The Justice of the Tax Base and the Case for Income Tax

Patrick Emerton and Kathryn James, 'The Justice of the Tax Base and the Case for Income Tax' in Bhandari, Monica (ed) The Philosophical Foundations of Tax Law (Oxford University Press, 2017)

42 Pages Posted: 23 May 2018

See all articles by Patrick Emerton

Patrick Emerton

Monash University - Faculty of Law

Kathryn James

Monash University - Faculty of Law

Date Written: May 10, 2018

Abstract

This chapter contests the claim made by Murphy and Nagel that the choice of tax base is of only instrumental significance to economic justice (The Myth of Ownership (OUP, 2002, 8. 98)). We agree with Murphy and Nagel that what ultimately justifies taxation is its contribution to just outcomes, both redistributively and more broadly. However, we argue that the likely presence in a just constitution of a principle of political equality and/or fair equality of opportunity, in conjunction with the need to maintain the constitution as just, means the choice of tax base is not purely instrumental and indeed supports arguments in favour of wealth as an object of taxation. The use of mass-revenue raising taxation to provide social services is a further important mechanism for dealing with the threat that inequality poses to justice. There are, therefore, reasons of principle for favouring a mass-revenue raising tax that also taxes wealth. As a practical matter this means taxing income, despite the increasing threats to that base at a theoretical and practical level.

Keywords: Taxation, distributive justice, Rawls, income tax, wealth tax, value added tax

JEL Classification: K00, K10, K19, K30, K34, K39

Suggested Citation

Emerton, Patrick and James, Kathryn, The Justice of the Tax Base and the Case for Income Tax (May 10, 2018). Patrick Emerton and Kathryn James, 'The Justice of the Tax Base and the Case for Income Tax' in Bhandari, Monica (ed) The Philosophical Foundations of Tax Law (Oxford University Press, 2017). Available at SSRN: https://ssrn.com/abstract=3176368

Patrick Emerton

Monash University - Faculty of Law ( email )

Wellington Road
Clayton, Victoria 3800
Australia

Kathryn James (Contact Author)

Monash University - Faculty of Law ( email )

Wellington Road
Clayton, Victoria 3800
Australia

HOME PAGE: http://www.law.monash.edu.au/staff/kjames.html

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