Monday, 11 April 2011

Beware the Tyranny of the Majority

There is nothing easier in this world than spending other people’s money, and conveniently there are a lot of politicians prepared to make it possible for us to do so. But is it just to do so?

One of the things I have been pondering since the March 26th mass tantrum in London are two slogans I saw emblazoned on various pieces on private property and signs. One said “Burn the rich” and the other said the less controversial “Tax the rich.” I imagine many people would agree with the latter but disagree with the former, while failing to see the misguided mentality that connects the two.

“Tax the rich” is something we hear of so often now that we take it for granted. We accept that not only is it “fair” for “rich” people to pay a higher amount of tax in real terms, but that it is also acceptable for them to pay a much higher percentage of income tax. Additionally, we accept that the government can occasionally place special taxes on rich people, such as the mansion tax in New York City, or the supposed “one off” bankers bonus tax that is currently in vogue. However, one may ask – is this behaviour acceptable?

Arthur James Balfour – who was Prime Minister from 1902 to 1905 – once said, “The tyranny of majorities may be as bad as the tyranny of kings.” Indeed, the concept of the tyranny of the majority is one that has worried many political thinkers – most notably the American Revolutionaries – who consequently put limits on government in order to prevent such a tyranny from occurring. It is a concept that one might not have heard explicitly but one that we are all aware of. Although we accept the principle of majority rule, we recognise that it has limits, and if 51% of people voted to execute the remaining 49%, that this would not be a legitimate use of democratic power, and would be a tyranny of the majority.

To counteract this problem, democratic theory recognises that man has certain rights, and that government has certain limits. Democracy cannot be an excuse for the tyranny of the majority over the minority – even the majority can only vote for certain things.

From this, we state that it is not right to “Burn the rich”, even if it is approved by the majority, for the majority do not have the right to enact tyranny upon a minority. Yet does this principle not also mean that a democratic society has no right to levy special taxes solely on a minority, i.e. the rich? Is this not the imposition of tyranny by the majority onto a minority of rich people?

Taxation should be a burden shared by all. It is natural that rich people should pay more money in real terms than those who earn less, but there is no reason except for governmental overreach that means that the rich should pay a higher percentage of tax. People who are paying little or no income tax then forcing people on high incomes to pay 40-50% of tax is not “fair”, it is simply tyranny lite. If we accept that one group of people has the power to place certain taxes on another without their consent, what is to stop them in theory from imposing a 100% tax, or simply confiscating their property altogether?

The more democratic and genuinely fairer way of taxation is to implement either a cap, as has been done in Hong Kong (the highest tax bracket is 20% and most income is taxed at 2%, 8% or 14%), or a flat tax as is currently being considered in Poland and Australia.

This would mean that the majority calling for a tax hike would be bearing similar hikes themselves, meaning that they would be less likely to call for obscene confiscations of income like we have been seeing in Britain in recent years. Additionally, it would prevent the hypocrisy of high and mighty armchair activists and Che wannabes thinking themselves saints for proposing outlandish spending proposals, whilst demanding that a minority pay for their inspired ideas. They would have to put their money with their mouths are.

It would also lead to a great deal more fiscal responsibility from our population and our government. For the majority might be a little more timid about calling for ridiculously wasteful spending programs if it is their taxes as well that are to be hiked in order to pay for it. Yelling “Get someone else to do it” is seen as the height of rudeness and laziness in a social setting, yet write it down on paper and we call it the Labour Party’s Election Manifesto.

I doubt that this change in taxation will happen very soon, for it will always remain a lot easier to spend other people’s money. Certainly, activists on the left know full well that their movement would be nowhere near as popular if instead of scrawling “Make the rich pay” on the wall of Fortnum and Mason they scrawled “Make everyone pay.”

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