Decline of the Logos

Section 1: The Argument

While much of the left continues to fight amongst itself over how it should react to the fact that its political wing doesn’t even have a whisker of power any more, the centre-right coalition that currently governs the country is busy reshaping it in its own image. This is no surprise; all parties do this when they’re in office. The problem is that arguing entirely within a left-wing context means that your arguments have little purchase beyond your immediate ideological buddies, inevitably weakening the left’s eventual response to the new age of austerity. As an avowed centrist who fundamentally dislikes any one side of the debate getting too much power, I’d like to sketch out an argument that the left can use to demonstrate the moral necessity of progressive taxation using the language and principles of right-wing libertarianism.

It revolves around the peculiar interplay between the notion of a strong moral right to property and inheritance tax – or, as it’s been relabelled by the right-wing campaigners on the rather patronising assumption that Daily Mail readers won’t understand that ‘inheritance’ involves people dying, the Death Tax. I think this new nomenclature should be embraced; indeed, it should be extended. I propose instead of an inheritance tax, we work towards a Death & Destruction Tax.

The argument is this. To the right, your moral right to property is derived from your work to achieve it (“I worked hard for my money, and I deserve to be able to spend it any way I like”). This isn’t anything to do with a labour theory of value, of course – the quantity of money you are due in accordance with your work is set by the market. Your moral right to property is partly determined by the purchasing choices of other people, to illustrate one of the bizarre contradictions inherent in this way of thinking.

Within this framework, inheritance tax can be construed as an evil (“I worked to give my children a better life, and the state shouldn’t take that away by force.”). The state does not have a right to the products of your work, as moral rights to property are determined by that work – assuming, as seems reasonable, that right-wing viewpoints tend towards a night watchman state.

However, the notion of moral rights to property (as opposed to legal rights) begins to break down at death. You’ve transferred your assets to your offspring, but the original moral right that says it would be wrong to take away those assets is still derived from your work, not your offspring’s. The notion of a transferable moral right in this context is peculiar in itself – you can transfer the moral right to property through voluntary exchange or donation, but the source of that right remains yourself. Therefore, when disposing of your assets at death, the wealth you are rightfully able to pass on is determined by the work you’ve done to create it. These assets come in two forms: wealth-generating assets (land, industrial plant, stocks & shares) and liquidity (i.e. cash or some other bearer of value). Since the moral right determining the ownership of these assets is derived from your work, that moral right is limited by any destruction of assets your work has entailed.

This is because the balance between the liquidity derived from overexploiting wealth-producing assets and the liquidity derived from sustainably exploiting those assets is not necessarily equivalent. Say a forest contains 100 trees, and expands at a rate of 10 trees per year. The price of lumber equivalent to a tree is £10. You can earn £100 per year exploiting the forest in a sustainable fashion. However, if the price of lumber rises to £20 per tree, you could chop down the entire forest in a single year for a return of £2,000 – a figure it would’ve otherwise taken you 20 years to achieve.

Once that 20 years is up, however, you’re making a loss on the asset. However, you don’t care, as you’re now dead, and we’re considering whether you should be liable for destroying assets that could’ve otherwise generated wealth.

It’s pretty clear under this notion of moral right that you are, certainly morally culpable for destroying wealth-producing assets: you’re free to do what you wish with your property when you’re alive, but on death any future owner of those assets has had their ability to generate wealth harmed by your action, and since under this notion of moral rights you can only pass on the wealth you’ve worked to generate, you can’t pass on wealth you’ve destroyed.

The basis of an inheritance tax – or, as I prefer, a Death & Destruction Tax – should be the value of sustainable wealth-producing assets you’ve destroyed over the course of your life. A night watchman state should seek reparations for the destruction of assets belonging to other people – and necessarily, on your death, those assets will belong to other people. However, those reparations can’t go to those you’ve specified will receive your wealth – this is a reparative measure, and therefore reparations must go to all potential future holders of your assets, as eventually your heirs will die too. This means the broader population, in some way to be determined by some form of collective expression of their will. We could call it the state.

Section 2: Implications & Objections

Destruction of sustainable assets is a broad term – it clearly doesn’t cover digging up ores or even oil, but it does cover environmental damage as a consequence of those activities, as well as over-farming, over-fishing, watershed destruction and – of course – emitting gases that will adversely affect the environment. You’d clearly be liable for any of those – but you’d also be liable for any destruction engendered by your action, such as companies you’ve invested in performing any similar activities.

There is, therefore, a risk of double payment: if this measure or a similar one were implemented, green taxes on emissions of industry in which you’ve invested would reduce your rate of return while simultaneously making you liable for D&D. It’s possible that any implementation of this tax would need to consider the role of other taxes in this system when considering which assets were liable.

This leads on to another obvious objection: this tax would be overly complicated and bureaucratic to collect. However, setting it in a contemporary context, this isn’t so clear – much of the work around the sustainability of assets like fisheries is already being done, and environmental audits for major companies are relatively commonplace. It may be the case that it’s more difficult to identify ownership of assets reaching significantly far back into the past, and therefore any implementation may need to consider a cut-off period for asset checks – perhaps ten years before death, or when actuarial tables indicate that the probability of surviving beyond a particular age begins to look dicey.

Implementation would certainly entail a switch in pension funds away from enterprises involving overexploitation of assets and into sustainably-managed businesses, like renewable energy (disclaimer: I work in the renewables industry). It would most likely lead to a sudden dumping of overexploited assets on the market – which, in the case ruined farmland, may make them cheap enough to permit restoration work.

Overall, the tax would force a reconsideration of one’s long-term impact on the world, by forcing you to work out what you really would leave when you’re gone. It also demonstrates that taxation at death can be a moral imperative for any state – regardless the role one attributes to it.