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Tal Ben-Shahar is a Graduate Fellow at Harvard University's Center for Ethics,
and the author of .
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By Tal Ben-Shahar
February 7, 2003
Under the banner of social justice, various political parties in Israel - from Meretz to Shas - are calling for a more equitable distribution of wealth. The justification for their calls is simple and straightforward, and ostensibly makes perfect sense. Because of the sharp increase in unemployment, the poor are getting poorer, with more and more people struggling to get food on the table; at the same time, while the rich are certainly hurt by the flailing economy, they still live in Ramat-Aviv, Herzliya Pituach, Denya, or Savyon, eat in expensive restaurants, travel abroad, and drive their brand new cars.
In utilitarian terms, if we want to increase the overall welfare in our society, it seems logical to take a little bit more from the rich - for whom the extra burden would be marginal - and give it to the poor - for whom any additional help would make a significant difference. Such logic, however, is short-sighted, myopic. Beyond the fact that it is immoral to steal, whether the victim of the theft is rich or poor, forcefully taking money from the wealthy will hurt everyone in the long term, including the poor. The moral is also the practical.
The people who will be hurt most by a tax increase are the main wealth producers - the successful businessmen, investors, and entrepreneurs - responsible, to a great extent, for the food we eat, the clothes we wear, the houses we live in, the software and hardware we use.
They are also the ones who create jobs for the majority of us. Surely the millions of laborers matter a great deal for the success of the economy, but without the businessmen, investors, and entrepreneurs, fewer laborers would have work, and far less wealth would be produced. While food does grow on trees, it takes the producer to invest money and mobilize people so that enough trees are planted and cultivated to feed us all.
The government, by increasing the tax burden on the producers of wealth, is undermining their capability to create more affluence - and, consequently, more jobs. Entrepreneurs are always looking to start new ventures, and most businessmen want to help their existing companies grow. The more money they have - the less that is taken from them by the government and redistributed - the more they are able to invest in growth and development. Moreover, the less the government takes away from them, the more incentive they have to take the risks that starting or expanding a business entail.
In Israel, with its socialist roots, the tax burden on the public has been enormous; it is a tribute to the creative spirit of the Israeli producer that any enterprise has been able to flourish. But instead of reducing taxes and allowing that same creative spirit to soar and create a prosperous society, the myopic vision of political parties with socialist aspirations or interest groups such as the Histadrut is holding the economy back. This vision is hurting everyone, especially the poor people.
If taxes are further raised, if more burden is put on the wealthy, more businesses will collapse, more people will lose their jobs, and more people will be dependent on welfare. Consequently, the government will be forced to take more money from the producers, which will lead to fewer jobs, more poverty, and, once again, more dependence. Instead of providing the producer the freedom he needs to create wealth, the government is creating a vicious cycle of poverty, dependence, and degeneration. Only a significant tax cut can reverse the trend and create a virtuous cycle of wealth, growth, and independence. Everyone, in the long run, will benefit from a reduction in tax, most of all the poor-who will not only have a job that will pay the bills, they will also regain the dignity that comes with being self sufficient.
The welfare state, in which wealth is forcefully redistributed, creates a culture of beggars rather than a culture of producers. The poor learn that they don't necessarily need to work harder to make more money; in fact, it sometimes pays to be unemployed and spend one's energy begging the government for more handouts. The producer, in turn, is forced to play along, begging for more concessions from the government so that he can keep his enterprise going. The welfare recipient will be better off, financially and psychologically, if he focuses his energy on working for a living rather than working the system. The producer will create more wealth and many more jobs, if he's allowed to do what he does best.
The government, in being immoral itself, undermines the moral fabric of society. When the tax burden becomes too high to keep a business open, the producer has one of two choices: close the businesses or evade taxes. Choosing the former would imply losing one's enterprise and the loss of jobs for others; the latter option entails the risk of being caught and branded a criminal. What should the producer do? Which course of action is more moral? Whatever course of action the producer chooses, is legitimate - because non other than the government is the criminal.
But while it is no crime to steal from a thief, and therefore the tax evader is doing nothing wrong, he is still branded a thief by the government. The producer of wealth, instead of being able to proudly display his contribution to society, is forced to act like a criminal and hide his actions - behavior that has a detrimental psychological effect on him especially if he does not have the philosophical ability to recognize the government's action as criminal and his action as just.
And because the general public, having been indoctrinated with socialist ideology, cannot differentiate between crime and virtue, whenever the government exposes the "crime" of a wealthy tax evader, it contributes to the hatred of the rich for being the rich, the successful for being successful, and the good for being the good. Instead of thanking the businessmen, the entrepreneurs, and the investors, the government and the public vilify them and hold them in contempt; instead of being admired, the producers are condemned. The ingratitude toward the producers - those responsible for much of what we have, and for much of what government officials have - is unjust.
The producers are the moral heroes who can liberate us all from the vicious cycle that our governments have produced. Sir Winston Churchill once remarked that "The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries." Everyone will be better off if the government, rather than inflicting misery on everyone, will allow the rich to get richer, while the poor get richer too.
Views expressed by the author do not
necessarily reflect those of israelinsider.
 
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