Some Thoughts on Hamill, the Two Kingdoms, and the Ethics and Logic of Higher Tax Rates and Redistribution

Abstract

According to Susan Hamill, Judeo-Christian ethics call on us to raise marginal tax rates. Hamill bases this on the belief that higher taxes will yield more income redistribution to the poor and make them better off. Whether or not tax policy ought to be based on religious criteria is beyond the scope of this article. What the article argues instead is that Hamill has an imperfect understanding of both ethical reasoning and of the relationship between taxes and the welfare of the poor. The problems with her ethical reasoning start out with the canard that higher taxes represent simple self-sacrifice. This fallacy allows her to blithely disregard any ethical problems associated with the coercive nature of taxes. Hamill goes on to argue that there is no conflict between her call for higher taxation in the name of Christianity and Boyd’s call for Christians to focus on their own actions rather than on amassing power to coerce others. After considering Hamills ethical reasoning, this article points out that there is no clear positive relationship between higher tax rates and the welfare of the poor in the first place. For one thing, the actual allocation of government expenditures is influenced by a number of stakeholders and is not directly tied to current tax revenues. More importantly, higher tax rates are associated with a variety of disincentives for work and production. This may in turn slow down economic growth and thus reduce the future well-being of everyone, including the poor.

Keywords: Ethics, Morality, Transfers, Poverty Alleviation, Income Tax, Christianity, Susan Hamill

JEL Classification: A13, H24, I38, Z12