Tax justice debates are often framed in binary opposition between those who support lower taxes, a smaller state and greater self-sufficiency and those who support higher taxes and higher social spending. Whilst there is an element of truth to this caricature, the present volume reveals a much more complex patchwork of opinion in which it is possible to agree on some aspects of tax justice and disagree on others. This chapter presents an indicative map of these overlapping ideas whilst acknowledging that this is itself a contestable exercise in interpretation.
I.Introduction
What is tax justice? We can be sure that it is not the exclusive concern of academic theorists. It is something upon which almost everyone has a view, however inchoate. The wide currency of tax justice is useful to tax specialists as an entry point in discussing our work with others, but it is not an unmixed blessing. Tax justice can provoke strong emotions, yet it often seems that participants in âdebatesâ about it are in fact talking about very different things. This can lead to some quite confusing and superficial arguments, for instance between those who assert that âcorporations should pay their fair shareâ and those who assert that âcorporations already pay what the law requiresâ. These views themselves are of course far from superficial, but the assumptions underlying them need to be unpacked before there is the slightest chance of comparing like with like.
An obvious response to the indeterminacy of the term âtax justiceâ is to devise and defend a definition and to use this as a starting point from which to interpret tax justice debates. This is a worthwhile endeavour and is carried out to varying degrees by all of the contributions to this volume. My colleagues explain themselves more fully than is possible in the limited space of this chapter, and accordingly it is not my aim here to summarise their arguments or indeed to defend my own conception of tax justice. The task of this chapter is the more limited one of sketching a map of the various approaches to tax justice that can be found in this volume.
This mapping task may at first sight appear to be value neutral, in the sense that it is irrelevant whether or not I agree with a particular view. My aim is to document the ways in which the contributors differ in their approach to tax justice, not to evaluate the decisions that they have made. All the same, even mapping the intellectual landscape involves some controversial decisions about which features of the debates to emphasise and which to downplay, or to be more specific, which difference of opinion to highlight as being particularly significant. My choices of issues to highlight are hardly hidden, forming as they do the subheadings of this chapter, yet they are inherently contestable. Indeed, they have already been contested by means of detailed and very helpful feedback on this chapter from many of the other contributors.
One point that is clear is that the common tendency to pigeonhole tax justice arguments into âpro-taxâ and âanti-taxâ camps has very little explanatory power in navigating the chapters of this volume. One of our contributors said in correspondence with me that âthe dichotomy of pro-tax and anti-tax is not so helpful, and I always think that it is biasedâ. For instance, one could in principle support higher taxes and more generous public expenditure yet oppose tax rules that failed to reflect a fair distribution of fiscal burdens, or which encouraged procedural unfairness. This highlights a critical point, which is that the contributions to this volume are best seen not as contributions to a binary argument, let alone expressions of a pre-existing agreement between authors. On the contrary, they showcase the sheer variety of overlapping opinions and emphases that are capable of being held on the topic of tax justice, with points of consensus complementing all of the disagreements. The strength of this volume, then, is its sheer diversity.
II.The Focus of Tax Justice Arguments
A.States and Taxpayers
A good starting point in navigating this diversity is in the distinction, suggested in conversation by Christiana HJI Panayi, between three different areas of focus. We might be concerned, first, with the relationship between one state and other states. An example of this is the discussion of the allocation of taxing powers and revenues between states that is often described as âinter-nation equityâ. Second, we might concentrate on the distribution of fiscal burdens between taxpayers. This might be extended to take into account cognate matters such as fiscal transfers and the distributional consequences of public expenditure. Third, our primary interest may be in the relationship between states and taxpayers, as may be seen in the debates concerning the rule of law, the protection of taxpayer rights and participatory democracy.
These areas of emphasis are helpful in highlighting the sheer range of topics that can be contemplated within the general description of âtax justiceâ but are not equally easy to apply to the chapters of this volume. The state-taxpayer relationship is at the forefront of Richard Thomasâs review of the treatment of litigants in person by the Tax Chamber of the First-tier Tribunal in the UK. The same might be said of Christiana HJI Panayi and Katerina Perrouâs review of the protection of taxpayer rights within the EU, and of Tsilly Daganâs exploration of the tensions between revenue maximisation and the maintenance of a society of equals. Ivan Ozai focusses on state-state relations but argues powerfully that the achievement of fair distributive outcomes between states is a different question from the procedural representation of developing countries within organisations such as the OECD and that the two ought not to be conflated.
More difficult to categorise is Ă
sa Gunnarssonâs argument in favour of a wider recognition of the role of tax in supporting social welfare goals. On the one hand, this raises obvious questions about the distribution of resources between taxpayers and between taxpayers and the beneficiaries of public expenditure. On the other hand, these matters are inextricable from Gunnarssonâs explanation of social contract theory and more generally her understanding of state-taxpayer and state-welfare relationships. Similarly, the chapters of Henry Ordower and Yvette Lind show that questions of distributive justice quickly raise the further question âdistribution between whomâ. This is brought into particularly sharp relief by the tax treatment of immigrants and expatriates, the extent to which tax treatments depend on citizenship and indeed what degrees of citizenship are relevant to tax law. A very different perspective on the same issues is offered by Matthew Ward, who looks at the role of taxation in constituting state-subject relations in respect of newly confiscated Catholic land in seventeenth-century Ireland and uses this history to contextualise the political theory of the time.
Even at this early stage, we have travelled a long distance from the simple binary notion of a debate between high-tax and low-tax commentators, or between large-state and small-state perspectives. Our authors have reached different decisions on what is important but in a way that suggests more a patchwork of opinion rather than a set-piece opposition between two monolithic approaches to justice. This sense of complexity and depth only increases as our journey approaches the next fork in the road.
B.National and Cosmopolitan
When thinking about tax justice, we might be most concerned with what happens within the borders of a given state. Alternatively, we might consider whether processes and outcomes are just, regardless of state boundaries. This has obvious relevance to distributive questions such as whether the justice of the tax/benefits position of a UK person ought to be compared only to other UK persons or to taxpayers and benefits recipients worldwide. It may also bear on the connected question of whether we view tax justice primarily as the responsibility of states or as an area of policy where close international coordination is indispensable. As with many of the spectrums of opinion discussed in this chapter, it is easier to state the distinction between national and cosmopolitan approaches than to apply it to individual thinkers. However, a particularly clear statement of cosmopolitanism is made in the course of Dirk Broekhuijsen and Henk Vordingâs critical review of existing theories of international tax justice:
Within Western countries, we have become familiar with raising âjusticeâ arguments with respect to modest, sometimes trivial, questions of tax legislation. When we look at justice on a worldwide scale, the issues are not at all trivial. They have to do with access to a decent life either in oneâs country of birth or in some better place of the world âŠ
It does not matter who you are or where you are. As a human, you deserve this access to a decent life, and tax has something to do with it. The complication is that, even if we hold that certain procedures and outcomes are deserved as humans rather than as citizens of a given state, national initiatives might still be the best (or only viable) means of providing these good things. There is something of this in the discussion of the taxation of older people by Jane Frecknall-Hughes, Nashid Monir, Barbara Summers and Simon James. Taxpayers within this category are likely to have certain common characteristics regardless of where they live, yet their actual experience is likely to depend on national choices as granular as the particular IT software used by each tax authority. In a different context but in similar vein, Gunnarsson notes that âwelfare programs are dependent on the fiscal culture of the nation stateâ. An even more extreme version of the same phenomenon is described by Ward, who shows that ideas about taxation may be directed to parochial and even sectional aims even if expressed in the most universal terms.
Many chapters in this book explore the interface between national and supra-national approaches to taxation. As we have already seen, Ordowerâs and Lindâs chapters look at the position of âoutsidersâ in national tax systems, who may be described variously as âimmigrantsâ and âexpatriatesâ. The contributions of Dagan and of HJI Panayi and Perrou also act as correctives to a crude division between the national and the supranational. Dagan reminds us that in spite of economic globalisation and the mobility of some tax bases, there is still a widespread belief that a state ought âto fulfil the collective will of its constituents as a society of equals in order to promote who they are as people âŠâ. Conversely, HJI Panayi and Perrou overturn the usual state-centred approach to the protection of taxpayer rights by showing that cross-border initiatives are not only compatible with such protection but may sometimes be essential.
C.Tax and Public Finance
A further divergence arises between those who focus narrowly on taxation and those who treat tax as an integral part of a wider collection of public finance problems. At least at first sight, some of the most familiar approaches to tax justice involve a radical abstraction of tax from its wider context. For example, when we think about the allocation of tax burdens according to âability to payâ or the need to exact an âequal sacrificeâ from the population, we tend to look first at the financial resources of taxpayers. We would accordingly expect the high earners and the wealthy to contribute more than those with more modest resources, either proportionately or on a progressive scale. We are less likely to think about the deservingness of individuals for welfare payments or other transfers from the state, or factors such as disability or structural disadvantage that can make it more difficult to earn income and require more of it to be spent on basic human needs. It is not that these matters are thought unimportant, but simply that the âability to payâ and âequal sacrificeâ frameworks allow them to be separated from the narrow question of how tax burdens ought to be distributed. The idea that similarly situated taxpayers should be treated similarly (horizontal equity) and dissimilarly situated taxpayers should be treated dissimilarly (vertical equity) is, if anything, even more consistent with this abstraction of tax from other questions.
In line with what John Snape and I have argued elsewhere,1 this abstraction implies a certain view of the world whereby tax should either be insulated from wider political considerations altogether or treated as a predominantly technical matter with certain predefined outlets for political considerations (eg rate structures). Neither John nor I are comfortable with this view and we are joined by a number of contributors to the present volume. Perhaps the clearest expression of this discomfort is provided by Broekhuijsen and Vording, who argue that a narrow focus on tax burdens is an anachronistic survival from the eighteenth and nineteenth centuries when âgovernment activity was still limited to services of a âpublic goodâ natureâ and in âconsequence, taxation was the main if not the only policy instrument that mattered to distributionâ. In the twentieth century, by contrast, taxation became âone of many government instrumentsâ, which meant that âtax burden distribution lost its particular relevance to the positions of individual citizensâ.
Lind offers a simple but powerful example of the considerations that become relevant once we abandon the attempt to analyse tax burdens in the abstract. She points out that rules that are formally neutral between potential taxpayers may be built upon a false assumption of gender neutrality in society more generally, â[r]esulting in the promotion of the male norm despite the system being formally gender neutralâ. Frecknall-Hughes et al make the similar observation that a system of tax administration that assumes IT skills, reliable internet connections and good health may place the old at a systematic disadvantage. More generally, Gunnarsson argues that ideas about good taxation and welfare reflect âfiscal cultureâ, a point that is particularly and ironically obvious in Wardâs relation of how ânatural lawâ was used in the seventeenth century to reinforce culturally embedded assumptions that now appear at best bizarre and at worst downright offensive.
III.Definitional Strictness
A temptation, at least for legal academics, is to insist that before speaking about tax justice we must achieve absolute clarity about how the term âtax justiceâ is defined. There is an obvious merit in ensuring that participants in a debate agree what they are talking about before they then proceed to agree or disagree on the merits. However, it is also possible that something is lost by overemphasising definitional clarity. If, without deciding the matter for now, the object of our enquiry is an imprecise and fuzzy collection of ideas and feelings, then an overly precise attempt at definition may miss the entire point of what âtax justiceâ is about. It is not a surprise, then, that our contributors take a range of attitudes towards definitional strictness. Without wishing to impose a straitjacket on colleagues who might see things in slightly different terms, it will be helpful to discuss these approaches in turn under the following headings: âvernacularâ, âphilosophical tropesâ, ârelative justiceâ and âabsolute justiceâ.
At the least strict end of the spectrum is Emer Huntâs exploration of political rhetoric and its consequences for tax reform. It is not Huntâs primary concern whether political actors are using the language of tax justice correctly, but rather how they are using it, for what reasons and how it might have influenced legal change. Although she is most interested in what is said in legislative committees, for the obvious reason that they have a credible if sometimes indirect connection with what is actually legislated, we are all aware of even more informal ideas of tax justice. âBig companies never pay their taxâ, âthe Tories hate the poorâ, âthe squeezed middle always loses outâ, âwhy should hard-working people pay for the shirkers?â We do not need to agree with all or any of these sentiments in order to accept that they are worth studying and may sometimes have important real-world consequences.2
If Huntâs focus is on vernacular usage, several of our contributors take issue with the slightly more sophisticated but nevertheless irritating phenomenon of âphilosophical tropesâ. This helpful term was used in the conference underlying this book to refer to the practice of adducing philosophers in support of views that one already holds, with the intention of adding additional weight to those views. The philosophical trope need not necessarily be representative of what the philosopher in question in fact wrote, and might not even be accurate. The point is that it is instrumentally helpful to the stating of an opinion. The clearest example of engagement with philosophical tropes in the present volume is Gunnarssonâs dissection of what she terms the âgrowth agendaâ and in particular on the reliance on Adam Smith by commentators hoping to avoid the leakage ...