From deontology to practical application: the vision of a good society and the tax system.

This article presents two arguments--one deontological and the other consequential--which, jointly and separately, aim to justify redistributive taxation and the resulting imposition of a greater tax burden on the wealthy. Both arguments are based on a community-oriented rather than an individual-centered view of society and are drawn from an analysis of the role that individual and collective rights and responsibilities ought to play in contemporary tax policy-making.

According to the deontological approach, the wealth belonging to the affluent is not merely the product of their efforts but also results from benefits conferred by social cooperation and good fortune. The article expands on this line of thinking by suggesting that the tax burden allocation is just if all members of society are guaranteed certain basics that ensure adequate living conditions and represent their fair share of the fruits of social cooperation. Since the pre-tax distribution of resources is so unequal, this approach to taxation is expected to result in some form of redistribution.

The second argument, based on consequential considerations, emphasizes the harmful economic, political, and social effects of concentrated wealth and income for modern democracy and promotes the use of the tax system to avoid these effects. This argument suggests that the wealthy, who hold the bulk of concentrated resources and, consequently, the actual means to contribute to redistribution, have a civic obligation to participate in the safeguard of society and fellow citizens by bearing a heavier tax burden than less affluent citizens. Additionally, the collective as a whole holds the right and bears the responsibility to require the implementation of redistributive measures in order to protect the workings and prosperity of the democratic society. The taxation of inter-generationally transmitted wealth is proposed as the proper target for redistribution.

I. INTRODUCTION: THE TAX SYSTEM AND NORMATIVE CLAIMS OF JUSTICE AND FAIRNESS

"The final choice of redistributional aims for a tax system involves basic value judgments about the nature of a good society ..." (1)

The tax system is one of the most important economic and political institutions in a democratic society. (2) It is expected to meet a number of economic goals, such as securing sufficient revenue for the government to operate and directing private economic activity. (3) In addition, there are more normative-ideological objectives the tax system is generally required to promote, including facilitation of efforts to unify the nation--especially by funding social programs--and fairness. (4) The promotion of fairness within the tax system is often regarded as a matter of high priority, overshadowing other considerations which arise in the contemplation of fiscal issues. As stated by Canada's Royal Commission on Taxation:

[T]he first and most essential purpose of taxation is to share the

burden of the state fairly among all individuals and families. Unless

the allocation of the burden is generally accepted as fair, the social

and political fabric of a country is weakened and can be destroyed ...

[F]airness in taxation must override all other objectives where there

is a conflict among objectives. (5)

This view closely mirrors a more general thesis about the role of justice in civil society, defended by John Rawls: "Justice is the first virtue of social institutions, as truth is of systems of thought. A theory however elegant and economical must be rejected or revised if it is untrue; likewise laws and institutions no matter how efficient and well-arranged must be reformed or abolished if they are unjust." (6)

What constitutes a "fair" or "just" system of taxation, however, is not immediately apparent. This article argues for the priority of wealth redistribution in the composition of a fair tax system. The arguments presented below are based on a community-oriented rather than an individual-centric view of society. In general, one can advance two chief reasons for justifying redistributive taxation and its implication, the imposition of a greater tax burden on the wealthy. The first argument, which is deontological and often cited in the literature on tax theory, holds that the wealth belonging to individuals is not merely the product of their own efforts but also results from benefits conferred through social cooperation and advantages gained by good fortune. In this view, the market allocation of goods and services does not properly reflect the role of social collaboration and should be corrected accordingly. This article pushes this argument further by suggesting that what ultimately matters in the reallocation of market goods and services is that all members of the social body are provided with certain basics that ensure adequate living conditions. A minimum standard of living in society will reflect each citizen's just claim for the fruits of social cooperation. This conclusion emerges from an analysis of the role that individual and collective rights ought to play in a modern democracy. Since the distribution of resources is so unequal in our times, (7) the funding of adequate living conditions for all is expected to result in some form of distribution of market output, from high to lower income individuals.

The second argument for redistributive taxation, based on consequential considerations, emphasizes the harmful effects concentrated wealth and income pose for modern democracy and promotes the use of the tax system to lessen these effects. According to the second argument, large concentrations of wealth and income in a few private hands undermine the proper functioning of modern democracy by denying equal opportunity to participate in the social, economic, and political realms of life; causing social and political unrest; impeding national economic growth; and degrading the relationship between individuals by generating classes of citizens. The consequential argument suggests that the wealthy, who hold the practical means to contribute to the decentralization of wealth and income, bear a civic obligation to participate in safeguarding the well-being of society and fellow citizens by bearing a heavier tax burden than less affluent citizens. Furthermore, society as a whole has a collective right and responsibility to require the wealthy to bear this increased burden. Unearned, particularly inter-generationally transmitted wealth can be especially harmful to modern democracy as it perpetuates and magnifies the harms caused by maldistributed wealth and income across generations. Therefore, this form of wealth becomes an appropriate target for redistribution.

The two arguments outlined in this article lead to the same general conclusion, which prescribes the redistribution of resources in modern democracy. However, neither argument can gain support nor the willingness of society to implement redistributive taxation unless there exists a social understanding of the value and nature of a (good) society and a commitment among citizens and governments to safeguard such a society. This article aims to contribute to modern tax theory by considering these somewhat neglected elements of normative discourse over the desirable nature of society. Part II of the article outlines the deontological argument for the imposition of a heavier tax burden on the wealthy with an extended discussion on human rights. Part III of the article discusses the tax theory implications of the deontological rationale. Part IV of the article details the consequential argument for the imposition of a greater tax burden on the rich and Part V explores related tax implications of the consequential and deontological arguments. This article does not address the justifications for using the tax system, rather than other means, for redistributional purposes nor does it analyze the more practical aspects of redistributive taxation such as deciding on an exact tax rate or rates. These issues are beyond the scope of this article and are therefore left for other inquiries. (8)

II. THE DEONTOLOGICAL APPROACH--RIGHTS AND RESPONSIBILITIES

Social-contract theorists from the seventeenth and eighteenth centuries have been fundamental to the shaping of the contemporary liberal-libertarian view of human nature and the state. (9) With this influence, human nature is generally conceptualized as highly individualistic and self-sufficient, suggesting that the government is constructed mainly to protect the freedom of citizens and yielding a distinct classification of human rights as limited in scope and negative in character. (10) This article calls for a different approach to human nature and society by placing more emphasis on social cohesion and shared responsibilities than on individualism. Such a view looks at society as composed of individuals who join together for an inclusive venture, which I will refer to here as "the joint venture" or "civil society." People participating in this venture are not only holders of rights but also bear corresponding civic responsibilities. As duty bearers, all individuals, and, consequently, society as a whole, are obligated to promote and protect the rights of others, especially of those most in need, and to cultivate the infrastructure required to facilitate human rights and obligations.

A. The Liberal-Libertarian Model of Human Rights