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The bitter, unresolved partisan struggle over our national debt, culminating in a near-default and an historic credit downgrade by the ratings agency Standard & Poors, is above all a struggle over competing visions of fairness - and ultimately a battle for the soul of this country.
In the rancorous, down-to-the-wire "negotiations" [sic] between the Republicans and the Democrats, the two sides advanced radically different visions of what would be a fair outcome. President Obama called for "shared sacrifice" - everyone doing a part to deal with our anemic economy and our deepening national debt problem, including some "revenue enhancements." The Republicans claimed that any increase in taxes would hurt the "creative class" and undercut job creation. ("What job creation?" one might ask.)
More important, though more muted, was the moral claim on the right that taxing the rich - especially to support the unemployed and the poor - is unfair. As the anti-tax crusader Grover Norquist puts it, tax increases amount to "stealing" money from those who have earned their wealth and who deserve to keep it.
A subtext for this moral claim was provided by the famed 1950s novelist Ayn Rand and her "gospel of selfishness." To quote one of her characters, the architect Howard Roark in The Fountainhead: "All that proceeds from man's independent ego is good. All that which proceeds from man's dependence upon men is evil... The first right on earth is the right of the ego. Man's first duty is to himself...His moral law is to do what he wishes, provided his wish does not depend primarily upon other men....The only good which men can do to one another and the only statement of their proper relationship is - hands off!"
Warren Buffet disagrees. In a recent op-ed piece in the New York Times, he wrote: "While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as "carried interest," thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they'd been long-term investors. These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It's nice to have friends in high places...
"Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends...I didn't refuse, nor did others...
"Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion - a staggering $227.4 million on average - but the rate paid had fallen to 21.5 percent...
"I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn't mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering. My friends and I have been coddled long enough by a billionaire-friendly Congress. It's time for our government to get serious about shared sacrifice."
Most Americans, it turns out, agree with Buffett. A national survey conducted in July while the battle raged in Washington showed that 72 percent of Americans (almost three quarters) thought that taxes should be raised on those earning more than $250,000, including 54 percent of those who identified themselves as Republicans!
The bottom line here is that Ayn Rand, Grover Norquist, and other defiant libertarians have got it wrong about fairness. As I explain at length in my book, The Fair Society, a viable "social contract" requires us to take into account and balance three distinct fairness claims. The first is "equality" with respect to our basic biological needs - an imperative that we all share equally and a prime obligation for every society. The second fairness principle involves providing adequate rewards for merit ("equity"), though not all claims for merit are valid (obviously). And the third principle is "reciprocity" - paying a fair share to support our society in return for the benefits we receive.
Reciprocity is where Ayn Rand's brand of libertarianism fails the fairness test. Indeed, such terms as "fairness" and "social justice" are not even a part of her lexicon. It's a fatally defective philosophy.
Our choice is clear: We can opt for a fair society, or we can follow the dark, well-traveled road taken by so many failed societies of the past (and present), which leads to a nation that serves the interests mainly of the rich and powerful. To me, the right choice is obvious.
