Is Everybody Obliged to Pay Taxes Somewhere?

30 Pages Posted: 26 Jul 2023

See all articles by Wolfgang Schoen

Wolfgang Schoen

Max Planck Institute for Tax Law and Public Finance, Department of Business and Tax Law

Date Written: July 26, 2023

Abstract

More and more countries offer tax benefits to attract wealthy individuals and sought-after experts.
Under these regimes, mobile individuals are not subject to worldwide taxation on income and wealth any more. As many source countries waive their territorial taxing rights in order to attract investment and economic activities, the ensuing interaction between home countries (not willing to apply worldwide taxation) and source countries (not willing to apply territorial taxation) can result in double nontaxation.
Against this background, this article asks whether “everybody is obliged to pay taxes somewhere”.
This issue is examined under three different perspectives:
- the “legal” perspective which shows how tax competition is undermining “full taxation” of
individuals;
- the “factual” perspective which clarifies to what extent the passing-on of indirect taxes and
the phenomenon of “tax incidence” provide for a factual tax burden on those individuals
which are formally tax exempt.
- The “moral” perspective which looks to states and individuals as moral agents. This part tries
to disentangle the moral responsibilities of states and individuals when it comes to paying
the “fair share”. It is found that - as long as there is no global tax organisation providing
global public goods or global redistribution and as long as no state (neither the state of origin
nor the state of destination) have a clear prerogative and obligation to tax those individuals –
individuals are not morally obliged to submit to meaningful taxation in “some” state.

Suggested Citation

Schön, Wolfgang, Is Everybody Obliged to Pay Taxes Somewhere? (July 26, 2023). Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2023 - 09, Available at SSRN: https://ssrn.com/abstract=4521472 or http://dx.doi.org/10.2139/ssrn.4521472

Wolfgang Schön (Contact Author)

Max Planck Institute for Tax Law and Public Finance, Department of Business and Tax Law ( email )

Marstallplatz 1
Munich, 80539
Germany

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