Back in April, the conservative economist Lawrence B. Lindsey published an article in The Wall Street Journal complaining about the Biden administration’s plan to raise the capital gains rate. An increase to 39.6 percent would actually cost the government money because it would exceed the revenue-maximizing rate. There could only be one motive, Lindsey insisted.
“Tax rates above the revenue-maximizing rate are punitive,” Lindsey charged. “The government is giving up revenue simply to punish the rich.”
Lindsey acknowledged that wealth redistribution can be good policy. “Higher taxes on the rich to finance spending, or to transfer money to lower-income people, may be good for society’s welfare,” he wrote. Economists typically value money received by a poor person more highly than money going to a rich person, so overall social welfare is enhanced by such transfers.
Taxes that fund constructive redistribution are defensible, Lindsey continued. But when politicians design a tax with rates that exceed the revenue-maximizing rate, they actually shrink the state’s capacity for useful redistribution.
Lindsey voiced dismay that such a tax was getting serious consideration by the White House. “The Biden administration is blowing up one of the key concepts that has united the economics profession: maximizing social welfare,” he wrote. “It now believes in taxation purely as a form of punishment and is even willing to sacrifice revenue to carry it out.”
If Lindsey was dismayed, the editorial writers at The Wall Street Journal were in high dudgeon about the Biden plan. Opposite Lindsey’s article they published their own complaint: “The Dumbest Tax Increase.” While Lindsey spoke sadly about the administration’s disregard for sound theory, the editors mounted a more direct — and personal — attack.
“This is what happens when you turn your economic policy over to Bernie Sanders and Elizabeth Warren,” the editors observed darkly. “Envy is in the political saddle, and Joe Biden is going along for the ride.”
Envy Antagonists
Envy has long figured prominently in efforts to discredit progressive taxation. As far back as 1925, President Calvin Coolidge was dismissing the notion that envy could be allowed to shape tax policy. “This country believes in prosperity. It is absurd to suppose that it is envious of those who are already prosperous,” he declared confidently in his inaugural address. “The wise and correct course to follow in taxation and all other economic legislation is not to destroy those who have already secured success but to create conditions under which every one will have a better chance to be successful.”
More recently, Ronald Reagan put envy at the center of his antitax arguments. In 1982, for instance, he wondered aloud to a group of conservative activists if Americans were truly comfortable with class antagonism:
Since when do we in America believe that our society is made up of two diametrically opposed classes — one rich, one poor — both in a permanent state of conflict and neither able to get ahead except at the expense of the other? Since when do we in America accept this alien and discredited theory of social and class warfare? Since when do we in America endorse the politics of envy and division?
Even more recently, envy has continued to figure prominently in critiques of progressive tax reform. Here are three examples, all published during the past three years by The Hill newspaper (which seems to have a soft spot for anti-envy enthusiasts):
“Soak the rich tax policy is not an economic growth or jobs strategy. It is an economic envy platform that was abandoned in the 1970s because this tale of high taxes on the rich and an expanded welfare state only drove down everyone in the country.” (Stephen Moore and Arthur Laffer, quoted in 2019.)
“Confiscatory tax policies make citizens worse off overall in the name of redistributing resources from the wealthy to the poor. . . . The new administration and its allies in Congress are trying to use the politics of envy and class warfare to argue that low- and middle-income can get ahead only with massive redistribution by the government, instead of economic growth spurred by a dynamic private economy driven by free choice.” (Joshua Rauh and Aharon Friedman, quoted in 2021.)
“Every time a Democrat wins the presidency, all the same people come out and say all the same things: ‘Tax the rich. Nobody cares! This will be very popular.’ Envy is not a political program.” (Grover Norquist, quoted in 2021.)
These complaints about envy have a superficial plausibility. The American Heritage Dictionary defines envy as “a feeling of discontent and resentment aroused by and in conjunction with desire for the possessions or qualities of another.” Given that definition, is it so unreasonable to suspect that a progressive tax — especially one that targets a relatively small number of very wealthy individuals — might be an expression of envy? Might the tax be an instrument for dispossessing the better-off rival of the wealth that is causing the discontent in the first place?
The answer to that question is probably no. If we take envy seriously — and examine it carefully — it quickly falls apart as a meaningful complaint about progressive taxation. A quick survey of U.S. history also suggests that envy has never been a driving force in national fiscal reform.
Defining Envy
Trying to define envy is no small task. Indeed, the philosophical literature on the subject is ancient, vast, and complex. But there are shortcuts through this maze, including the Stanford Encyclopedia of Philosophy (SEP), which offers this useful insight: “Most philosophers who have sought to define envy agree in treating it as a form of distress experienced by the subject because he does not possess the good and the rival does, and in attributing a desire for the good to the subject.”
So far, so good. But the SEP adds another important element to the definition. Many philosophers have also argued that “envy involves a desire that the rival not have the good,” the entry notes. Indeed, depriving the rival of the good may sometimes be more important to the envier than gaining possession of the good itself.
This addition is important to the definition of envy as it might be used in fiscal policymaking. To be envious is not simply to desire something that belongs to another — a desire that might simply induce you to work harder at getting the same item. Envy necessarily involves a desire to dispossess the other person of that envied item, regardless of whether you get to possess it yourself.
The editors of The Wall Street Journal may have had this element of envy in mind when they attached the label to Biden and his capital gains proposal. The president was pursuing “punishment for its own sake,” they suggested. If so, then that would truly be envy.
As a corollary of sorts, philosophers have been generally insistent that true envy is never motivated by moral considerations — it is a negative, visceral emotion without meaningful justification. Lofty claims about fairness or justice are simply window dressing for the amoral, emotional distress that comes from seeing someone else’s good fortune.
Philosophers acknowledge that people are sometimes bothered by the success of others for genuinely moral reasons. They may, for instance, believe that the distribution of possessions is unjust. But in that case, philosophers would classify the emotional response as “resentment,” not envy, the SEP notes. True envy makes no room for moral thoughts or goals, just visceral responses.
Indeed, envy has been used to discredit egalitarianism, with critics arguing that egalitarian notions of fairness are actually rooted in envy. “The common motif is that egalitarians wish to do away with the advantages of the better off, and they wish to do this because they are bothered by the very fact that the better off are better off,” the SEP explains. That is, egalitarians are driven by an amoral, envious response to the wealth of others.
In practice, however, it can be hard to sustain this attack on egalitarianism. After all, egalitarians might be “bothered” by the advantages of the wealthy, but that bother might stem from moral considerations. It’s possible that “what they feel is resentment, occasioned by the thought that the present distribution is unjust,” the SEP observes.
What do we take from all this philosophizing? A better, more rigorous definition of envy, I think. If we want to take envy seriously as a charge against progressive taxation, then we need a reasonable definition of what envy might actually entail. I think one of the best definitions that also manages to capture much of the discussion related above can be found in Immanuel Kant’s The Metaphysics of Morals (conveniently excerpted in the SEP; emphasis added by me):
Envy is the propensity to view the well-being of others with distress, even though it does not detract from one’s own. [It is] a reluctance to see our own well-being overshadowed by another’s because the standard we use to see how well off we are is not the intrinsic worth of our own well-being but how it compares with that of others. [Envy] aims, at least in terms of one’s wishes, at destroying others’ good fortune.
Distress and destruction: These are the crucial elements of envy. So, too, is the amoral, irrational nature of the emotion: Envy shouldn’t be used to describe policies with plausible moral justifications. Envy, in the words of The Wall Street Journal, is about “punishment for its own sake.”
An Awkward Fit
Using this more rigorous definition, envy appears to be a rather poor explanation for most progressive tax reforms. To be sure, such taxes are often driven by a sense of distress at rising inequality — at the wealth of others, in other words. And they are often designed to limit or even destroy the wealth that makes that inequality possible.
But the “punishment” of high or even confiscatory tax rates fails the definition of envy when the resulting revenue is used to fund spending. It fails especially when that funding is targeted toward alleviating poverty. When a political coalition that extends well into the middle and even upper classes champions a tax program that takes from the rich and gives to the poor, can that really be described as envy? Can you truly be envious on behalf of someone else? Especially when your own wealth might be a target of those taxes? If so, it’s some sort of self-hating envy — which hardly seems like envy at all.
The issue here is motivation. Any reasonably precise definition of envy must treat it as a negative, visceral emotion, not one rooted in moral considerations. When a tax is designed to advance a set of moral imperatives, then it really cannot be described as an envy tax: The point of the levy is to solve a problem, not simply to inflict pain.
Lindsey might grant this point but still insist that a tax designed with a rate that exceeds the revenue-maximizing rate must still be rooted in envy: If raising money to help the poor were the real motive, then raising the maximum amount of money would be desirable. Sacrificing revenue for the sake of a non-maximizing rate can be explained only by spite.
However, there are other reasons why lawmakers (and the voting coalitions that elect them) might care about factors other than revenue maximization. It’s possible, for instance, that a tax might be designed to limit aggregations of wealth for political reasons; more than a few politicians have argued over the course of American history that “swollen fortunes” (a favorite term of opprobrium) were the source of political corruption. True democracy, in their view, required limits on economic as well as political power, because the former often led directly to the latter.
In other words, it’s conceivable that a tax might be designed to make the rich less rich, even at the cost of lost revenue, because wealth limitation is a good thing in its own right. The politicians supporting such a leveling tax don’t have to be right about their view of personal wealth and its connection to political power. In evaluating the envy charge, they simply have to believe that they are right.
The crucial element of envy, in other words, lies in the realm of motive. If envy is going to mean anything useful, it has to mean something indefensible. If a tax is defensible on substantive policy grounds, then it isn’t really about envy at all. It may still be a bad tax — unwise, unaffordable, even deeply unfair. But it’s not a tax designed to inflict pain and punishment for its own sake.
The philosophers may be excessively picky about how they define their terms, but they are right to insist on this element in the definition of envy. Without it, envy is reduced to something much less damning. Indeed, without the amoral, pain-for-pain’s-sake quality, envy becomes a shallow complaint, applicable to any tax that burdens the rich more than the poor. Indeed, any tax scaled to ability to pay would fail the envy test, including not just income and estate levies but excise taxes on luxury goods and various property taxes. Only the flattest of flat taxes would escape the charge — a head tax, say. Once you start making progressive concessions, like a basic living allowance, you’ve conceded the concept of progressivity — and for the purpose of our envy test, when a tax is a little bit progressive, it’s akin to being a little bit pregnant.
In actual practice, the loose, colloquial meaning of envy is politically ascendant — and always has been. Partisans use it to describe the progressive taxes endorsed by their opponents — in contrast to the progressive taxes that those partisans themselves support. Your progressive taxes are all about envy — mine are about fairness and justice.
In practice, the charge of envy appears most frequently in debates about tax reform. Departures from the status quo are most likely to elicit the complaint, although old taxes are sometimes tagged with the epithet, too (as with the estate tax during the past few decades).
But for the most part, envy is simply a complaint without substance: a rhetorical tool for distinguishing your own platform from your opponent’s without engaging the substance of any issue.
Envy in Fiscal History
That’s certainly been the function of envy charges throughout American fiscal history. To be sure, envy has surfaced in past debates about wealth and taxation — repeatedly. But the development of progressive taxation in the United States, especially at the federal level, has not been driven by amoral distress at wealth differentials. Nor have progressive taxes been designed, historically, to dispossess the rich of their wealth for the simple pleasure of that dispossession.
Rather, progressive taxes have been used to support several specific goals. Most often, they have been used to redistribute the nation’s fiscal burden more equitably, as when the income tax was introduced to counterbalance regressive tariffs. They have sometimes also been employed in frankly redistributive fashion, used to fund spending programs targeting the less well-off.
Perhaps most frequently, progressive taxes have been championed as a way to pay for national security. Often, these levies have been framed in terms of shared sacrifice, with blood on the battlefield establishing a moral imperative for progressive taxation at home. As Republican Rep. Edward Little of Kansas said about rich Americans in World War I: “Let their dollars die for their country, too.”
None of these uses for progressive taxation constitute a form of envy-based policymaking. Each is rooted in meaningful and plausible justifications, which makes them inconsistent with our definition of amoral, visceral envy.
Every once in a long while, and especially during the presidency of Franklin D. Roosevelt, progressive taxes have also been defended as a way to limit wealth — to shrink the size of personal fortunes and to make rich people less rich. But even this leveling impulse has been defended in idealistic rather than visceral, amoral terms — typically as an attack on plutocracy. Roosevelt made the anti-plutocratic case with clarity in a 1935 message on tax revision:
Great accumulations of wealth cannot be justified on the basis of personal and family security. In the last analysis such accumulations amount to the perpetuation of great and undesirable concentration of control in a relatively few individuals over the employment and welfare of many, many others.
Such inherited economic power is as inconsistent with the ideals of this generation as inherited political power was inconsistent with the ideals of the generation which established our Government.
You may disagree with Roosevelt about the dangers of accumulated wealth, but you can’t dismiss such concerns as simply a form of envy.
Unless, of course, you insist on using envy in its loosest, most colloquial sense — the sense that dominates American politics. That would be understandable if you’re a politician looking for rhetorical advantage over your opponents. But if you want to take the charge of envy seriously — which, given its popularity, I think we should — then a loose definition is not especially helpful.
And a more precise definition reveals envy to be a poor interpretive framework for understanding most progressive tax reforms.