I. When you look at your pay slip (in New Zealand as indeed anywhere else), you see that it details (1) your total gross income and (2) your total net income, the latter being the quantity received after “deductions” subtracted from the former. One of these deductions is (assuming an income tax) your tax contribution. Despite only ever receiving our net income as discretionary wealth, we often talk and act in terms of gross income. Jobs are advertised according to an hourly rate or salary based on the gross figure, and when we talk about what wages or salary we are paid, we often talk about this figure as well.
It is therefore easy
to look around us, at the information we are provided when we get paid, or when
we are looking for work, or when we talk about what we are paid, and think that
(1) we are in some sense entitled to our gross income, but that (2) the government
goes on to take some of that money in taxes, so that we are only left with a mere
part of what we are entitled to. Thinking about our legal entitlement to income
in gross terms becomes second nature to us. But this can quickly shift from the
thought that we are legally entitled to our gross income (if we fulfil our
contractual obligations), to the thought that we are morally entitled to
it, that is, to the thought that we deserve our gross income, due to the
work we’ve done. After all, that is the figure we are told we are paid, and thus the figure we worked for.
In their book, The
Myth of Ownership, Liam Murphy and Thomas Nagel call this picture of things
“everyday libertarianism” and argue that it has considerable sway over the
public imagination, with unfortunate downstream effects for how we view questions
of justice in tax policy and institutional design. (This is probably much more true in the United States, where the authors are writing from, than in New Zealand.) Why it might be unfortunate in a moment; for now, what does such a picture amount to, and what sway is it supposed to have over our imagination? The basic idea central to our everyday
libertarianism, Murphy and Nagel claim, is that the pretax distribution of wealth
provides a moral baseline from which taxation begins. In other words, it is the
presumption that, legally and morally, we are each entitled to our gross income,
and that any changes to the distribution which would result from giving everyone
their gross income needs to be supported by a competing moral consideration if
it is to be justified.