In a democratic society, we abhor inequality on principle alone. We suggest that all are equal under the law. One person, one vote. Why should our economic model be any different, any less democratic? We are all given equal access to our public services, and so the question is raised — why should some people have to pay more in taxes for equal access to what is publicly provided?
The first inclination is to suggest that everyone should pay the same amount for the same access. This is the flattest tax one can propose. However, it does not take long to realize that dividing out the Federal tax budget by the number of taxpayers would result in taxing a large portion of the lowest earning population more than their income.
And so, the equality of tax argument quickly accedes that a flat tax would not refer to a specific dollar amount, but would refer to a specific percentage of income. This is the heart of the flat tax argument. Everyone contributes thirty percent of their income, and in this way the equality of taxation is accomplished.
But the clear problem with a flat tax, though it sounds reasonable on its surface, is that lower income households need to apportion nearly all of their income to necessities like housing, food, utilities, and transportation. Whereas high income households have money beyond their essential needs. And it is this extra income, or discretionary money, that is targeted for a higher tax percentage because it can be more easily afforded. That is what is referred to as a progressive tax.
Some argue that a progressive tax is unfair. If some people don't have enough money after taxes to pay for their own needs, that should not be the problem of those who do have enough money — or at least, that is the line of reasoning that uses the guise of equality under the law as its rationale. But the place where that rationale falls short is that there would need to also be an equality of access to economic opportunity, which, because of the circumstance of life itself, is impossible.
It is this very principle of equality that forms our judgements for fairness. So it is useful to take a closer look at the social order that governs the wealth and opportunities that create our economy.
By far, the greatest opportunity to become wealthy is to be born into a wealthy family. The second best likelihood is through associations with other wealthy people whose circles are less likely to include poorer people. For those of lower economic status to rise, their best opportunity is through education.
Unfortunately, our public education also is very unequally provided. Less money is spent per student in economically depressed districts than in wealthy neighborhoods where local districts can and often do approve special taxes to improve their local schools. Compounding the problem is that children from families that have never attended college are far less likely to go to college than children of families that have.
This ultimately has the effect of entrenching classes in unmoving stations. And though we are a step up from the feudal lordships of the dark ages in terms of opportunity, it is distressing to see over the past thirty years the decimation of the middle class and an enormous surge in the numbers of the lower class while at the same time an unprecedented concentration of wealth in the hands of fewer and fewer people.