PRESTOPUNDIT -- "An intense brain-buzz, guaranteed" (2blowhards)

Hayek and the Flat Tax. Hayek has a note on the history of the case against progressive taxation on p. 516 of The Constitution of Liberty. He notes that by 1950 there were hardly any economists still around who stood against progressive taxation "on principle" (Hayek lists only Mises & Lutz). The original "scientific" case for progressive taxation using the logic of marginal valuaion was made by Hayek's teacher, Friedrich Weiser. The arguments of Weiser, those also of Edgeworth, and additional political considerations all but swept the field among professional economists.

Hayek suggests that the (intellectual) tide against the case for progressive taxation began to turn only with the work of D. Wright in 1948 and most especially with that of W. Blum and H. Kalven, Jr. in a 1952 U. of Chicago Law Review article. Hayek's own case against progressive taxation comes down to three principle considerations: 1) progressive taxation is an arbitrary abridgement of an individual's right to equality before the law -- individuals are victimized by the political process without any boundary in justice upon confiscation, such as would be provided by the usual standard of equality before the law. 2) Progressive taxation "creates a state of things in which one class imposes on another burdens which it is not asked to share, and impels the State into vast schemes of extravagance, under the belief that the whole costs will be thrown upon others" (Hayek quoting W. Lecky) 3) progressive taxation leads to a violation of the principle of "equal pay for equal work" for non-salaried individuals, resulting in the perversity across the tax year that "the more the consumers value a man's services, the less worthwhile will it be for him to exert himself" (F. Hayek, 1960, p. 317).

Comments from folk familiar with the work of Wright, Democracy and Progress and Blum and Kalven, The Uneasy Case for Progressive Taxation, would be most welcome. More later.