Indiana Law Journal, Vol. 70, p. 119, 1994
51 Pages Posted: 31 Jul 2009
Date Written: 1994
This Article explores the way in which American views regarding the morality of money affect tax debates and legislation. Part I traces and summarizes the roots of society's contradictory attitudes toward money and wealth which celebrate the accumulation of wealth on the one hand and the more egalitarian distributions on the other. Part II examines how these attitudes have played themselves out during the past century in the income tax laws and the accompanying debates. It focuses on three time periods during which radical changes occurred in the income tax and contrasts between attitudes toward wealth were glaring due to the predominance of the capitalist mode: (1) the establishment of the income tax, 1894-1913; (2) the 1920's; and (3) the modem era, the late 1970's to the present. Part III provides a short conclusion which summarizes some of the ways in which the contradictory attitudes toward wealth and the attendant rhetoric have shaped the income tax laws.
The consistency of the income tax rhetoric illustrates the deep and abiding nature of the conflicting feelings of fear and admiration of wealth. Americans seek and admire earned wealth, yet fear its very power; they encourage saving as virtuous, yet worry about the ultimate consequences of great accumulations of wealth. While some people characterize these contradictions as two opposing traditions, this Article holds that the two are, in fact, intertwined into one broad tradition which I label moral economic individualism. In some historical periods, one facet dominates; in some people, one facet or the other is dominant. Yet, the recessive facet is ever-present, modifying the dominant one. The contradictory attitudes are reflected in the income tax. They help explain why the tax is an amalgam of consumption and income provisions and why it has failed to produce either dramatic progression or real redistribution of wealth.
Keywords: Income tax, wealth, money, rhetoric, tax policy
Suggested Citation: Suggested Citation
Kornhauser, Marjorie E., The Morality of Money: U.S. Attitudes Towards Wealth and the Income Tax (1994). Indiana Law Journal, Vol. 70, p. 119, 1994. Available at SSRN: https://ssrn.com/abstract=1441476