Abstract
The previous chapter consisted in a reconstruction of the structure of the obligation to pay taxes in Western tax systems. It was intended as a piece of interpretive theory, “which begins with our actual practices and tries to read these in their best light”1.
“Suppose that, lined up on the docks of Plymouth, there are a number of ships about to sail for various communities in which varying degrees of redistributive taxation are to be employed, but which are in other aspects similar. Given at least some uncertainty concerning how productively your own particular talents will fare in the new environment, so that a corresponding uncertainty exists as to what place you will eventually occupy on the prospective income distribution, what type of redistribution would you tend to prefer in making your choice among the various colonies? How would this preference be altered by taking into consideration the types of individuals that the various plans would attract? How would the decision be made where there is no advance information at all as to which particular individuals are more or less likely to succeed in the new environment? While many of those who have some degree of confidence in their superior capabilities, even as against a group of selected in terms of being attracted to such a venture, may find it difficult to give full weight in any such evaluation to the possibility of their eventually filling a menial role, even hypothetically, in such a situation, the concept may be an aid in developing some degree of objectivity in the appraisal of income distribution”
William Vickrey, The Problem of Progression
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References
Interpretive theory is closely related to Rawls’ move in Political Liberalism. See (Rawls, 1993, 8): “We collect such settled convictions as the belief in religious toleration and the rejection of slavery and try to organise the basic ideas and principles implicit in these conceptions into a coherent political conception of justice. These convictions are provisional fixed points that it seems any reasonable conception must account for. We start, then, by looking to the public culture itself as the shared fund of implicitly recognised basic ideas and principles”.
As it was indicated in chapter 1, section 2, this research does not tackle questions concerning the distribution of the power to tax among different political communities.
It was already pointed in the previous section that the duty to share the burden derived from the existence of the political community is mainly but not exclusively discharged through the general obligation to pay taxes. On the specific question of other means of implementing the principles of distributive justice, see Gelihorn (1935), Kronman (1976), Gerstenberg (1998). The latter is developing a project that analyses private law regulation as the channelling of market transactions according to independent, i.e. publicly, justifiable principles of social justice”.
See §§ 25–31.
See Blum and Kalven (1952). They review nine different arguments in favour of progressive taxation: (1) The macroeconomic argument that progressive income taxes contribute to maintaining a high and stable level of economic activity; (2) The benefit argument that benefits derived from taxation increase more rapidly as the income increases (3) The sacrifice theory which claims that we should look at the sacrifice in which each taxpayer goes through in order to pay her tax bill; (4) The ability to pay argument, be it interpreted as it may, points to the decreasing marginal utility of surplus income (that is, income exceeding the basics of life); (5) Social and moral ideas regarding the moral scheme of consumption (which considers that there is a different moral value in different kinds of expenditure); (6) The mitigation of economic inequality; (7) The fostering of equality of opportunity; (8) The need for a subsistence income; (9) The need for welfare payments. Most of these rationales are normative ones. However, the authors add that the most weighty and relevant ones have been those of a prudential kind. Cf. Blum and Kalven (1952, 444).
See§ 21.
Leoni (1991, 168): Taxation can never be completely identifiable with the payment of a price under the market system, but it may be considered as in this case [people willing to pay for a price] as a good approximation to the payment of a price under that system. See also Marlow and Orzechowsky (1997, 161): “The private market analogy remains an appropriate framework for redesigning the fiscal constitution, and for those interested in changing the status quo, since it provides a framework for providing how various changes that bring payment and use closer together may influence our future public choices”.
See chapter 2, section II.
See, for example, Persten and Tabellini (1994). In a paradoxical way, they argue that inequality is harmful for growth because it leads to policies that do not protect property rights and do not allow full private appropriation of returns from investment.
MacCormick (1989).
Nozick (1974, 11–2).
Nozick (1974, 12–5).
Nozick (1974, 54–6).
Nozick (1974, 78–84).
Nozick (1974, 82–3).
Nozick (1974, 169).
Nozick (1974, 84–7).
Nozick (1974, 149 and 163): “Any more extensive state violates people’s rights (…) No-end-state principle or distributional patterned principle of justice can be continuously realised without continuous interference with people’s lives”.
Nozick (1974, 150): “[T]his includes the issue of how unheld things may come to be held, the process, or processes, by which unheld things may come to be held, the things that may come to be held by these processes, the extent of what comes to be held by a particular process, and so on ”.
Nozick (1974, 152).
Nozick (1974, 151): “The complete principle of distributive justice would say simply that a distribution is just if everyone is entitled to the holdings they possess under the distribution. A distribution is just if it arises from another just distribution by legitimate means. Whatever arises from a just situation by just steps is itself just. The means of change specified by the principle of justice in transfer preserve iustice”
Nozick (1974, 230–1): “If the set of holdings is properly generated, there is no argument for a more extensive state based upon distributive justice (…) If, however, these principles are violated, the principle of rectification comes into play. Perhaps it is best to view some patterned principles of distributive justice as rough rules of thumb meant to approximate the general results of applying the principle of rectification. For example, lacking much historical information, and assuming (1) that victims of injustice generally do worse than they otherwise would and (2) that those from the least well-off group in the society have the highest probabilities of being the (descendants of) victims of the most serious injustice who are owed compensation by those who benefited from the injustices (assumed to be those better off, though sometimes the perpetrators will be others in the worst-off group), then a rough rule of thumb for rectifying injustices might seem to be the following: organise society so as to maximise the position of whatever group ends up least well-off in society. This particular example may well be implausible, but an important question for each society will be the following: given its particular history, what operable rule of thumb best approximates the results of a detailed application in that society of the principle of rectification? These issues are very complex and are best left to a full treatment of the principle of rectification. In the absence of such a treatment to a particular society, one cannot use the analysis and theory presented here to condemn any particular scheme of transfer payments, unless it is clear that no considerations of rectification of injustice could apply to justify it. Although to introduce socialism as the punishment for our sins would be to go too far, past injustices might be so great as to make necessary in the short run a more extensive state in order to rectify them” [my italics, except for italicised single words].
Nozick (1974, 169). He is just reiterating a rhetorical claim made by Spencer (1994, 96–7): “That which fundamentally distinguishes the slave is that he labours under coercion to satisfy another’s desires (…)Take now a further step. Suppose an owner dies, and his estate with its slaves comes into the hands of the trustees; or suppose the estate and everything on it to be bought by a company; is the condition of the slave any the better if the amount of his compulsory labour remains the same? Suppose that for a company we substitute the community; does it make any difference to the slave if the time he has to work for others is as great, and the time left for himself is as small, as before? The essential question is- How much is he compelled to labour for other benefit than his own, and how much can he labour for his own benefit? The degree of his slavery varies according to the ratio between that which he is forced to yield up and that which he is allowed to retain; and it matters not whether his master is a single person or a society. If, without option, he has to labour for the society, and receives from the general stock upon such portion as the society awards him, he becomes a slave to the society. Socialistic arrangements necessitate an enslavement [97] of this kind; and towards such an enslavement many recent measures, and still more the measures advocated, are carrying us”. Cf. §117 for the reasons behind the Greek equation of paying taxes with slavery and § 235 for a more adequate reinterpretation.
See, among others, Philips (1979), Lund (1996), Michael (1997) and Rivera López (1998).
Rivera López (1998. 65ff).
Nozick (1974, 74).
Nozick (1974, 153): “The general outlines of the theory of justice in holdings are that the holdings of a person are just if he is entitled to them by the principles of justice in acquisition and transfer, or by the principle of rectification of injustice (…) If each person’s holdings are just, then the total set (distribution) is just”.
Cf. Ackerman (1989, 11–2): “Robert Nozick (…) does not deny that a satisfactory defence of market relations requires a theory of justice which defines the conditions under which one person might rightfully appropriate something his competitors also desire. Remarkably enough, he does not even try to come up with such a theory in his well-known Anarchy, State and Utopia, charmingly suggesting that it would be a mistake to hold off publication until perfection were reached (…) Perhaps this was good enough for a young man writing in the early 1970s; fifteen years later, I begin to grow suspicious about this continuing silence: Does Nozick simply suppose the question of distributive justice will go away because he refuses to answer it? Why should others take his defence of markets seriously when he does not even try to answer the most obvious questions about them?”
Nozick (1974, 149): “There is no central distribution, no person or group entitled to control all resources, jointly deciding how they are to be doted out. What each person gets, he gets from others who give to him in exchange for something, or as a gift (…) There is no more a distributing or distribution of shares than there is a distributing of mates in a society in which persons decide who they should marry”. This is considered as an argument in favour of the “historical” and not “patterned” character of justice in holdings.
Nozick (1974, 160).
Haworth (1994, 12).
Cf. Buchanan (1971, 5): “The pure-market economy as such has little to do, at least directly, with the distribution of economic power. This is determined, ultimately, by the natural distribution of talents along with the legal definition of rights, and good dose of luck as well, in an uncertain world” and Buchanan (1975, 58): “In any state of nature context, an equilibrium will be find at which individuals will not have an incentive in order to engage into conflict and predatory activity, an equilibrium point at which neither person has an incentive to modify his behaviour privately or independently”. See also Epstein (1995. 62).
Gerstenberg (1998, 211).
Kant (1996, 415–6).
A thorough analysis of the concepts of freedom and coercion in liberist writers can be found in Haworth (1994, 41ff).
Nino (1989a, 327).
Nino (1991a, 209): “The idea would be that a judgment which ascribes a causal effect to an omission (and probably to conduct in general) is not a purely factual one, but includes a normative content which should be justified”.
Nino (1989a, 339).
Nino (1991a, 214): “The autonomy which each individual enjoys for choosing and realising plans of life is not an attribute (like intelligence) independent of the degree to which it is enjoyed by others. On the contrary, the autonomy of each depends, at least in part, of that of others, and it is something that each one owes partially to others, in the sense that, given the scarcity of resources, he enjoys it thanks to the limitation of autonomy of others (…) Autonomy does not come naturally parcelled; the illusion to the contrary derives from the ‘naturalisation’ of law (This is one of the implicit functions of natural-law theory, reflected in some sophisticated distinctions such as that of Hayek’s between nomos and taxis)”.
Nino (1993a, 296).
See § 100.
Sen (1993, 256).
Nagel (1991, 120).
It cannot be denied that people such as Buchanan or Nozick have not only a talent as political philosophers, but also as manufacturers of eye-catching formulas, like Personal progressive taxation amounts to slavery.
This is related to the set of principles characteristic of the formal paradigm of tax law. §§137ff.
Buchanan and Congleton (1998, 56).
Buchanan and Tullock (1962), Buchanan (1975), Buchanan and Congleton (1998).
Buchanan and Congleton (1998, 44): “A collectively financed and/or supplied good or service, or bundle, must be generally available to all members of the political unit, whether the non-excludability feature is inherent in the technology of delivery itself or it is explicitly constructed (…) A generally available good or service may be valued differentially by separate persons and for either or both of these reasons. Generality is violated, however, when, as, and if access to the good or service is denied, thereby forestalling any possible evaluation”
Though some liberists such as Hayek or Von Mises were more happy with indirect taxation both on the basis of normative and prudential reasons, Italian liberists (since the days of De Viti de Marco) have argued that income is the best proxy of willingness to fund public goods and they have made their case for a proportional income tax consequently. This influence can be seen still today in the writings of people like Antonio Martino. We can explain Buchanan’s endorsement of this argument on the basis of his wide knowledge of Italian authors on Public Finance.
See Hall and Rabushka (1995).
See Epstein (1995) and Ladeur (1999).
Günther (1995) for a sophisticated argument in this sense.
Leoni (1991) is paradigmatic. But see also Hayek (1976) and Posner (1972)
See§ 12.
Westen (1982, 542, 550): “Equality [as an explanatory norm] is an idea that should be banished from legal and moral discourse (…) there is no substantial additional element which we can derive from equality; that is, to say that a rule should be applied equally means just to say that a rule should be applied to the cases to which it applies”. Similarly, Weinberger, in MacCormick and Weinberger (1986, 149): “The principle of formal equality, for all its importance, is only an instrument for securing the ‘transparent’ quality of substantive criteria of justice. The principle of universalisability is related to the principle of formal justice (…) Requiring universalisability of moral or legal decisions means nothing other than positing structural conditions for evaluative decisions which one can satisfy by seeking out distinguishing circumstantial features of cases, and these are always available”.
Peters (1997, 1223).
Buchanan and Congleton (1998, 45).
Buchanan and Congleton (1998, 46).
Buchanan and Congleton (1998, 93): “Politicisation of the supply of a good or service breaks the quantity adjustment process that is offered by the market”.
Buchanan and Congleton (1998, 93).
See §§ 78–9.
Musgrave (1997, 158).
Although they are not necessarily so; not only have certain proposals been made in which the concept of income of the income tax is not based on accretion of the income but on consumption, which could be taxed according to a progressive rate structure. Moreover, we have also to take into account that traditional luxury taxes could be seen as indirectly aiming at some progressiveness in the distribution of the burden (though, of course, other goals could be conflated on them, like the protection of certain trades and industries). This was already the argument made by Bodin. See Bastable (1927, 19–20) and on Adam Smith, Groves (1974, 24). See also Winch (1996). A contemporary advocate of progressive indirect taxes is Edward McCaffery, who was tax advisor to presidential candidate Bill Bradley (democrat). See McCaffery (1994b), McCaffery (1994c) and McCaffery (1999).
See Stranahan and Borg (1998).
Albi (2000, 192–3) offers a good analysis of the combined effects of income and consumntion taxes
Seligman himself was concerned with the insufficient administrative structures to support it and of the insufficient evidence on the shifting of the tax burden, something that might sterilise any progressive or redistributive tax system.
Seligman (1909, 300): “[T]he tax reformers have quite enough to occupy their attention in the endeavour to make the rate really proportional, before bothering themselves with the more ideal stage of progression”.
Ackerman and Alstott (1999, 143) challenge the conceptualisation of taxes as insurance premiums. However, it seems to me that they dislike such association because for them insurance premiums are necessarily calculated according to principles of commutative justice. My claim is that insurance can be defined in more general terms, and that private insurance is a concept parasitic on such more general understanding.
Ackerman (1980, 251): “Unless the Budget is of a certain overall size, there will be no way of transforming all these forms of exploitation into any structure of even contestable equivalence”
Dworkin (1981).
Dworkin (1981, 339ff).
Dworkin (1981, 291).
Dworkin (1981, 297).
Dworkin (1981, 299).
Dworkin (1981, 312).
Van Parijs (1995).
A very similar kind of discussion underlies the question whether to monopolise the distribution of certain goods through public enterprises or through the introduction of regulated competition (that is the case of public utilities). The question is not only technological, but also normative, as the development of new technologies which break up natural monopolies in sectors like electricity or water supply prove.
Cf. Musgrave (1959, 13): “Such wants are met by services subject to the exclusion principle and are satisfied by the market within the limits of effective demand. They become public wants if considered so meritorious that their satisfaction is provided through the public budget, over and above what is provided for by private buyers”.
Cf. Tobin (1970).
Bohman (1997, 325).
Cohen1989, 33 : It is necessary that the “Distribution of powers and resources does not shape their chances to contribute at any stage of the deliberative process” and precludes that “distribution plays an authoritative role (…) in deliberation”. Knight and Johnson (1996, 309) add that “political equality entails a guarantee of effective participation and thus a concern with the capacity of individual participants to engage in the process of mutual persuasion”
Rawls (1993, 183).
See §302–8.
Rawls (1993, 7): “[T]he first principle covering the equal basic rights and liberties may easily be preceded by a lexically prior principle requiring that citizens basic needs are met”. The principle can be traced back to Rawls (1971, 275) where, dealing with the basic institutions of distributive justice, Rawls says that presuppose that “government guarantees a social minimum either by family allowances and special payments for sickness and unemployment, or more systematically, by such devices as a graded income supplement (a so-called negative income tax).
Friedman (1962, 191): “I see no way of deciding ‘how much’ except in terms of the amount of taxes we (…) are willing to impose on ourselves for the purpose. The question ‘how’ affords more room for speculation” (at the end he endorses some version of a negative income tax).
See §117 for the Greek equation of taxation with slavery. See §209 for Nozick’s argument.
Of course, it is clear that such option is related to the absence of any form of citizenship income, which exists in most EU states.
Nagel (1993, 58).
Rawis (1971, 72).
Gutmann and Thompson (1996, 274).
Nagel (1993, 59).
Nozick (1974, 161–3).
Rawls (1971, 60): “[S]ocial and economic inequalities are to be arranged so that they are both (a) reasonably expected to be to everyone’s advantage and (b) attached to positions and offices open to all”.
As a matter of fact, he has been criticised on such account by Amartya Sen. Cf. Sen (1992, 65): “In modern society, given the complex nature of social organisation, it is often very hard, if not impossible, to have a system that gives each person all the levers of control over her own life. But the fact that others might exercise control does not imply that there is no further issue regarding the freedom of the person (…) It does make a difference how the controls are, in fact, exercised”. See also Kymlicka (1990, 72) and Gargarella (1999, 76–9).
Dworkin (1981, 314): “Unfair differences are traceable to genetic luck, to talents that make some people prosperous but are denied to others who would exploit them to the full if they had them. But if this is right, then the problem of differential talents is in certain ways like the problem of handicaps we have already considered”.
Dworkin (1981, 316).
Nagel (1997b, 311).
Nagel (1997b, 313): “[S]ociety has [not] the same kind of responsibility, under justice, with respect to those inequalities that it has with respects to others that are socially caused”. At p. 315 he adds that this does not mean that “those whose talents have higher market value deserve a higher reward for their efforts, so that it would be wrong to try to implement the difference principle. To come as close as possible to an equal society would be a pro tanto good thing. My doubts have to do with whether this goal should have the kind of moral priority associated with justice”.
Ackerman (1980, especially at 180–1).
Dworkin (1981, 315ff).
Dworkin (1981, 324).
Rawls (1971).
Simons (1938).
See also Simons (1946), Simons (1948).
Simons (1938, 2, fn1).
Simons (1938, 19).
Simons (1938, 219).
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Menéndez, A.J. (2001). Justifying the General Obligation to Pay Taxes (2). In: Justifying Taxes. Law and Philosophy Library, vol 51. Springer, Dordrecht. https://doi.org/10.1007/978-94-015-9825-5_5
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