Equality, Liberty, and a Fair Income Tax

Abstract:     
This Article explores the principles of distributive justice which underlie the current American tax system. While a universal Justice may exist in theory, in reality 'Justice' is replaced by cultural bound 'justices,' particularistic and contextual, rooted in the societies which they shape and which, in turn, shape them. Similarly, there is no universal Truth in taxation. A tax is just or fair only for a particular society and only to the extent that it supports and furthers the normative goals of that society. As a consequence, this Article takes a particularistic approach to distributive justice and taxation. Part I of this Article summarizes various formal theories of justice and of income taxation. Part II explores the nature of the American perception of justice. First, it provides an overview of the two political concepts that have shaped our country: liberty and equality. It then summarizes the American tradition, which I have labeled 'moral economic individualism,' that articulates the meanings of liberty and equality that resonate most strongly within our national psyche. Part III surveys empirical evidence of American beliefs about distributive justice and taxation. The Article concludes that American beliefs in liberty and equality support a mildly progressive hybrid income-consumption tax, rather than a pure income tax or a flat-rate consumption tax. Such a tax acknowledges the pluralistic meanings of liberty and equality under the unifying umbrella of a fluid and flexible conception of a fair tax.

Number of Pages in PDF File: 55

Keywords: distributive justice, income tax, progressivity, tax rate, tax policy

Accepted Paper Series