Income and the Question of Rights; R. Cordato

(He dismissed prohibition by pointing to the fact that it was repealed.) To counter this claim, Mr. Frum pointed to the Sixteenth Amendment, which allowed the government to impose an income tax. Amazingly, Kamber denied that the Sixteenth Amendment re duced anyone's rights, claiming that it simply allowed the government to tax people's in come. The clear implication was that people do not have a right to their income, i.e., the fruits of their labor. Therefore, the Sixteenth Amendment, which allowed the government to coercively take a portion of individual income (presumably up to 100 percent), did not reduce anyone's rights. This entire digression lasted for less than a minute. Yet it can be viewed as defining the fundamental difference between contempo rary liberalism and conservatism. How one views the rights that people have over the income that their productivity genDr. Cordato is the Lundy Professor at Campbell Universityin Buies Creek, North Carolina.

erates can go a long way toward explaining positions that are taken on a large cross section of public policy issues. This includes not only budget and fiscal policy issues, but also most regulatory issues, which involve forcing people to use their incomes in ways that they would not freely choose. A person's right to his or her income means nothing if it doesn't mean having the right to choose how that income is used. If Kamber's view, that the person who generates or earns a particular amount of income has no moral claim to it, is represen tative of American liberal thought, then many issues fall neatly into place. For example, the overriding concern that many modern liberals have for "tax fairness" is driven by an under lying egalitarian ethic-no one should have a greater income than anyone else. Hence, it is always "fair" to raise taxes on upper-income people, and tax cuts that accrue to the wealthy will always be "unfair."

Conservatives and especially libertarians might suggest that the egalitarian perspective itself is unfair because it disproportionately denies people the right to their income. But if income is viewed not as being the property of the people who earn it, but as a "common pool" resource, then there is no moral di lemma. The government's job is simply to make sure that "society's economic pie" is divided "fairly." Wealth redistribution schemes, then, are never an issue of robbing from Peter to pay Paul, because the term 12 "robbery" implies that Peter has a "right" to what is being taken. Corporate Welfare A second example is the issue of "corporate welfare." Historically, government welfare or "relief" has implied a transfer of income, via taxation, from people who have earned it to some subgroup that "needs" the income but has not been able to generate it through productive effort of its own. From this per spective, such programs as subsidies to farmers and government loan guarantees to businesses would all qualify as "corporate welfare." However, in recent years, many politicians and political pundits have been referring to a new kind of corporate welfare, known as a "tax subsidy." While it is not always precisely clear what constitutes a tax subsidy, a business is typically said to be receiving such corporate welfare if there are certain "loopholes" in the tax code that allow it to reduce its tax liability.

From the perspective of those who feel that people have a fundamental right to income that they have generated, Le., that the Six teenth Amendment was rights reducing, the expression "tax subsidy" is an oxymoron. As many conservatives are fond of pointing out, 13 "you can't subsidize someone with his own money." But what if it isn't his own money? What if none of his income, beyond what the government allows him to keep, is his own money? If this were the case, then the concept of a tax subsidy makes complete sense. In deed, from this perspective, any amount of income that the tax system allows the indi vidual income earner to keep and use for his or her own purposes is a "tax subsidy." If my hypothesis is correct, that this short, "beside-the-point" dispute on C-SPAN is at the center of many of our most pressing economic policy debates, then much of cur rent political discourse can be seen as missing the point. The fundamental debate should focus on a question that is rarely, if ever, asked: What should be the relationship be tween the income that a person generates and the legitimacy with which he can claim rights to that income? This is not an issue of economics or of pragmatic public policy. It is a fundamental issue of morality. It is the right to the fruits of our labor and effort that makes our "Creator-Endowed" rights to life, liberty, and the pursuit of happiness meaningful. In reality, if the Sixteenth Amendment to the Constitution did not reduce our rights as a free people, then neither did the first ten amendments secure those rights. 0 At What Price Will The Gold Standard Return?

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