The Concept of Instrumentalism in Tax Law

Gepubliceerd in Coventry Law Journal (May 2013), 41-60

19 Pages Posted: 13 Mar 2016

See all articles by Henk Vording

Henk Vording

Leiden University - Leiden Law School

Date Written: May 1, 2013


Legal instrumentalism is a perspective on the role of law in society; it analyses legal rules as instruments to achieve social goals. Critics of legal instrumentalism would say: it tries to justify political interference with the social consensus expressed in traditional law. Applying the concept of instrumentalism on tax law, we need to distinguish between the “non-instrumental” purpose of raising revenue, and all other goals that can be pursued through tax policy. But “raising revenue” can be pursued by many means. The traditional tax doctrine, esp. as phrased by John Stuart Mill, has tried to limit the number of available options, first by stressing generality of taxes, subsequently by developing a norm for fair and neutral tax burden distribution.

This doctrine, and the notion of “instrumental use of tax law” based on it, has serious flaws. Two are well-known: abstract tax distribution norms like “ability-to-pay” do not translate easily into specific tax rules, and ignore the incidence of government expenditures (i.e., individuals’ net benefit from government). One additional problem is more subtle. Following Mill, we would be left with the question: how to distinguish between “fair distribution” tax rules that are supposedly non-instrumentalist, and all other tax rules with distributive goals and effects? Some proposed solutions are discussed and found to be unsatisfactory. We end up with a benchmark problem: we simply cannot define what a tax system not “affected” by instrumentalism looks like.

Keywords: tax doctrine, tax expenditures, instrumentalism in tax law

JEL Classification: H20, H24

Suggested Citation

Vording, Henk, The Concept of Instrumentalism in Tax Law (May 1, 2013). Gepubliceerd in Coventry Law Journal (May 2013), 41-60, Available at SSRN:

Henk Vording (Contact Author)

Leiden University - Leiden Law School ( email )

P.O. Box 9520
2300 RA Leiden, NL-2300RA

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