Should We Tax the 'Clintons' and Other Former Senior Civil Servants More? Yes, We Should

18 UC Davis Business Law Journal (2018)

19 Pages Posted: 30 Jan 2018

See all articles by Limor Riza

Limor Riza

Ono Academic College - Faculty of Law

Date Written: January 23, 2018


This paper debates whether former civil servants should be taxed differentially. It argues that whenever public officials’ post-retirement income in the private sector is derived from their previous office, an additional tax should be levied on them, since in such situations the ability-to-pay principle is an insufficient horizontal equity criterion. This idea is grounded in equity propositions and may be justified by various liberal theories of equal opportunities and utilitarianism.

As a rule, the paper supports the ability-to-pay principle given the common shortcomings underlining the benefit principle. Nevertheless, this principle is not entirely divorced from the benefit rule, since one's ability is dependent upon the resources and benefits granted by the state.

Thus, part of the ability to pay doctrine is based on the benefit rationale. In some instances, where access to public resources is not open to all individuals, the ability to pay principle cannot be an exhaustive measure promoting horizontal equity. In order to elaborate this preposition, the paper focuses on the taxation of senior civil servants.

Part of the former public servant’s ability to earn is based on the benefit he obtained from using public resources inaccessible to other individuals. Thus, there is a direct link between those individuals' ability and benefit and it is more equitable to tax them accordingly. By linking the ability to pay and benefit principles, we can justify a higher taxation on former senior civil servants, primarily to achieve horizontal equity. Since those individuals with higher ability to pay benefit more from the state's resources, a proper tax system should tax them more for utilizing these benefits.

Keywords: Taxation, Equity Principle, Ability-to-Pay Principle, Benefit Principle, Horizontal Equity, Vertical Equity, International Tax Principles, Liberal Egalitarianism, Welfarism, Rawls, Dworkin, Musgrave, Public Resources, Civil Servants, Politicians

JEL Classification: B12, D63, H2, H4, K34

Suggested Citation

Riza, Limor, Should We Tax the 'Clintons' and Other Former Senior Civil Servants More? Yes, We Should (January 23, 2018). 18 UC Davis Business Law Journal (2018). Available at SSRN:

Limor Riza (Contact Author)

Ono Academic College - Faculty of Law ( email )

104 Zahal St.
Kiryat Ono, 55000

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