Is the current "tax reform" going through Congress just? Justice is important because even if citizens are treated dissimilarly by institutions, if the differences are just, all have reasonable treatment and the institutions are likely to be socially accepted.
A widely endorsed theory of justice, developed by the philosopher John Rawls nearly 50 years ago, captures how thoroughly unjust the congressional tax plan is. Understanding this and how it weaponizes wealth against most ordinary citizens may explain why so many people oppose it.
The tax plan will initially reduce taxes on all income groups, with those in the top five percent receiving a higher share of tax reductions. Yet by 2027, 50 percent of middle- and lower-income groups are projected to pay more in taxes than they do now. Will the initial, temporary drop in taxes be enough to persuade those groups to look favorably on the bill, even though their taxes will increase later and they will be harmed in various ways?
Three major components provide resources to assess the justice of basic institutions. One, largely the legal system, should ensure certain equal rights for all citizens. A second, with implications for health care and education, should ensure fair opportunities for all in the community based on similar talents, abilities, and motivations. The third – and this is where economics and governmental tax policies come into play – should ensure differences in income and wealth don't grow so large that the best-off could use their economic advantages to harm citizens who are less well-off.
The current tax proposals violate aspects of all three principles.
Under the first principle, all citizens should be equally protected from various harms. The tax proposals will likely harm ordinary citizens in several ways.
The bill's elimination of the "individual mandate," the requirement that all citizens have health insurance, will result in some 13 million people losing their access to health care, according to Congressional Budget Office estimates. It'll also drive up the cost of insurance for everybody else. Likewise, the tax bill will greatly increase the national debt, a fact that Republican leaders plan to use as leverage to make cuts to Medicare and Social Security, further endangering those who use such programs. Preventive medicine will likely diminish, leaving potential diseases undetected and treatments precluded for many.
Good health care and health protections support equality of opportunity. Loss of health care – resulting in more diseases – reduces opportunity. Additionally, drastic cuts in federal programs that protect the public from toxic substances are likely to increase diseases of environmental origin.
Education is also fundamental to equality of opportunity. Each person should have the same opportunities to achieve professional, educational, and lifelong goals consistent with their talents, abilities, and motivations, whether they come from wealthy suburbs with well-financed schools, or rural communities or big cities where resources are strained.
To date, this goal has not been attained because funding and education are substantially different in poor versus richer communities. Children from lower economic groups are unlikely to achieve one of the core elements of the American dream: having a higher standard of living than their parents. Proposed tax changes heighten the barriers. According to the Congressional Budget Office, the proposed law, by decreasing deductions for state and local taxes, will reduce revenues for education and other state activities. This is a deliberate, long-sought conservative goal: to starve state budgets, a move that undermines opportunity for millions of Americans.
A reasonable theory of justice recognizes the importance of financial incentives to elicit productive efforts from talented and motivated entrepreneurs. However, market rewards can become so excessive that the rich use their wealth to dominate political affairs, reducing life prospects for those who are less well-off. This too is unjust.
In 2010, the U.S. Supreme Court implicitly weaponized wealth with Citizens United v. Federal Election Commission. Extreme wealth differentials for the rich, who have much different political priorities than ordinary citizens, distort democratic institutions. Republicans freely admit their donors' pressures: pass the tax bill or lose our support. Will the 1 percent heap further rewards on congressional benefactors with their extra bounty?
Conservatives have famously opposed the "redistribution" of income and wealth. But it turns out their objection isn't to redistribution, it's to the direction. This bill redistributes upward! The tax bill itself is a weapon against opponents. It also worsens existing income and wealth discrepancies, blessing the most fortunate and enriching their children (by greatly reducing inheritance taxes) while decreasing incomes of the poor and middle classes, raising their future taxes, and fostering harm. By enriching corporations, their shareholders, their CEOs and managers, and the upper 1 percent, tax "reform" increases wealth that can be used as a weapon against ordinary citizens. And "under the radar tax increases on individuals" pay for permanent tax reductions for corporations. We should be outraged by these many injustices.