Data Science & Psychology Data Science applied to Values, Morals, Politics, & things that matter.

Equity trumps Equality in arguments about taxation

It is more effective to advocate for progressive taxation using arguments about equity or deservingness rather than arguments about how unequal American society has become.

I have written about this before, using different data, but with renewed attention being paid to rising inequality, leading liberals to continue to push for rising taxes for the rich, I feel like it bears repeating, this time with different data.    While most Americans might prefer a more equal distribution of wealth, when positing such a distribution without considering who worked harder or contributed more, I doubt any study could show that any large group of people actually care about sharing some good equally more than adhering to the principle of deservingness.  People care more that people get what they deserve than if everything is shared equally.  Indeed if anybody knows of such a study, showing the oppositve, please share it with me.

Below is a graph of questions asking "how wrong" certain violations of fairness principles are.  For example, a violation of procedural justice concerns situations like a trial being decided with misleading information or a law being made without the input of affected parties (alpha = .77).  A violation of "lack of punishment" would concern a person going unpunished for a crime (alpha = .78).  A violation of equity/deservingness concerns a person contributing to society and not being rewarded or a bonus being awarded without considering the relative contributions of employees (alpha = .76).  A violation of equality concerns some employees being paid a lot while others are paid very little or a child inheriting a lot of money while another inherits nothing (alpha = .89).

To me, the interesting thing is not that liberals care more about equality than conservatives,or that liberals care less about punishing wrongdoers.  Both facts make sense but are almost self-evident if one pays attention to politics and current events.  Rather, the most interesting thing about this data (and any other data where I've pitted equality/deservingness against equality), is that everyone, including liberals, believes that equity/deservingness is a more important principle than equality.

There are certainly caveats to this data, in that it's a limited sample and the conclusions are somewhat reliant on the questions I choose to ask.  However, this is but one of many datasets we have collected which tell the same story...that equity concerns trump equality concerns.  Moreover, I think this idea is quite "post-dictable" meaning that most people who really think about it, realize that they themselves, no matter how liberal they are, care more about equity/deservingness than they care about making things more equal.  This article from the Atlantic blog sums it up nicely:

I think very few (completely misguided) people resent “wealth” per se.  I don’t remember anyone ever begrudging Bill Gates’ wealth, either.  When people resent wealth, more often than not the resentment is directed at how the wealth is accrued rather than at who has accrued it.  In certain instances, the how and the who become one and the resentment oozes toward the individual.  I’m thinking of the Paris Hilton’s of the world in this instance.  Here’s somebody who has done nothing of substance whatsoever; her wealth was accrued by virtue of genetic lottery.  But those instances where people resent a particular person for their wealth are, I think, rather rare.

So how can liberals argue for progressive taxation as a matter of equity rather than equality?  One problem for liberals is that research on system justification suggests that conservatives are more likely to believe that wealthy investors are more like Bill Gates than Paris Hilton.  I don't have data on this (though I hope to collect it), but one example that worked for me recently is to frame progressive taxation policies in terms of rewarding work, as opposed to investment.  Conservatives value hard work and I might even go as far as to say, anecdotally, that the conservatives I know work harder than the liberals I know (see this book which is tangentially related).  Yet, we live in a country where someone who works hard for a living pays taxes at a higher rate (the income tax rate) compared to someone who happens to buy the right stock or the right real estate property at the right time, and sells it later for a gain (taxed at the capital gains rate).  Or someone who inherits millions, and lives off their investments, a la Paris Hilton.  Hard work is penalized relative to profiting by owning things.  Is that fair?

- Ravi Iyer