Drawing the Boundaries of Tax Justice
McGill University - Faculty of Law
February 1, 2013
The story of our time may be the awakening of society to an epidemic of global tax dodging by the world’s elites. Citizens, watchdog groups, and even government officials are puzzled, frustrated, and sometimes outraged by the phenomenon, wondering where the nation-state lost its way in regulating its people and its resources, and why it is standing by, apparently helplessly, as its tax base erodes while austerity measures undermine the welfare state. This paper demonstrates that the sequence of tax base erosion-austerity-welfare state erosion is a story about a crisis of tax justice. It does so by revisiting how Canada's historic Royal Commission on Taxation, in its search for guiding principles for tax reform, turned to tax justice as the central component for any tax system. It shows why nations have consistently failed to meet these guiding principles, instead taxing the easy-to-tax more or less comprehensively, the hard-to-tax more or less randomly, and the impossible-to-tax not at all. It demonstrates that the result is that no state today imposes taxation justly: instead, taxation as exercised around the world today is overwhelmingly characterized by arbitrariness and injustice. The paper concludes that if governments cannot or will not pursue justice in taxation, they have at minimum a duty to explain to society why this goal is no longer worthy of pursuit.
Number of Pages in PDF File: 21
Keywords: taxation, tax policy, fairness, justice, sovereignty, institutions, governance, international tax, international law, territory, taxpayer, Carter Commission, welfare state, austerity, base erosion
JEL Classification: H11, H21, H87, F02, F50, F53, F59, Z13, E63, H2, K33, K34, N40, P45
Date posted: March 10, 2013