I always hated whenever people tell me “Life isn’t fair,” because it seems like what they are really saying is “I am screwing you and you can’t do anything about it.” If life weren’t fair, I’m not sure I could get up in the morning.
And yes, I know, right now babies are dying in their mothers’ arms because they can’t get clean water, and no one can do anything about it.
I instead think that life is random, and mathematically speaking, a truly random distribution is fair. I did nothing to ensure that I would be born where I was, to the family I was born into, with the genes that I have. There’s no reason my soul was wrapped up in absurdly sensitive skin and deposited in Youngstown, Ohio with ambitious middle-class parents. It just happened. Most good and bad things that happen to us are rooted in a random process, starting with what Warren Buffett calls the Lucky Sperm Club.
Likewise, illness isn’t divine retribution. You’re a grown up when you realize that even people who do everything “right” get sick and die long before their time, for no real reason other than that their number came up that day. You want to bargain and cut deals and explain to God that a terrible mistake is being made, but really, there’s no reason someone else should die instead of your loved one.
As Benjamin Franklin said, death is one of only two sure things in life. The other sure thing is taxes.
In my view of the world, we confuse fairness, which is random, with justice, which assumes that there is a system of rewards and punishments distributed based on behavior. It assumes that there is a state of the world that we want, and that we need to allocate resources accordingly.
Many hedge fund managers work really hard, but so do people living in the slums of Kolkata or in Chinese forced labor camps. Money isn’t a measure of how good you are or how hard you work. The hedge funder’s position in the world may be fair, but is it just? In economics, a Pareto optimal distribution is one in which no one can be made better off without someone being made worse off. A world in which one person has everything and everyone else has nothing may be optimal, it may be fair, but is it just?
And that, to me, is where we go off the rails in discussions of tax policy.
Anyway, I’m still writing about taxes and why they are so complicated. My workload is easing up, too, so you’ll see more issues of The Whatever Years soon. Tell your friends!
And, if you like, give me your tax questions. Not a week goes by when I’m not reading IRS regs, which is saying something because I am not a CPA.
Fairness, like beauty, is in the eye of the beholder. The person who thinks "I should have more and they should have less" perceives fairness differently that the person who says "I'm grateful for what I have when so many others have less."