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Flat theft vs. flat tax

Writer's picture: Bible BrianBible Brian

In 1975, Milton Friedman stated "One of the great mistakes is to judge policies and programs by their intentions rather than their results. We all know a famous road that is paved with good intentions." (1). The simple fact is, intention rarely affects the actual outcome of a policy. Just as one might intend to fly, but is still quite subject to the law of gravity, so also is it possible to seek to aid the poor, but fail, and maybe even do significantly more harm.


Socialism is an excellent example of an ideology which, at least on the surface, has some of the most beautiful intentions. To end things like hunger, homelessness, and crippling debt are truly noble goals. And unlike the other ugly stepsister, Communism, Socialism does not even expressly prevent some people from becoming richer than others.


These are truly beautiful intentions, but we do not live in a world that responds to such things. In this world, with its limited resources, unpredictable disasters, and of course totally depraved, free-willed image bearers of the Living God, one must not only have good intentions, but good ideas about how to carry them out. But far too often, policies aimed at helping the poor have, at best, failed to do so. At worst, they have caused greater problems.


A common theme among Socialists is the demonization of the rich. Millionaires, and especially billionaires, are often portrayed as greedy, soulless thieves, who care nothing for the poor, but merely hoard wealth for themselves. They are seen as oppressive, disconnected, and parasitic. Thus, we are often told that they should "pay their fair share". That is, the government should tax them more because they have more.


One of the more extreme examples of this can be seen in the header image, in which Robert Greenwald proposes capping Elon Musk's wealth at $999 million. He then proposes taxing the rest, estimating that this would result in around $239 billion for government programs. He even breaks down his plan, saying $20 billion could go to ending homelessness, $40 billion a year could go to ending hunger, and 710,000 new homes worth $308,000 could be built with the rest.


While ending both hunger and homelessness are a noble goal, this is an abysmal way to go about it. First, notice the proportion. Greenwald intends to take far more from Elon Musk than he's actually ok with letting him keep. Is there any other scenario where "we're going to steal 99% of your money" sounds remotely acceptable?


But setting aside the moral implications, Greenwald hasn't factored in how Elon would respond. To begin with, he clearly has a very uncharitable view of the rich in general. If, as the caricature suggests, billionaires are just greedy leeches, do you imagine they're going to continue earning the wealth they know you're just going to swipe? Elon Musk moved his operations from California to Texas for financial reasons. Do we imagine a significantly greater threat to his livelihood would not cause him to flee? But if he leaves, you get zip for your social assistance programs.


But even if you could make it a universal rule, making it impossible to escape the 99% tax rule, no one is going to willingly produce what they know a bunch of thieves are just going to pinch. If income is capped at $999M, the richest people will simply earn $999M, then put all their effort into maintaining $999M. They will not then go on to produce the extra $239B just so you can take it away and likely waste it on likely inefficient government programs. That's just not how humans work. And I don't mean only the rich or greedy ones. No one will willingly put in the work to produce 100 times what they are allowed to keep.


Proposals like Greenwald's are morally reprehensible, wholly impractical, and adversely ineffective, focusing almost entirely on coercion and redistribution to address the problem. But there are more practical solutions, such as what is referred to as a "flat tax". The flat tax, while not explicitly described in Scripture, fits quite nicely with Biblical principles. In the Old Testament, there was a similar system implemented across Theocratic Israel. This was more about resources such as crops and produce than about actual money. For example, rather than fully harvesting a field, farmers had to leave the corners for the poor and the foreigner to come and get (Leviticus 23:22). There was no explicit limit to how big a field could be, and a bigger field obviously had bigger corners.


In the same way, suppose we granted those living below the poverty line complete and total immunity from tax, and used taxes to fund various welfare programs for them. Everyone else pays the exact same percentage in tax. It's basic math: 10% of $1trillion is more than 10% of $1billion. But the trillionaire also has more for himself than the billionaire. This encourages economic growth by allowing a sustained increase in personal prosperity, rather than punishing it by seizing greater portions. By contrast, with things as they are now, I even personally know people who have, in various ways, restricted their own financial growth, just so they avoid going into a higher tax bracket. As a result, they earn less than they could, and the government, as a result, also takes less in tax than they could. Notice, therefore, how a flat tax is more beneficial than the whole "rob the rich to feed the poor" routine.


Of course, all of this even assumes social welfare is the job of the government in the first place. According to Romans 13:1-7, taxes are not intended as a bulwark against poverty, but as a wage, paid to the workers of God's justice. The government exist primarily as ministers for good. They are avengers against those who practice evil, rather than a heavily armed charity. This may involve things such as stepping in against unethical practices by the rich, but certainly does not involve capping riches, or seizing them for redistribution. Such things seem all but explicitly abhorrent throughout Scripture.


These principles of taxes are quite clearly laid out in Romans 13. By contrast, while one could make the argument that there are hints towards government responsibility to care for the poor throughout Scripture, the Bible only explicitly assigns that responsibility to the individual. As individuals, you and I have the independent responsibility to give to social welfare causes like tackling homelessness and hunger. Most notably, 2 Corinthians 9:7 tells us that God loves a cheerful giver, and this is why we should give as we purpose in our hearts, rather than giving under compulsion. But what's more compulsive than a tax? If we take 2 Corinthians 9:7 seriously, surely we should feed the poor, because we want to, not because we are compelled to do so by a tax.


It's worth noting that the only time the Bible explicitly mentions the government having a role in solving hunger is the famine in Egypt in the latter chapters of Genesis. When Joseph interpreted Pharaoh's dreams, he became second only to Pharaoh, and so was in charge of responding to the 7 year crisis. Note what occurs towards the tail end:


"Then Joseph said to the people, “Indeed I have bought you and your land this day for Pharaoh. Look, here is seed for you, and you shall sow the land. And it shall come to pass in the harvest that you shall give one-fifth to Pharaoh. Four-fifths shall be your own, as seed for the field and for your food, for those of your households and as food for your little ones.” So they said, “You have saved our lives; let us find favor in the sight of my lord, and we will be Pharaoh’s servants.” And Joseph made it a law over the land of Egypt to this day, that Pharaoh should have one-fifth, except for the land of the priests only, which did not become Pharaoh’s." (Genesis 47:23-26).


Under the wisdom given to him directly by God, we see first of all that Joseph does not cap wealth in order to solve the hunger crisis. His approach is extreme, he purchases all land not belonging to the priests for Pharaoh, but he does not cap anyone's wealth, nor does he scoop up 99% of anyone's wealth and distribute it to government programs. Even upon implementing a tax, notice how he only takes a fifth for Pharaoh. Not 99%, not 50%, not even 25%. 20%. The people keep the rest for themselves.


This should actually sound quite familiar. According to the American Heritage Dictionary, Socialism is "Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy." In this case, the means of producing and distributing goods (land) is owned by a centralized government (Pharaoh), who plans and controls the economy. In other words, in response to a 7 year famine, the Egyptians effectively became Socialists!


But notice the unfortunate drawback of this. While grateful for their lives, the people declare "...we will be Pharaoh’s servants." Or, depending on your translation... slaves. In exchange for their lives, they sold their freedom, a transaction that not even their descendants managed to redeem themselves from by the time Moses wrote of the events during the Exodus. Thus, although the Lord guided His servant, Joseph, to respond to a devastating crisis that crippled the land, in this way, it does not seem wise to see it as anything beyond this. It is simultaneously a description of events we should have no desire to repeat, and a cautionary tale against surrendering too much freedom. Socialism, at least according to the ancient Egyptians, is a form of slavery, and one which is very difficult to escape.


All of this points us to the same conclusion: Greenwald's proposal, and others like it, will fail miserably to achieve the goal for which they were proposed. Socialism will not, and indeed cannot, solve problems such as homelessness or hunger. But this should not surprise us, as the government was not designed as the mechanism by which such problems should be addressed. Rather, as individuals, and especially as believers, we are the ones who are supposed to aid the poor.


Indeed, it is one of the central themes of our faith! As James says, "What does it profit, my brethren, if someone says he has faith but does not have works? Can faith save him? If a brother or sister is naked and destitute of daily food, and one of you says to them, “Depart in peace, be warmed and filled,” but you do not give them the things which are needed for the body, what does it profit? Thus also faith by itself, if it does not have works, is dead." (James 2:14-17).


By this same logic, what profit is our faith if, instead of being charitable in a system that allows for greed, we seek a system of coercion that ultimately takes it out of our hands? As Christians, we should be extremely grateful for the free market system we have inherited, seeking to maintain it, and operating charitably within it. Indeed, due to the way in which Socialism tends to increase poverty, we should be extremely vocal against it. A Biblically charitable attitude will always be vastly superior to government interference.


References

1. Friedman, Milton - cited in "Quote Origin: One of the Great Mistakes Is to Judge Policies and Programs by Their Intentions Rather Than Their Results", Quote Investigator, March 22nd 2024 (link)


AI usage


AI was used in the following ways for this article:


1. Identifying the origin of the opening quote.

2. Double checking for any Biblical instances of government involvement in food distribution beyond Joseph's famine response.

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