On the Meaning of 'Tax'

19 Pages Posted: 1 Oct 2018

Date Written: June 1, 2018


Common-law jurisprudence characterises a tax as a compulsory payment imposed by a public body for a public purpose under the authority of the legislature. While useful in many situations — and despite judicial statements that a tax is not a penalty, fine or user charge — this understanding of a tax fails to make clear how some other transactions should be classified. This is arguably because certain elements of the common-law characterisation are lexically inappropriate, logically redundant and inconsistent with extant decisions. This article proposes an alternative. It argues that a tax is a compulsory transfer of value imposed primarily for a redistributive purpose. This definition is purposive (it lends insight into the appropriate aims of taxation), universal (the focus on redistribution distinguishes taxes from other payments to government) and practicable (it promotes fiscal transparency and clarifies the actual financial contribution each and every natural and legal person makes to the public finances).

Suggested Citation

Bowler-Smith, Mark and Ostik, Huigenia, On the Meaning of 'Tax' (June 1, 2018). Australian Tax Forum, Vol. 33(3), 2018, Available at SSRN: https://ssrn.com/abstract=3254068

Huigenia Ostik

University of Cambridge ( email )

Trinity Ln
Cambridge, CB2 1TN
United Kingdom

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