Re-Imagining Tax Justice in a Globalized World

Abstract

In this paper I explain why designing a country’s tax policy with the elasticity of taxpayers’ choices of residency in mind, although a rational welfare-maximizing move by the state as a whole, and possibly even for its immobile as well as mobile constituents, is a policy that may not be justified under a liberal-egalitarian social contract.

I discuss two polar views of the social contract: one endorsing the state with the coercive power to promote the joint interests of its constituents. The other, views the coercive power of the state as a way to fulfil the collective will of its constituents as a society of equals in order to promote who they are as people. If states’ coercive power is based on equal respect and concern, a policy that undercuts such equality might not be justified. The state thus faces a dilemma: taking into account the increased electivity of taxation (by some) could undermine the normative foundations of the power of the state to tax. Ignoring such increased electivity, on the other hand, may limit the potential of some individuals and the state as a whole to flourish.

Keywords: International taxation, Resident mobility, Justice