In an article today in The Freeman on-line, economist Steven Horwitz makes a case for allowing same-sex marriage. In doing so he makes the following statement:
Government must treat all its citizens equally, and nothing paid for with tax dollars may involve invidious discrimination.
I hasten to point out that I agree with his bottom line about allowing same-sex marriage. What I’m not sure of is his general principle quoted above. What one person regards as “invidious discrimination,” another will regard as justified discrimination.
Consider an example that my co-blogger Bryan Caplan and I (here, here, here, here, and here) have argued about and that he has convinced me on: means testing for government benefits. I had originally argued against it. That struck me as, in Steve’s terms, “invidious discrimination.” Take two people who earned the same annual wage or salary all their lives. One spent a lot of it on trips to Europe every year. The other one saved. At age 66, the one who took trips to Europe had no income from dividends, interest, or capital gains. The other one had substantial income in those three categories. Because the usual method of doing means testing is to consider annual income, the saver will be screwed by means testing. That was enough to convince me that means testing is wrong.
But if you read the last two posts cited above, you’ll see how Bryan persuaded me. I wonder which side Steve would favor. Means testing means explicitly violating equality before the law. Equality before the law is not as straightforward a principle as Steve seems to think.
READER COMMENTS
rpl
Jun 30 2011 at 3:25pm
David,
I don’t see how means testing violates the principle of equality under the law. Their situations are different, so the result of applying the law equally to them is different. You can argue about whether the rules of means testing create desirable incentives, but raising the issue of equal treatment under the law seems forced. With such a narrow definition of “equal” you would have a hard time justifying, for example, the criminal justice system punishing only those who have been convicted of crimes. After all, one guy is going to jail, and the other isn’t. It doesn’t get much more unequal than that.
Dan Carroll
Jun 30 2011 at 3:44pm
The current social security system discourages work (you can’t work and receive benefits). Adding means testing will discourage savings.
Regarding other benefit programs (like food stamps and welfare), I would advocate replacing them with a negative income tax. Simpler, discourages gaming, and government retreats from the scene. In fact, with an age-based step-up, we could replace social security with it as well.
I don’t have a problem with discrimination, as long as it is not arbitrary and capricious, based on irrelevant factors.
Steve Horwitz
Jun 30 2011 at 3:57pm
David,
Yeah, the world of the second best is a very messy place.
I will have to look at the exchange you had with Bryan, which I only vaguely recall. My gut reaction is that a debate over means testing invokes two different notions of what the relevant criterion is by which people are thought to be equal: is it simply having reached age X or is it their need for the program in question? Both could be relevant depending on how the program is intended. In other words, I might be convinced either way on that one and I’m not sure that either direction is necessarily in violation of equality before the law. That said, Bryan has a way of persuading people, so let me read it. 🙂
I think in many other cases, where the reason for inclusion or exclusion is far less relevant to what the policy/benefit is trying to accomplish, it’s easier to articulate what makes it discriminatory.
Chad Seagren
Jun 30 2011 at 4:25pm
I think if you take a step back and examine the entire social-political enterprise of the modern welfare state, relatively strict adherence to the notion of equal justice before the law can be salvaged.
For example, I’m not sure the relevant comparison for determining whether treatment is “equal” is between two similarly situated *recipients* of government largesse (i.e. the retiree that saved vs the retiree that was profligate).
In my mind, the relevant comparison is between the “contributor” and the recipient. Thus, even a superficially equal distribution of Social Security benefits for retirees fails the test of equal justice before the law because the government is transferring wealth from one group of people (current workers) to another (retirees) based on something entirely capricious like age.
This is not equal justice for the current workers. The promise that one day when *they* are retirees, the government will plunder younger workers on their behalf does not mitigate the injustice.
Costard
Jun 30 2011 at 5:19pm
Discrimination against someone who has broken the law is the prerogative of justice. Parcing punishment and reward between two equally innocent individuals, is not only unequal, it is unjust.
If you must have welfare, benefits should fall equally. Better to pay more for a law that at least satisfies one mandate of good government, than a law subverts all of them.
rpl
Jun 30 2011 at 5:46pm
Really? Restricting welfare benefits to people who are actually poor “subverts all of ‘it’ [whatever ‘it’ is meant to be]”? Come on, let’s be serious.
To reiterate, I’m not advocating for or against welfare. All I’m saying is that they’re entirely consistent with equal justice, so long as the rules are applied equally and consistently. Therefore, if you want to argue against welfare, you’ll have to argue it on its merits. Appealing to equality under the law is too glib by half.
David R. Henderson
Jun 30 2011 at 8:01pm
@Chad Seagren,
You make a good point and you do it well. There’s nothing in your comment I disagree with. The problem is the messier one of what you do with Social Security–which is really “intergenerational abuse”–when, in the short run, we have it. So you can push a button to means-test or not push it and then we don’t have means testing. If those are your only two choices, which do you choose?
Phil
Jul 1 2011 at 3:08am
My students often ask why government cannot be run more like a business (with efficiency as a primary value and with clear goals and bottom lines) and one of my several answers is that for government the means are often much more important than the ends. David’s last comment hits that nail squarely on the head. Which does one choose? Indeed.
Pandaemoni
Jul 1 2011 at 4:47am
I do agree that distinguishing mere “discrimination” from “invidious discrimination” is hand waving. All discrimination can seem invidious from someone’s subjective point of view.
The real distinction that I believe the law is going for, though, is no less subjective. The lawyers would like to claim that discrimination violates equal protection when the classifications used to determine disparate treatment are merely pretexts for an emotionally driven bias rather than reasonable criteria on which to base some distinction. The problem is that a classification can be reasonable (or at least arguably so), and yet still have “really” been selected to allow a legislator to punish or oppress a group they disfavor.
It’s certainly not just inherent traits alone. A child or a person with Down’s Syndrome cannot help being that but his rights are more circumscribed under the law. A black man cannot help what race he is, and thus the law forbids discrimination against him to be built into the laws. The law tries to accommodate this by having different “levels” of judicial scrutiny for different classifications. Laws that impinge on someone’s freedom based on race, ethnicity, religion or national origin must survive “strict scrutiny” (a standard so rigorous that the only laws ever to survive it AFAIK is the executive order to round up and detain Japanese-Americans during WWII). For children, mentally handicapped and most everything else, there only needs to be a “reasonable basis” for the use of the classification in the law. (There is a third standard that is informally known as “intermediate scrutiny” that covers laws related to gender, illegitimacy and a few other classes.)
Short of amending the Constitution to eliminate the equal protection clause, or developing a device that allows us to see into men’s hearts, I think we will continue for a long while yet to use vague terminology. The real goal is to allow judges to prevent what they view as “bad” discrimination by legislatures and permit it when it is “benign.”
Under that standard, though, distinguishing who gets money based on the criteria “who needs money” would probably survive rational basis scrutiny. That said, I am not one of those libertarians who believes that the market would have eliminated Jim Crow laws in the South through their suboptimal economic effects (although I would admit that the market perhaps would have done it over the course of several centuries). I’m also not sure there was any palatable alternative to passing the Voting Rights Act for similar reasons.
Adam
Jul 1 2011 at 11:22am
David: You gave up the argument for universality too easily. How is “cost” a principled argument against universal coverage for food stamps or social security? The ethical, social, and incentives problems with such selective redistribution schemes are far greater than their “cost”.
Universality is one way to filter out or eliminate immoral programs and laws–laws that sanction group behavior that is illegal when evaluated at the individual level (e.g., taking what’s created by one to give to another). Universality is one way to implement Buchanan’s unanimity principle for those of us not directly involved in making law–for those of us who are not elected representatives and not voting on this or that specific program and law.
Chad Seagren
Jul 1 2011 at 5:57pm
@David, I first read your post as questioning whether the principle of equality before the law is still relevant or useful in the current political environment, which now I can see was not quite your point.
To answer your question, if I could push a button, I would push the button to means-test all the entitlement programs, because the programs would then be substantially less wasteful. A less wasteful welfare state *might* mean less unequal taxation which would be a good thing in my opinion.
I wonder if Buchanan’s distinction between the protective and the productive state is helpful here. When dealing with the protective state, it is absolutely critical that everyone enjoys equal justice before the law. We don’t want people being locked up because they are rich or poor, majority or minority, etc, for the same offenses. Part of the protective state’s role is to enforce contracts, so to the extent that the State weighs in on the content of those contracts differently for different people in a capricious way (i.e. recognizing marriage contracts only between heterosexual couples) then this is highly offensive to the concept of equal justice, and would be an example of invidious discrimination.
However, in the dealings and machinations of the productive state, it is much less clear. Much of the activity of the productive state is outside what libertarians would consider valid functions of government, thus it is possible that limiting the largesse to small groups – thus violating equal treatment for those on the receiving end – is actually morally superior, because it results in a smaller tax burden for those from whom the taxes are collected. So, means testing entitlements like Social Security and Medicare make sense. In other words, when the State already exceeds its appropriate bounds, all steps taken to reduce the magnitude of the transfer is appropriate, even if it means that only a very small and arbitrary number/class of people will receive the benefit.
Ed Reid
Jul 2 2011 at 12:26pm
I continue to be fascinated by those who seek to treat programs such as Social Security and Medicare as being the same as, or similar to, welfare and Medicaid.
First, Social Security and Medicare recipients and their employers have taken specific actions under the law based on the “promise” (though not the guarantee) of specific government responses to those actions at a specific time in the future. Classically, those actions have “entitled” the beneficiaries of SS and Medicare, under the respective laws, to the “promised” benefits. There is no such “quid pro quo” in the case of welfare programs and Medicaid.
Second, at least theoretically, the beneficiaries of Social Security and Medicare and their employers made payments into the two programs which exceeded the current outlays of the programs, thus permitting the two programs to accumulate surpluses in “(dis)trust funds”, which would then be used to fund their benefits in retirement.
Third, both Social Security and Medicare are already means tested. Social Security benefits for low income participants are proportionately higher than for higher income participants; and, 85% of SS benefits paid to beneficiaries with other sources of income are taxable as regular income. Medicare taxes apply to 100% of wage income, thus falling more heavily (in absolute terms) on higher wage earners, while benefits are the same for all beneficiaries.
Apparently, some believe that the current forms and levels of means testing for the two “entitlement” programs are insufficient. Perhaps, more accurately, they believe that the programs have now become financially inconvenient, either because the programs were not actuarially sound, or because the (dis)trust funds contain nothing of real value at the time when they are necessary to provide the “promised” program benefits.
There is a significant difference (at least in my mind) between not gratuitously providing welfare benefits to those who do not need those benefits and not providing statutorily established benefits to those who have “earned” the benefits under the statutes.
NOTE: I am currently a beneficiary of both SS and Medicare, after paying (along with my employers, including myself) into both programs for my entire working life.
Troy Camplin
Jul 3 2011 at 8:14am
It seems to me that true equality under the law means everyone is treated exactly the same by the law. If you commit a first degree murder, whether you are a Congressman or homeless, you get the same time in prison. Those are the easy ones, though. I would argue that equality under the law for taxation would necessarily mean that everyone pays the same percentage. Period. No exceptions. As for receipt of “benefits”, I think the only way one can justify them under equality under the law is if everyone receives them. I know that Hayek argues that equality under the law is not violated if there is some objective criteria for it (you reach 65, you make under $15,000/yr, etc.), but to my mind that means people are in fact being treated unequally for a variety of reasons (age, wealth, etc.), which we should always avoid. If you have variation based on wealth, why stop with benefits? You can also argue for different tax rates, or even for different levels of incarceration for first degree murder. After all, if it is theoretically possible to make $1 million a year, then wouldn’t everyone be equal under the law if millionaires could get away free with murder, while we gave the electric chair to everyone else? If not for things such as murder, why for benefits? I want a non-arbitrary, non-emotional answer.
Ed Reid
Jul 3 2011 at 11:33am
Troy,
Either the Fair Tax or the Flat Tax would address your point regarding equality under the law for taxation. However, our congresscritters are far too comfortable with their ability to influence elections by allocating “goodies” to allow either of those to become the law of the land. Either approach would also satisfy my preference that everyone “have some skin in the game”.
I suspect Hayek would have argued against both SS and Medicare. However, it is a little late in the game to worry about that issue. Both programs already provide “means tested” benefits, though only to those who have paid the programs’ designated taxes. Medicaid, food stamps, welfare, the earned income tax credit, etc., either provide benefits to those who are not currently contributing to the funding of the benefits or offset the taxes of those who would otherwise be funding those benefits only marginally. In some cases, they provide benefits to those who have never contributed to the funding of the government. Currently, about 47% of potential income tax payers fall under these programs. As one wag put it, the “safety net” has become a “hammock”. While Hayek might have tolerated the “safety net”, I doubt he would have accepted the “hammock” cheerfully.
I had to laugh at your comment about millionaires getting away free with murder. How very un-progressive of you! It has become progressive “dogma” that millionaires and billionaires are “fortunate”, or “have won life’s lottery”. They are never credited with imagination, industriousness, effort, prudence, etc. The progressive approach would be to give them the electric chair for murder and let everyone else off free. Rather obviously, neither approach would satisfy “equality under the law”.
The incongruities of our current situation become obvious when they are viewed as a whole. This is one of the primary reasons why the current situation has had to be built piecemeal.
Troy Camplin
Jul 3 2011 at 4:02pm
Indeed, your last point was precisely mine. 🙂
I’m against taxation in general, but in favor of the fair tax if we are talking second best. I also get your point about having skin in the game. I think it helps if everyone has to buy into the system. It solves the “why are these cops out here harassing us” mentality that arises when you don’t pay the taxes that pay their salaries (you see the police as sent by someone else who paid for them). On the other hand, if we didn’t have the police harassing people for petty nonsense (among which I include drugs), people wouldn’t mind them as much, either.
Arthur_500
Jul 8 2011 at 1:36pm
What equality? There has never been any pretense of equality, nor should there be.
No one has rules on the books any more stating that a couple cannot be united in a marriage. However, marriage means different things to different users of the term.
A church may discriminate in a marriage based on religous tenents. A State may discriminate in a marriage based on the benefit or lack of benefit a State invests in a marriage. If there is no benefit or problem then the State has no reason or interest in a marriage.
The issue is the treatment of marriage in economic benefit to the married couple and the percieved benefit of this to the State. A couple that cannot have a normal family unit for the raising of children cannot provide benefit to the State so they would be discriminated against.
this is not unlike any other discrimination in our society. We pick an age after which an individual may no longer be a commercial pilot. this is done for overall safety and is deemed in the best interest of the State to enforce this arbitrary limitation. We choose specific gtraits for the military because the State has determined this is all they desire.
Gay marriage has no benefit to the State so should be discriminated against. On the other hand, maybe we should treat everyone equally and keep the State, and benefits, out of marriage.
Of course this would eliminate virtually all Gay Marriage since there would no longer be any economic benefit to that status.
Equality has never existed in our tax code and never will. Any pretense is wholly incorrect.
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