Meredith R. Conway (Suffolk), 'Money, It's a Crime. Share It Fairly, but Don't Take a Slice of My Pie!'*:  The Legislative Case for the Progressive Income Tax, 38 J. Legis. ___ (2012):

There is extensive economic and political debate over what would be the best tax structure. However, there is a critical void in the scholarship on the tax proposals. There are no articles examining the legislative and political rationales behind the progressive income tax that was enacted and that has survived in concept through so many administrations, political parties, and persuasions. Policymakers and analysts cannot appropriately evaluate, suggest, or argue the consequences of a proposal to the progressive income tax without this analysis.

The purpose of this article is to identify the rationales for the progressive income tax, both the enactment and the subsequent challenges or affirmations to it as a policy. This paper has discovered six fundamental reasons behind the legislative enactment of the progressive income tax that are still relevant today. The American public is still supportive of a progressive income tax and, as a result, when opponents of the progressive income tax make proposals they try to find some way to label the proposal or an aspect as progressive to garner public support.

The progressive tax does not exist merely for economic reasons; there are more economically efficient systems. No matter how economically sound a proposal is, unless it fulfills the rationales served by a progressive income tax, it will not be an appropriate replacement. Each of the six reasons, which have been consistently addressed in legislative history, need to be evaluated before any discussion surrounding the progressive income tax can take place.

1. The Ability to Pay theory states that those with higher-incomes should have a higher tax rate because they have extra income (surplus) to pay. However, lower-income taxpayers often now pay a greater tax rate than extremely wealthy high-income taxpayers. For example, President Obama pays a lower rate of tax than his secretary and Warren Buffett pays a lower rate of tax than his secretary. In addition, one of the major arguments in the Occupy Movement’s protests is that the tax burden is currently unfairly placed on the “99%” of the population whereas the taxpayers in the“1%” share a lower tax burden while maintaining a higher ability to pay.
2. Enacting a progressive income tax preserves democracy – as democracy has been threatened by the concentration of wealth in a few, such as Super Pacs, wealthy individuals and corporations. All of these groups dominate the political discourse through influence, ads and power and threaten democracy.
3. The progressive tax was enacted to appease labor groups and populists to prevent socialism, communism, or revolution. Recently the protests from the Occupy Movement have clearly illustrated that the lack of the progressive tax is threatening the stability of our government.
4. The benefit theory states that those who benefit the most from the government should fund it. The wealthiest and the poorest receive the most in benefits, while the tax burden falls the heaviest on the middle class.
5. A truly progressive tax is not enacted, rather the shell of one is used to pacify the general public. There is an illusion of a progressive tax to appease the public while really benefiting high-income taxpayers and special interest groups. Recent polls show the illusion may be wearing thin because a majority of Americans think that the income tax really benefits the wealthy.
6. The progressive income tax can be used to redistribute income or wealth. The disparity and inequality of income and wealth is at its greatest levels since the Great Depression.

This article identifies these six rationales by examining the entire legislative history of the progressive income tax, establishing that these rationales are firmly entrenched, and creates a foundation on which legislators, analysts and policymakers can finally base their analysis and proposals.

* Pink Floyd, “Money” from the Dark Side of the Moon (Harvest/Capital Records) (1973)