The Essential Rothbard - Ludwig von Mises Institute

24 The Essential Rothbard
The book also subjected to withering criticism the standard
canons of justice in taxation. Rothbard’s line of attack differed from
that of most of free market economists, who emphasized the evils
of progressive taxation. Rothbard had no love for the progressive
principle, but he found some of the arguments against it to be
flawed:
The . . . objection is a political-ethical one—that “the poor
rob the rich.” The implication is that the poor man who pays
1 percent of his income is “robbing” the rich man who pays
80 percent. Without judging the merits or demerits of robbery,
we may say that this is invalid. Both citizens are being
robbed—by the State. . . . It may be objected that the poor
receive a net subsidy out of the tax proceeds . . . [but] [t]he
fact of progressive taxation does not itself imply that “the
poor” en masse will be subsidized. 42
To Rothbard, the level of taxation is the key issue: “Actually, the
level of taxation is far more important than its progressiveness in
determining the distance a society has traveled from the free market.”
43 A rich person required to pay a steeply progressive tax would
be better off than under a proportional system with higher rates.
A brief but brilliant passage refuted in advance the antimarket
arguments based on “luck” that were to prove so influential in the
later work of John Rawls and his many successors.
[T]here is no justification for saying that the rich are luckier
than the poor. It might very well be that many or most of the
rich have been unlucky and are getting less than their true
DMVP [discounted marginal value product], while most of
the poor have been lucky and are getting more. No one can
say what the distribution of luck is; hence, there is no justification
here for a “redistribution” policy. 44
42
Ibid., pp. 1193–94.
43
Ibid., p. 1194.
44
Ibid., p. 1333. The philosopher Susan Hurley later developed the
same point in her Justice, Luck, and Knowledge (Cambridge, Mass.: