Proportionate Taxation as a Fair Division of the Social Surplus: The Strange Career of an Idea

Abstract

This article considers a surprising resilient argument, going back to Adam Smith, for the fairness of proportionate taxation: that proportionate taxation represents the fair way to divide the social surplus produced by cooperation among all of society's members. The article considers two contemporary variants on that argument, one by Richard Epstein in Takings and one by David Gauthier in Morals by Agreement. It concludes that the normative and empirical assumptions that underlie these, and all other, variants of the argument are so implausible as to suggest the argument cannot be taken seriously as a defense of proportionate taxation. The article concludes by considering other possible explanations for the enduring attraction of proportionate taxation for political philosophers, particularly those with libertarian and quasi-libertarian leanings.