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"Fairness' conveniently in the eye of taxpayer

I guess any time I feel lonesome, I can write another column rooting for repeal of the estate tax. Whenever I do, the mail pours in, pro and con.

People who write to comment on columns tend to have strong views or they wouldn't bother writing. But the feelings on tax matters are especially passionate.

Almost everyone talks about fairness. And in most cases, the writer's view of fairness conveniently serves the writer's own interests. The affluent who will pay estate tax think it's unfair to single them out. Lots of people of more modest means think it's perfectly right to tax only those who can afford to pay, just as ordinary income tax rates are higher for the rich.

How can so many people invoking fairness come up with such profoundly conflicting conclusions? Do we all use the word only to dress up our self-interest?

Lots of that goes on, of course. But when it comes to taxes, people who really do value fairness can, nonetheless, hold radically different views because the sense of fair play you learn as a child simply cannot be applied to taxation. A system that evolved through political horse trading doesn't have an underlying logic that is easily assessed with a gut-level sense of right and wrong.

Most day-to-day financial matters take place in a kind of Newtonian universe, following easy-to-understand principles such as the law of gravity. Go to a restaurant and you'll pay the price on the menu, whether you're rich or poor. Join a club and you'll pay the same dues as everyone else.

But the tax universe is like the bizarre realm of subatomic particles, where gravity doesn't apply, where ordinary logic seems to fail.

Suppose we set aside everything we know about taxes and imagine we're castaways setting up a little society from scratch, assigning community obligations such as keeping watch and digging a well. Using an ordinary sense of fairness, you could require everyone to chip in equally. If government is a service, everyone should pay the same amount, as in a restaurant.

Of course, as a practical matter, this would be impossible in 21st century America. To spread the extraordinary cost of government equally to each citizen would mean taxing millions of low-income people into destitution.

Why not, then, use the next best thing: a "fair" system in which everyone pays the same percentage of wealth in tax? It doesn't seem so terribly unfair to suggest that everyone pay estate or income tax of, say, 20 percent. The family making $50,000 would pay $10,000. The CEO making $1-million would pay $200,000. Those who benefit the most from being part of this society would pay the most.

The idea of charging everyone the same percentage is not that radical. Sales taxes work that way. So do Social Security taxes.

From time to time, people such as the flat-taxers suggest we do this with income tax, but the idea never really catches on. Too many constituencies worry they have too much to lose, and government can't do anything so sweeping, anyway.

Also, many people have come to view a progressive tax system as the only fair one. In our system, a wealthier taxpayer pays a higher percentage of his or her larger income. As a result, one taxpayer may pay twice as many dollars as another or 10 times as many, or 100 times as many.

That's fair, if you define fairness as charging more to those who can afford it. But not many would consider it fair to do that with any other kind of transaction. When it comes to taxes, we use unique standards of logic.

In the coming weeks, Washington will be full of debate over tax cuts, and we're sure to hear lots of talk about fairness. But let's be honest, for most of us the "fairest" system is one that sticks someone else with the bill.

_ Jeff Brown is a business columnist for the Philadelphia Inquirer.