Abstract
The task that we set ourselves at the outset of this research was to think tax law democratically. We said that to do this we need to revise the idea of taxation that we have in mind when we participate in discourses on tax law, the kinds of relationships that the approval and collection of taxes gives rise to, and the principles which articulate specific tax norms into a system. That is, we have to reconsider the conception, the structure and the general principles of taxation.
This must be done in such a way that the people taxes itself
Kant, The Metaphysics of Morals
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References
For a positive argument, see the judgment of the Spanish Constitutional Court STC 197/92: “The ultimate and autonomous foundation of tax norms, to be distinguished from the one proper of the principles referred in article 9 section 3 [of the Constitution] is the constitutional duty to share the financial burden derived from public expenditure according to economic ability to pay, as stated in article 31, section 1, of the Constitution”.
Cf. §9.
Cf. Rawls (1971, 106): “The ideal of fraternity is sometimes thought to involve ties of sentiment and feeling which it is unrealistic to expect between members of the wider society. And this is surely a further reason for its neglect in democratic theory. Many have felt that it has no proper place in political affairs. But if it is interpreted as incorporating the requirements of the difference principle, it is not an impracticable conception”. See also Koller (1992).
However, sometimes there are some marginal and quite hidden discriminations at work. See, for example, the judgment of the European Court of Justice in case C-175/88 Biehl v. Luxembourg, ECR I-1779. The case concerned the right to claim the restitution of the difference between the Income Tax due at the end of the year and the amounts withheld at source on account of such tax. Such right was exclusively granted to those resident in the Grand Duchy of Luxembourg for the whole fiscal year. To the extent that, as a matter of fact, it was foreigners who tended to be deprived of the right to restitution, the Court found that the provision discriminated against non-nationals.
Escribano (1988, 326–7).
Article 35, par. 1, second point of the Spanish Ley General Tributaria (the Spanish Tax Code) states that: “[All subject to taxation] are also obliged to provide all assessments and communications requested by the act of each tax”. Its second section further adds that “[Subjects to taxation] are obliged to keep and maintain books, registers and other accountability items as established; to facilitate inspections and verifications, and to make available to the Administration all the data, reports and certified documents related to the tax event” [“Estánigualmente obligados a llevar y conservar libros de contabilidad, registros y demás documentos que en cada caso se establezca; a facilitar la práctica de inspecciones y comprobaciones, y a proporcionar a la Administración los datos, informes, antecedentes y justificantes que tengan relación con el hecho imponible”]. Regarding withdrawal at source, an example in article 98, section 1 of the Spanish Income Tax Act establishes the obligation of legal persons and individuals who pay income subject to the tax to withhold at source the amounts determined by the act itself, and to report it and transfer the money to the Revenue authorities. Regarding the reporting of relevant data, notaries public and registrars are obliged by law to do so.
Rodríguez Bereijo (1976).
Cf. the criticism made by Berliri (1985, 155ff) to Giannini, whose legalistic turn was completed by means of putting the financial obligation at the core of tax law.
Ferreiro Lapatza (1989, 66), Palao Taboada (1988, 900)m Teieiro Ló , pez (1994 270)
There are some impressive figures. Slemrod and Bakija (1996, 129) indicate that the 1995 edition of the Federal Tax Code, published by the well-known West Publishing Company, covered 2540 pages, not to speak of the companion 8102 pages of the Federal Tax Regulations. Graetz (1997) is quite ironic about the tendency of tax consultants to disagree about the amount due by standard taxpayers. Slemrod and Sorum (1985) and Blumenthal and Slemrod (1992) calculated that most compliance costs were associated to record-keeping. Slemrod and Bakija (1996, 133) quantify compliance costs at 10% of the revenue produced by the Income Tax, but make it clear that small taxpayers spend very few time. In the UK, Sandford (1995) estimated costs at less than 5% of the revenue derived from the Income Tax.
Graetz (1997).
See the judgrnent of the Spanish Constitutional Court, STC 83/95, par. 2, 3, 4.
See §123ff.
Cf. chapter 1 section 2 subsection A
See, among others, Polanyi (1944), Polanyi (1977), Davies (1992) and Harris (1995).
On individual obligations, see Lombardi (1967), Carbone (1968), De Asis Roig (1991), Nabais (1998).
The reference to commutative justice makes it possible to include here the payment of fines or sanctions to the extent that they try to restore the state of affairs which existed before the commission of an illegal act.
De Viti de Marco (1928) or Berliri (1945).
The Portuguese Constitutional Court (judgment 640/95) remarked that a fee that clearly exceeds the benefit provided by the service or good is only nominally a fee. The Court made it clear that it will review the constitutionality of statutes enacting fees that operated as taxes
Raz (1986, 45): “Consider a tax law again. It not only imposes a duty, but also sets up (not necessarily in the same statute) the machinery for collecting and distributing the money. When the imagined objector said that there was no reason to pay the money now due as tax before the tax law was passed he was of course right. But this is because there was then no machinery for collecting and distributing the money or because there was no authority-imposed duty to pay for it”.
Habermas (1996a, 110): “Indeed, in complex societies, morality can become effective beyond the local level only by being translated into the legal code” and Habermas (1996a, 116). See Honoré (1992, 3,12). He claims that obligations which presuppose social co-operation for the achievement of a social action cannot be spelled out without having resort to law. Complex problems of co-ordination require the determination of conduct which cannot be operated without having resort to law. Koller (1992, 155), Honoré (1992), Habermas (1989b), Habermas (1996a). Cf. §9.
Alexy (1998), Alexy (1999).
See §§418–22 and 424–5.
Musgrave (1939).
Wicksell (1958), De Viti de Marco (1928).
Cf. Musgrave (1959, 6).
Probably the most famous was the one proposed by Henry George in the United States at the beginning of this century . Cf. George (1910).
Moschetti (1994, 248).
With regard to occasional visitors (like tourists), some countries proceed to charge an entry tax. It seems that such practice has been continued in some countries of an exceptional interest for resourcerich visitors, and that it constitutes a sizeable part of their revenue (it seems to be the case of Bhutan). However, as a general method it seems to run contrary to the principles of freedom of movement and to allocate an excessive burden on the shoulders of visitors. It might be seen as a peculiar variant of old tax exploitation.
Knight (1967, 152). Even if utilities cannot be measured and compared, and consequently cannot be composed, it seems clear that a given increment of monetary income is more important to a poor man than to a rich man; denying that is absurd, and goes against common sense.
I do not buy the communitarian argument. This does not mean that there are not good arguments for graduating the intensity of our duties, on the basis of the density of the web of things that relate us to different people, but that does not make the problem of taxation within the nation state and that of redistribution beyond the nation-state different problems. The reader might allow me not expand on this on the basis of my previous exclusion from the object of this essay of matters concerning the allocation of tax jurisdiction.
Habermas (1996a, 448).
This argument has been stressed by tax scholars who argue that the power to tax constitutes just an instance of the law-making competence of Parliaments.
Cf. §164.
See Casado Ollero (1981, 544).
Bengoetxea (1994), Aarnio (1997, 277ff).
See § 157.
See §157.
Van Caenegem (1995).
See §102.
See §400.
However, the following words are intuitive to some. See Scailteur (1961, 44): “Voler l’état, c’est voler aussi directement et d’une manière aussi condamnable que de prendre un portefeuille dans la poche de son voisin”, claimed a Belgian politician more than half a century ago”.
Cf. §9.
Cf. the IMF Manual on Governmental Financial Statistics: “compulsory, unrequited, non-returnable receipts for public purposes”. In the Encyclopédie ou dictionnaire raisonné des Sciences, des Arts et des métiers, vol. 8 (1765), tax is defined as “contribution que les particuliers sont censés payer a l’état pour la conservation de leurs vies et de leurs biens” And insists on the idea that taxes should be distributed according to what is determined or derives from distributive justice. This is a definition echoed in almost all textbooks. Cf. Bafile (1978, 23): “Il tributo e una prestazione imposta dallo Stato in forza del suo potere di supremazia”. See also Giannini (1956, 148–9).
The conception of law as command is also quite popular in the analysis of duties in general. Cf. Varela Díaz (1982). See also Nabais (1998).
The wider currency assigned to such theories in our field might be explained by the double opaqueness of the obligation in relation to the background duties it institutionalises, as we have seen in the preceding section, but it might also have been due to urgency of affirming its autonomy as an academic discipline, something that was historically associated with a claim to being positive represented by the conception of law as command, as seen in the first chapter.
This goes quite against the basic move of legal positivism in legal matters, namely to define taxes by reference to the sovereign power of the state and thus exclude altogether questions of justification. Cf. Rodríguez Bereijo (1976, 225).
See §§77–79.
Cf. Von Wright (1963, 124): “The superior strength of the commander over the commanded (...) is the factual basis on which the legal order of the state is founded”; Schmitt (1996, 26–7): “T]he ultimate foundation of the existence of law and of all legal values must be found in an act of will, in a decision that, in itself, creates the law and whose ‘legal force’ cannot be derived from the presumed innocence of the decision rules; that is so because the decision which does not follow a rule creates the law”. For a criticism, See La Torre (1998c, 10–18).
On the question of the ontology of law, see MacCormick and Weinberger (1986, 7ff)
I am paraphrasing here Raz (1975, 162).
Hart (1961, 89). See MacCormick (1981, 39ff) for further reflections which relate the point oi view where legal theorists need to stay (what he calls the hermeneutic point of view) with the need of postulating an internal point of view.
Weinberger in MacCormick and Weinberger (1986, 82)
Hart (1961, 80)
Hart (1961, 81).
For a criticism of the founding rule of coercion, see De Jasay (1998, chapter 1).
These are the kind of problems which plague non-institutionalised positive duties. Cf. Garzón Valdés (1986).
Raz (1986, 45). In Raz (1975, 157ff) the thought experiment is conducted in order to argue against prescriptivism as a general legal theory.
Cf. §102.
For a summary, see (Russo, 1994).
Rawls (1971, 267–8): “It follows that arranging for and financing public goods must be taken over by the state and some binding rule requiring payment must be enforced. Even if all citizens were willing to pay their share, they would presumably do so only when they are assured that others will pay theirs as well. Thus once citizens have agreed to act collectively and not as isolated individuals taking the actions of the others as given, there is still the task of tying down the agreement. The sense of justice leads us to promote just schemes and to do our share in them when we believe that others, or sufficiently many of them, will do theirs. But in normal circumstances a reasonable assurance in this regard can only be given if there is a binding rule effectively enforced. Assuming that the public good is to everyone’s advantage, and one that all would agree to arrange for, the use of coercion is perfectly rational from each man’s point of view. Many of the traditional activities of government, insofar as they can be justified, can be accounted for in this way. The need for the enforcement of rules by the state will still exist even when everyone is moved by the same sense of justice. The characteristic features of essential public goods necessitate collective agreements, and firm assurance must be given to all that they will be honoured”. Cf. also Lucas (1984, 165). Cf. Finnis (1980, 262): “And there is the need of giving the law-abiding the encouragement of knowing that they are not being abandoned to the mercies of criminals, that the lawless are not being left to the peaceful enjoyment of ill-gotten gains, and that to comply with the law is not to be a mere sucker: for without this support and assurance the indiispensable co-oneration of the law-abiding is not likely to be continued”.
Raz (1994, 328).
Cf. The judgment of the Spanish Constitutional Court, STC 76/90, paragraph 3: without a tax administration in charge of monitoring and controlling, and with the possibility of triggering sanctions, the tax system collapses or ends up exploiting those who voluntarily comply with their tax obligations.
Nagel (1987, 223): “We have to be impartial not just in the conferring of benefits, but in the imposition of burdens, the exercise of coercion to ensure compliance with a uniform set of requirements, and the demand for support of the institutions that impose those requirements and exercise that coercion (...) I suggest that this element of coercion imposes an especially stringent requirement of objectivity in justification”.
Mansbridge (1996).
Cover (1986, 1606).
Hale (1939, 563).
It is clear that magnifying the risks posed by law’s coercion on economic matters reduces the need of justification of the status quo.
Jarach (1943, 29): “In logical and structural terms, what constitutes the first and most relevant part of tax law is not the set formal norms regulating the procedure of determining the realisation of a tax event and the amount due or those others concerning spontaneous or coerced compliance with the ensuing obligation to pay an amount of money, but the set of norms which define the events which give rise to a tax obligation, those subject to it and the amount of the obligation, that is, the norms that constitute the material tax law” [“Lo que constituye lógica y estructuralmente la parte anterior y prevaleciente del derecho tributario no son las normas formales que establecen cómo se debe desarrollar la actividad con que se reconoce la existencia del hecho imponible y se determina cuál es el tributo que corresponde y se cumplen los actos necesarios para ingresar el pago o para ejecutar coactivamente la obligación tributaria, sino las normas en que se prevén los hechos que dan lugar al nacimiento de la relación jurídica principal, los sujetos obligados y el monto de la obligación tributaria, es decir, las normas que constituyen el derecho tributario material”].
See §432.
Raz (1994, 333). The reader should take into account that the need of generality and easy understanding also limits the authority of the law in such cases: “Alternatively, [the subject of the law] may find out that he has no reason to follow certain aspects of the law. They may be the inevitable simplifications the law has to embrace to be reasonably understood and efficiently enforced. There is no reason for an individual not faced with the same considerations to conform to the law on such occasions”.
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Menéndez, A.J. (2001). Justifying the General Obligation to Pay Taxes (1). In: Justifying Taxes. Law and Philosophy Library, vol 51. Springer, Dordrecht. https://doi.org/10.1007/978-94-015-9825-5_4
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