peter Singer vs The Poor

I am new at Notes On Liberty, graciously invited by Brandon Christensen. I’ll be blogging about a range of things, some of which will include political philosophy.

I am currently working on a paper on Peter Singer’s famous “Famine, Affluence and Poverty” paper that argues that we have a moral obligation to donate a lot of our current holdings to poor people. His argument is pretty straightforward.

Premise 1: I begin with the assumption that suffering and death from lack of food, shelter, and medical care are bad.

Premise 2: if it is in our power to prevent something bad from happening, without thereby sacrificing anything of comparable moral importance, we ought, morally, to do it. By “without sacrificing anything of comparable moral importance” I mean without causing anything else comparably bad to happen, or doing something that is wrong in itself, or failing to promote some moral good, comparable in significance to the bad thing that we can prevent. This principle seems almost as uncontroversial as the last one. It requires us only to prevent what is bad, and to promote what is good, and it requires this of us only when we can do it without sacrificing anything that is, from the moral point of view, comparably important. I could even, as far as the application of my argument to the Bengal emergency is concerned, qualify the point so as to make it: if it is in our power to prevent something very bad from happening, without thereby sacrificing anything morally significant, we ought, morally, to do it.

Example: An application of this principle would be as follows: if I am walking past a shallow pond and see a child drowning in it, I ought to wade in and pull the child out. This will mean getting my clothes muddy, but this is insignificant, while the death of the child would presumably be a very bad thing.

And therefore, he concludes, there is a strong moral imperative to donate a lot of money to poorer people who are in dire need of assistance.

However, there seems to be something obvious that is overlooked, something that I haven’t encountered in the literature on the topic. Namely, Singer discusses the implications this principle has for rich people, they have to donate a lot of money, because being poor and suffering because of lack of food is bad. However, this principle doesn’t limit itself to creating obligations for those in affluence. It should, ipso facto, also create implications for those in poverty.

Premise 1: Poverty and the suffering it causes is bad. (It seems hard for Singer to disagree with this.)

Premise 2: If it is in our power to prevent something bad from happening, without sacrificing something of comparable moral worth, we ought, morally, to do it.

Ok, fair enough. But if poverty is bad: why doesn’t this principle create a very strong moral obligation for people in poverty to not get children (and thus putting more people in this situation?) Maybe one could argue that getting children is a great moral good (or that not getting children is a great moral evil), but it seems weird to say that putting people into something that (by implication of Singer’s views) is considered a great moral evil is somehow a good thing.

So if I am right, Singer needs to accept that his views create a strong moral obligation towards poor people not to get children.

Even more so. If this is the case, it follows that everyone every has a strong moral implication not to get children, because we will always be poorer than we’ll collectively be 100 years in the future. (Were the original cave dwellers immoral people for getting children then?)

Maybe one can argue that even though suffering is bad, but on net, a human life is still a good thing. The marginal choice leads us to say ‘we need another life’ (that’s on net good) but when a specific human life is in need, we need to help that life, on that margin, because on that margin, we can still alleviate suffering (which is generating ‘less bad and more good’). The issue with this line of argument seems that it has a very strong assumption that a life is, on net, a good thing. But even ignoring that, it does open the gate towards a comment from the ‘rich people’ to say: ‘well, if those parents don’t have a moral obligation to not get children because on net a human life is still worth living, even if there is some suffering, why do we have an obligation then to help at the point of suffering? The life, on net, was still a good life.’ (This point follows from the assumption that it isn’t unethical for those parents to get children, despite their poverty and the suffering that results from it.)

I invite any and all comments on this issue.