Are the Rich Paying Their Fair Share?

Starting with Bernie Sanders’ 2016 campaign, a mantra on the progressive left was that the rich need to pay their fair share in taxes. Through the 2020 campaign, I was skeptical of this mantra for a number of reasons.

First, as a committed consequentialist, I didn’t like the deontological underpinnings of the statement. Sure, if you want to fund something, raising taxes to pay for it is usually necessary, and the rich are usually the best group to tax to fund those programs, but that motto seemed unfairly retributive. Of course my own privilege was a part of it too. So were arguments about whether the rich already pay their fair share, which seemed somewhat convincing, again, if the argument is on deontological not consequentialist terms. For example, in 2018 the top 1% earned 21% of income but accounted for 41% of federal tax revenue, which is at least an arguably reasonable percent to account for the inequality (though of course income is not the only thing that matters).

But my views changed recently. I still tend to favor consequentialism, but the motto that “the rich need to pay their fair share” seems a lot more appealing when I replace one word with something it can proxy for. Namely, replace the word “rich” with “boomers”, who make up a large portion of the 1%.

Bruce Gibney’s recent book, A Generation of Sociopaths: How the Baby Boomers Betrayed America, is rather enlightening on this issue. He illustrates really well the ways that the Baby Boomers acted in a collectively hedonistic way that favored consumption in the present at all costs to other generations.

Federal spending on research and development, for example, has decreased steadily in recent decades, while the Boomers take advantage of massive spending of past generations on things like the interstate highway program and defense-related technological discoveries (including GPS, the internet, and satellites).

Boomers had far more sex, divorced more, ate far more food, and consumed more drugs and alcohol than other generations. Most notably, they got the drinking age in many states lowered to 18 to coincide with arguments about teenagers serving in Vietnam, only to federally raise the drinking age back to 21 by the time the youngest Boomers were in the clear.

They prefer present consumption to action on climate change. They prefer to cut taxes in most cases and let future generations deal with the debt that results. Places where they’re more willing to increase taxes still benefit them; for example, the taxable income ceiling for the payroll tax has been steadily increasing, but this is something that will benefit the Boomers far more than other generations who could pay even more into the system and end up with none of the benefits when social security goes bankrupt. There’s a similar example of the estate tax decreasing when most Boomers would be inheriting, but then being pushed back up.

The examples are endless of the Boomers exploiting their political power — a result of their large numbers due to the demographic “Boom” — to conduct baits and switches that benefit them.

Gibney’s prognosis that the Boomers are collectively sociopathic is, in my opinion, a slight exaggeration meant to draw attention and sell books. But the point that the Boomers have hedonistically manipulated the political system in their generational interests in a way that has not been done by any other generation is quite convincing.

All of this is not to say that the rich are absolved of any moral blame, or that all Boomers are rich. But everyone has a pretty different definition of who the “rich” are, or at least how to measure who is and isn’t in the group. While people might quibble over whether specific birth years at the edge of the boom are included in the generation, it’s quite obvious what metric is used: their birth date.

And unlike the rich, the Boomers have been far more effective at rewriting the rules to benefit them, because they have the ability to use the progression of time to their advantage in a way that definitionally the rich cannot.

Most of the policies left-wing politicians are talking about when they talk about the rich paying their fair share are aimed at accounting for this inequity in “share being paid” between generations. For example, we’d normally want to increase the income tax at the highest levels to account for the Boomers’ tax-cutting tendencies.

But as the Boomers retire, they stop earning income, but still earn capital gains or draw from their pre-existing wealth. Soon increasing the income tax will hurt the generations already plundered by the Boomers, likely to pay for programs that will benefit them. It makes sense, therefore, that capital gains tax and wealth tax (though I think the specifics of the policy needs to be better thought out) seem to be the two tax increases discussed most by the likes of Bernie Sanders and Elizabeth Warren.

I’m open to the rich needing to pay their fair share. I think usually the Boomers are a proxy for the rich. But definitely, the Boomers need to pay their fair share.