Decisions regarding the proper levels and forms of taxation are not merely questions of economics. Instead, taxation should be seen as the manifestation of a nation’s philosophical ideals of distributive justice. As such, legislators must consider the underlying philosophical beliefs of their constituents in determining the tax laws. Those philosophical beliefs should then inform decisions regarding the form those taxes should take, and amount of tax that the government should impose. This Chapter considers a variety of political philosophical positions that are common in contemporary societies, and then evaluates how a legislator might incorporate those views into the creation of a system of tax laws that properly reflect those political perspectives. In order to consider these issues in a variety of circumstances, this Chapter contemplates the philosophical positions of libertarianism, political liberalism, and utilitarianism, and then thinks through how each of these positions would apply to the creation of a variety of tax laws, including sales taxes, property taxes, wealth taxes, and income taxes. Rather than being an exhaustive analysis of the development of moral standards for taxation, this Chapter is meant to be an example of how a legislator could go about developing such standards in her own particular circumstances.
The author would like to thank Stefan Bird-Pollan, David Gamage, Robert van Brederode, and participants in the SEALS Tax Policy Discussion Group and Ethics and Taxation Workshop for helpful comments on earlier drafts of this piece. Thanks also to the University of Kentucky College of Law for supporting this research with a summer research grant.
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