12

Alexander Fraser Tytler famously said:

"A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy."

This warning is echoed by Robert Michels

"Historical evolution mocks all the prophylactic measures that have been adopted for the prevention of oligarchy." Michels stated that the official goal of representative democracy of eliminating elite rule was impossible, that representative democracy is a fa├žade legitimizing the rule of a particular elite, and that elite rule, that he refers to as oligarchy, is inevitable.

If representative democracy is doomed either by collapse, or by rule of the bureaucracy, what benefits/drawbacks of embracing a plutocracy with each person's vote weighted by how much taxes an individual pays into the federal governments treasury. Using 2009 statistics for example, and ignoring all federal taxes other than income tax (you get slightly different numbers when you consider all federal taxes), the Top 1% would have a 36.73% controlling interest in the federal government and the Bottom 50% would have a 2.25% controlling interest. The average Top 1%er's vote would be weighted to be worth 18 times the average Bottom %50er's vote.

                  Top 0.1%|  Top 1%|  Top 5%| Top 10%|Top 25%|Top 50%|Bottom 50%|
                ----------+--------+--------+--------+-------+-------+----------+
Min AGI to fall $1,432,890|$343,927|$154,643|$112,124|$66,193|$32,396|        $0|
into percentile 
Total Income        17.11%|  36.73%|  58.66%|  70.47%| 87.30%| 97.75%|     2.25%|
Tax Shares

This would be very similar to the way that publicly held company stock gives weighted voting to shareholders. The difference being that the shareholders (tax payers) votes would be weighted by how many shares (tax dollars) they paid into the company (federal government).

In all elections of directors, each shareholder shall have the right to vote the number of shares owned by him for as many persons as there are directors to be elected [...] and in deciding all other questions at meetings of shareholders, each shareholder shall be entitled to one vote on each share of stock held by him; [...]

What are the benefits/drawbacks of a weighted vote based upon federal taxes paid?

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    I suppose the benefit is that those with money would be able to influence policy much more directly than the current system of lobbying and donations. The drawback is that that those with money would be able to influence policy much more directly. – user1530 Jul 6 '13 at 21:43
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    The chief drawback is that it stops being a democracy. The second drawback is that essentially someone could buy votes. The third is that the same principle you cited applies - "It can only exist until the [majority stakeholders] discover they can vote themselves largess out of the public treasury." i.e. the rich find out they can vote themselves more money. My guess is that would happen around minute number 2. – DJClayworth Aug 8 '13 at 18:41
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    No answer should be voted up to this question that doesn't have an actual analysis to back it up. – DJClayworth Aug 8 '13 at 18:46
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    Would it still be a democracy? Probably not. – Trilarion Aug 27 '19 at 19:50
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    @Trilarion - I was going to comment that this is incorrectly tagged. – PoloHoleSet Aug 27 '19 at 19:50

11 Answers 11

16

At a very simple level, the answer is that not all rights are financial.

While it would be simple enough to argue, "You should get as many votes on next year's taxes as you paid this year," it is much harder to argue the logic "You should have more of a say in how we treat Russia" or even "How / Should we regulate abortion" in relation to your contribution to the country's finances.

For fiscal matters, it is reasonable to say if you pay more, you get more control- but not everything is fiscal. Even policy matters like health care and OASDI, while definitely funded fiscally, disproportionately affect poorer people more than rich ones. Thus, from a purely utilitarian perspective, you have precisely negated what would be a better self-directed outcome. In many ways, economists argue that the poor are better able to decide how they should direct their benefits than the wealthy who pay for them.

Plutocracy is thus at odds with self determination, utilitarianism, and efficiency.

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    "economists argue that the poor are better able to decide how they should direct their benefits than the wealthy who pay for them." I don't think I have ever seen an economist argue that. I have heard the utility of spending money decreases as you move from your money you spend for yourself, to your money you spend for other people, to other peoples money you spend for yourself, to other people money you spend for other people. But, this argument isn't anywhere near what you are saying some economists claim. – user1873 Aug 12 '13 at 4:48
  • @user1873 That's good point, and so I've updated my answer to give examples. In each of the articles I linked to, there are economists who are making the cases I show above. – Affable Geek Aug 12 '13 at 11:03
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    Okay, I had so much fun doing that response, that I actually turned it into a new question. Double thank you!!! – Affable Geek Aug 12 '13 at 11:22
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As a mathematican I would mention simple mathematical convergency.

Let's assume if you have political power in a corrupt state (and I am convinced that non-corrupt state is way less likely to develop in this inequality), you can extend your wealth by using your influence. In the same time social tax decrease the small taxes or just delete them. In the same time non-taxing people will be happy in the first time, they can keep more money, but they won't be represented in authorities. The biggest fishes are growing even bigger, and as their power increasing the paid tax and influence increasing. If you paid for example 1000 coins of tax from 10000 coins salary, you won't mind paying 1500 coins of tax from 20000 coins salary while you have people in the country who try to survive out of 10 coins, and they will be happy if they can keep 1 extra coin every month by deleting their taxes.

Imagine a society like this, this is pure and perfect plutocracy. After decades the money will be purely just representative of power, and of course it is inflatable, after awhile the poor people never have enough power to match up a single rich person. Therefore it is convergent to a dictatorship of few rich people.

Furthermore if they want to erease the thin middle class, it will be easier than ever. Raise their taxes to 95%, if they earn 1% of the average richer class, the rich has to pay more than 0.95% of tax, and their power is still bigger than middle class' vote power. The middle class is doomed.

Of course I used magnifying of the effects, but generally this would happen in longer term by using simple clear mind.

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  • This is true but in the US it would require a coalition of 435 people to do this and take total control of the government – SoylentGray Sep 12 '13 at 17:06
  • @Chad however concentration of power required, it can be gathered by convergency this way. First the lowest income people are dropped out from government, then the middle class. I guess the top few percent can agree in absolute power. And from that point it is not democracy, it is plutocracy. – CsBalazsHungary Sep 13 '13 at 7:48
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    And it wouldnt take long for that elite group to start removing some of its weaker members by restructuring the laws... – SoylentGray Sep 13 '13 at 13:53
5

The simple flaw in allocating voting power by economic wealth is that it leads to systems of government that have already been tried and rejected by most civilised countries.

Aristocracy is the sort of form of government the USA was created to avoid. It enabled the people with power to dominate others purely for their own benefit without constraint. If the rich were in control they would tend to vote in their own interest and that would, in effect, create an aristocracy which sought protection of its own current interests rather than the betterment of the whole society.

Part of the problem is that wealth is not a zero sum game: some forms of society create far more collective wealth than others. Historically, the ones that spread the power around have created far more wealth than the ones where an elite hoarded economic power. And given more power to those who already have wealth is likely to tend to concentrate power over time.

Those counties where an elite can manage the economy in their own interest exist now, though usually because of corruption or dictatorship not because the voting system is designed this way. We tend to call them kleptocracies as the entire economy is bent in their interests. They are not notable for being good places to live or for having successful economies.

Societies function well when they have the consent of the people who live in them. That consent is damaged when voting is disproportionately controlled by a small elite. This control reduces the possibility that an average person can be successful and therefore their consent to the political system. That is not a good basis for a stable society. Revolutions have happened for less.

There is also a moral objection. Voting and democracy are not everything. There are standards of justice that transcend democracy. We should not be allowed to discriminate against people just because they are in a minority. But such discrimination is far easier to impose if voting itself is heavily concentrated. Dispersed voting is less likely to violate the more fundamental rules of justice.

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1

To preface, one should question the sentiment in those you have quoted. It seems unduly pessimistic, and doesn't match the diverse reality of how democracy has evolved in the western world over the last two centuries. They are statements of opinion rather than observations of fact.

As for the question of what would be up and down sides for voting rights based on taxed income? I find this a terrifying idea, because research has shown that generally there is direct correlation between wealth and entitlement, narcissism, arrogance, cheating, and exploitation formally known as the "asshole effect". So the wealthiest voters are generally going to be completely unfit for political decision making. This proposal will also completely disenfranchise the majority of working class and middle class voters, and empower those who will be utterly alienated from the consequences of exploiting them. I cannot see how national unity could be maintained under such a system.

One also has to question the premise that the wealthiest are the most deserving. The assumption often made is that the wealthy are more qualified as their wealth is evidence of competence. But this assumption is highly problematic, because after a certain threshold is crossed one can simply hire professionals to manage their wealth, or invest it and walk away, and still become wealthier over time without ever doing anything personally to deserve it. There is strong correlation between the wealth of parents and that of their children (other things like education and location also factor), which further erodes the idea of wealth as a qualification of merit.

It's also worth noting the richest people in the world tend to come from the richest families in the world. Few came from the working class (the majority). Bill Gates is an interesting example, who seems typical of wealth creation. His family were by no means poor; both his parents were successful business people, and he had exceptional access to early computing. In these contexts it becomes obvious that these individuals would of course do exceptionally well. A working class Bill Gates or Donald Trump would very likely never have become billionaires, and possibly not even escaped their class.

But his pre-college life was blessed, computationally speaking. He was bored at his Seattle school in eighth grade in 1968, so his parents switched him to a private school that happened to have a terminal linked to a mainframe computer. Gates became one of a small number of people anywhere who had substantial time to explore a high-powered computer. His luck continued for the next six years. He was allowed to have free programming time in exchange for testing the software of a local company; he regularly sneaked out of his house at three in the morning to go to the University of Washington computer centre to take advantage of machine time made available to the public at that hour. It is unlikely that there was another teenager in the world who had the kind of access to computers that Gates had.

What further compounds the problem is Thomas Piketty's observation that over all of capitalist history private wealth grows faster than the economy; thus naturally inequality rises. Add to this as mentioned prior, old money predominates new money, and wealth tends to correlate inversely with good character and judgement. This suggests the entire premise of tying wealth to votes is asking for trouble.

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    This is the only correct answer here. Unfortunately in my experience, Politics stack has significant population of determined libertarians impressing snowball effect on users with less well defined views. – M i ech Aug 21 '19 at 8:44
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    @Miech Which, when you think about it, doesn't make any sense, if we assume most of the capitalist/libertarians are coming from the programming side of Stack... then surely these people are more aware than most that their ability to create value relies upon the work/code of others! And thus should be more aware of economic interdependency. Another example of our human tendency towards illogic. – inappropriateCode Aug 21 '19 at 10:20
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    Not if they are successful. I couldn't find paper(s) on which following TED talk was based (ted.com/talks/paul_piff_does_money_make_you_mean), but Paul K Piff has quite a bit of corpus of research on social behaviours. One of findings is that success and wealth promote entitlement and selfishness (as in, it's not just selfish being drawn to jobs giving wealth and status, but also wealth and status having essentially corrupting properties). – M i ech Aug 21 '19 at 13:53
1

The other answers cover most everything... except that not all fortunes were acquired through virtue.

For the sake of argument let's imagine we had an electorate of only two taxpayers, whom we'll expositionally dub Mr. Hardwork and Mr. Grift. Of the two Mr. Hardwork does much more work, (creating more economic value), and should earn more, but the lazier Mr. Grift earns more because he's clever and unscrupulous and somehow always manages to make it seem as though he does more. In a system with tax-based weighted voting, Mr. Grift would enjoy greater voting power, which of course he'd use only to his advantage.

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  • It's not clear why Mr. Grift makes more money but does not add more economic value. – JJJ Aug 23 '19 at 16:53
  • @JJJ, Quoting the answer "Of the two Mr. Hardwork does much more work"... which is meant to imply that Mr. Grift does in fact do some work, which would add more value to the economy than if he did no work at all. But Mr. Grift does much less work than Mr. Hardwork. – agc Aug 24 '19 at 3:32
1

the majority always votes for the candidate promising the most benefits

Even in the most recent US election, the winner was not the candidate that offered the most welfare. In fact he was among those who offered the least. There is a long history in many countries of electing leaders because they promise to reduce benefits directly or indirectly (by lowering tax). So I think we can discard this quote as hyperbole.

If by benefits you mean not welfare and other handouts but general "benefits" such as lower crime, stronger economy and better governance - well, of course they vote for the candidate that promises the best situation for them. That's the point.

In fact, the problem with weighted systems is closer to the quote from Tytler. The first politician who promises to increase the weight of lower-weighted classes easily gets their vote. All you have to do is find a number x such that people paying less than x tax make up 50% of the vote, then promise to give more voting power to them and less to the rest. The same process has worked successfully in extending suffrage to many classes, not just income classes: Commoners, non-land owners, minorities, women. In many cases the weights were binary: You either had a vote or not. The democratization still worked, because you can have political influence without voting. In a weighted vote system it would work even faster, because the less-enfranchised classes can utilize direct methods (voting) in addition to indirect methods (eg. campaigning and protests). A weighted system would have a very short half-life - and historically, it has been a brief transition period.

In addition, there are various cons to such a system:

  • Because income correlates with race, it would create a racist system.
  • It would skew the economy, as people try to defer their taxes to the election season.
  • Wealthy people would abuse the lower classes, which further increases their power.
  • Dual-citizens with foreign allegiance could easily subvert the country.
  • Tax evaders would be unfairly disenfranchised.
  • It creates a mechanism for literal buying of votes - simply gift large sums to each other with your friend to artificially inflate your income tax.
  • It distracts the IRS from its primary function of ensuring that everyone pays their correct tax. Now the IRS also becomes election fraud police, which should really be a separate agency's job.

In fact, it is hard to see who would benefit from such a system. Perhaps the very wealthy, because they get to influence politics more easily? But they can already easily influence them, both through their connections to the establishment, through large donations, lobbying and the ability to control the media and fund large movements.

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-1

There are pros, cons, and observations associated with this approach. Taking the American model as an example that the middle class and upper classes pay almost all income taxes in America, assumptions are that this voting block would vote their economical interests. Further assume that this would lead to shrinkage or near elimination of the welfare and social spending on Medicaid, Medicare, Social Security and Disability, and most welfare related programs.

Pros:

Stopping taxation of the unborn through deficit spending: (Almost all deficit spending is related to social welfare spending).

Civil society crowding out the federal government: Expect more reliance on family (including extended), friendships, marriage, civil groups, schools, religious groups, charity, and more local forms of government. As many social diseases are correlated to broken families, expect less crime, reduction in teen pregnancy, less single mother homes, less suicide, less drug use. I would also expect less social anxiety disorders. And perhaps less social isolation and loneliness.

Elimination of progressive taxation: One should expect that the tax base would be expanded for two reasons, 1) that the middle class and upper classes would not stand for carrying the burden for about 50% of Americans and 2) there would be an effort to expand the franchise as a pro-democracy move, even if symbolic or illusory. Having most people pay something in federal taxes would tend to restrict entitlement and resentment of other's wealth, and to foster ideas of community.

More globalization: The middle class and upper classes especially have a tremendous interest vested in maintaining a global Pax Americana, where roughly the liberal order and rule of law are maintained and strengthened by reliance on peace and arm treaties, mutual defense pacts and organizations like NATO (perhaps a re-emergence of SEATO?), the UN, and most notably American military might.

Cons:

Less intelligent decision making:

If you put together a big enough and diverse group of people and ask them to make decisions affecting general matters of general interest, that group's decisions over time will be intellectually superior to the isolated individual (or by extension smaller group) no matter how smart or well informed he is. James Surowiecki, The Wisdom of Crowds.

Surowiecki illuminates one of the reasons that markets and democracies thrive relative to more autocratic systems like socialism with fewer decision makers. If you restrict the privilege expect not being able to tap into these intellectual pools and spontaneous emergent natural orders.

Less advanced weapon systems: Will McNeill in The Pursuit of Power: Technology, Armed Force, and Society since A.D. 1000. explored technology through recorded history into present day. What he painstakingly detailed is that the more free a society is the more likely it will innovate weapons to defend itself. Sort of a very specific corollary to the Wisdom of Crowds.

More mass immigration: Side effect of globalization is a pressure to expand markets, especially labor markets, although this would be tempered by the lack of social benefits. In any event, immigration creates social distrust and societal centripetal forces even among in group populations.

More war: Precipitated by removing a key element that tempers war, active participation in the Armed Forces. While the composition of the armed forces come from all walks of life, there is no doubt that a substantial cohort is made up of the lower classes. In addition, defending the global order is indeed hard work, especially in the short term.

Chance of revolution: Undoubtedly such a system will produce it's fair share of discontents, no matter how many gains in civil society would be produced, especially if it is compounded by mass movements of cheap labor and more war.

Observations:

Corruption reduction I would call a wash. Undoubtedly there is a sea of corruption in the Welfare industrial sector of our society. Corruption in one government program, the EITC, is greater than what the US spends in 4 large administrative blocks that have cabinet leadership. Nevertheless, you would likely replace it with corruption of a more autocratic government through cronyism and client seeking. China's corruption, for example is legendary, as is Qatar's. I don't know if vote buying or top down corruption is any worse.

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A government exists to spend money (of course am HUGELY simplifying here....), at the moment everybody gets one vote to have a say in how this money gets spent.

Now there could potentially arise a problem where voters who are contributing nothing at all to running the government are such a big voting bloc they can end up voting themselves more and more money to be spend on themselves (or whatever pet projects it is that they support).

This might even turn into a vicious cycle of more and more people voting for "money for nothing" until the government goes bust.

I'd assume this would be a primary reason why supporters of votes being proportional to taxes paid like their idea.

To them it somehow seems "fairer" that people get a say in how to spend the money which they've contributed themselves. (each dollar of contribution a person makes to the government they then get one dollar's worth of voting influence on how to best spend "their dollar")

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  • At which point why bother with government at all? Just spend your money where you think it will do the most good rather than dealing with the overhead of a massive bureaucracy spending a dollar (minus overhead costs) where you think it will do the most good - replace most government taxation with voluntary donation to whatever organization you think will make the best use out of it. I don't think paper-pushing overhead is where anyone really wants the money to be spent. – pluckedkiwi Jun 30 '16 at 17:20
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    Because many people will disagree with you and you don't outgun them. – user4951 Apr 15 '18 at 3:48
  • Re "contributing nothing": this answer artlessly conflates the topical monetization of some of a nation's resources with that nation's actual wealth. It therefore ranks the greatest of that nation's indigent soldiers, scholars, artists, authors, musicians, inventors, etc., its virtual saints and national treasures, as beneath even its burger flippers and lowest tier multi-level marketers. – agc Feb 15 at 19:33
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On a very practical level, one would assume that to effectively weight a vote based on economic status, that vote would have to be linked in someway to tax records to allow the Electoral Commission to give that vote the correct weighting. It is my understanding that most voting systems are based on a secret ballot, which immediately rules out any sort of economic weighting to the vote system.

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  • The system proposed above does not specify the need for a secret ballot. And even in the US not all voting is secret. – SoylentGray Sep 12 '13 at 17:09
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    I'm not familiar with US voting system, but to my mind having each individuals voting patterns linked to their tax records just seems very wrong to me. Having that type of information available would be way to easy for all sorts of corrupt behaviour to begin. – Nathan Fisher Sep 13 '13 at 0:30
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    I agree but then again we have that corrupt behavior with the existing system – SoylentGray Sep 13 '13 at 13:54
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I see only benefits of such a system without any major drawbacks in the long run. As a mathematically interested person I see a convergence in this system (as CsBalazsHungary already stated in his answer) but I see a very different kind of convergence.

Let's start with, what money and (income) taxes really are. Money represents real goods (including services). Money can have a value only as long as it is regarded by the people as equivalent to a certain amount of goods. We receive money for the goods we created during work. (Income) taxes are thus an abstraction of a part of the goods we created with our work.

Now, what is government? It uses the taxes, (goods taken away from workers), to impose rules and to redistribute them to others. These others are often workers but also often non-workers, who just consume the work of others. If everybody is self interested, somebody who pays little or no taxes will vote to receive more of the redistribution than he pays. This is effectively happening today, making the US and European societies ever more socialist. See the increased tax rates in the last 60 years or so.

I will use the phrase "working people" for exactly what it says and not meaning only working class people. Anybody who works for his money is workig people for me.

Now to the convergence:

  1. If government is controlled proportionally by the people who pay taxes, the total tax level will lower itself because the people who pay will try to reduce their burden. In a stark contrast to the current system, the tax payers do not have incentive to introduce ever newer and higher taxes that allow ever more rules and redistribution. However this lowering of taxes has its obvious limits, because at least the basic role of the state must be performed (military, police, etc). The convergence point will be decided by the tax payers, depending on how much service they want.

  2. Currently the government is controlled by corporations/persons with proportionally a lot more to say through lobbying than they contribute in taxes. This is easy to prove (imho) logically. E.g. the military-industrial complex lives mostly of tax money. Even if they pay lets say 30% of their profit as taxes, this will be a very tiny portion of the whole tax take, because they live off taxes, and taxes are used also for other things. So effectively they would be unable to vote themselves anything with their own votes! But they are able to do exactly this through lobbying. The voices of the working people will be heard and if they e.g. do not want war (which I very strongly assume), there will be none. So the system will converge to sanity in the sense of working people, instead of special interests.

  3. Convergence of the tax distribution. The distribution of tax payed by the rich/middle/poor will probably get more even because everybody would try to push taxes to other groups. But this has serious limits, since the group to pay more taxes has also more to say. I expect an equilibrium here, where everybody will pay approximately the same percentage of his/her income. (an effective flat rate tax)

Final thoughts: I regard the above points as positive because a minimal government for the sake of the working people is what makes the world more stable and livable. This kind of democracy is not democracy in todays sense but it is a lot more just.

Big government for the sake of special interest groups and inactive population is only crony democracy and it is not worth a dime. It is in fact morally despicable because it steals money from the people to distribute it to cronies.

Small governement reduces corruption of the rich (cronyism) and of the poor (welfare).

Juctice is more important than anybody's definition of "real" democracy.

People can only make serious decisions regarding their own money. Spending other people's money is always cheap.

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  • Re "Small government reduces...": this motto seems questionable if such a small government were to be dwarfed by either other larger nations, (who that small government must dread), or larger and more powerful corporations who can bully inferior governments and by doing so become de facto governments themselves. Neither outcome would tend towards justice... – agc Feb 15 at 19:12
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I don't see any drawbacks as long as your vote is weighted by the taxes you paid as a PERCENTAGE of your income, not whole dollar amounts.

Q: Well, wouldn't the politicians then only care about legislating in favor of the wealthy?

A: No. Even if politicians change the tax system so that rich pay a little and poor pay nothing, just so that the rich have all the say, remember that when you file your taxes next year, you can always send the IRS whatever you want in excess of your taxes owed. So, the fact that you don't owe any taxes, does not mean that politicians get to take away your vote. Politicians would still have to take care of those in the lower classes who choose to pay taxes in excess of their 0% owed, because those people also get to vote. People choosing to pay taxes because they care? Sounds like a dream come true!

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    A poor person that doesn't pay INCOME taxes doesn't pay income taxes because they haven't earned the money to do so...meaning there isn't extra money laying around to 'buy' a vote next time. Plus, if you're counting % of income that is taxed, then that'd be mostly the poor anyways, as they typically spend 100% of their income which is therefore nearly 100% taxed in the form of sales tax. – user1530 Sep 29 '15 at 8:38
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    I really like the idea of this answer. I think it would run into a serious problem in that people would have to give up significant quantities of money for a vote that is still fairly unlikely to be the deciding vote in an election. The free rider problem would probably keep this from working; anyone can just pay as few taxes as possible and rely on others to pay more, vote, and implement good policy. – lazarusL Sep 29 '15 at 14:36
  • @lazarusL I'm not sure I follow. How is "rely on others to pay more, vote, and implement good policy" a bad thing? – AxiomaticNexus Sep 29 '15 at 20:11
  • I'm suggesting not enough people will pay more, vote, and implement good policy and the system will be plagued by small voter turnout and thus corruption by special interests. This is because it seems to me that the incentives are aligned in a way that encourages free riding. – lazarusL Sep 30 '15 at 19:46
  • @lazarusL Small voter turn out is not a bad thing, especially when the ones voting are the well informed and the ones who care. A bad thing is a high turn out of uninformed voters who vote for the sake of voting. I don't see how it translates into corruption by special interests either, you should elaborate more on that. As far as "free riding" goes, I think it encourages the complete opposite. Wouldn't "free riding" require people to exploit a system without paying for it? This is the complete opposite, effectively eliminating "free riding" entirely. – AxiomaticNexus Sep 30 '15 at 22:48

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