Thursday, March 29, 2012
Tax policy is formed in an inherently political environment where everyday notions of fairness and justice contribute heavily to actual choices and outcomes. While philosophers and other theorists may have their own conceptions of justice, there are also everyday notions of justice that reign at the level of the ordinary citizen. This talk first outlines the foundations of folk justice for taxation, drawing on notions of procedural justice, equity and social exchange theory, qualified perceptions of fairness, moral mandates, and system justification theory. After illustrating these concepts with examples from the property tax and tax compliance, we focus on the implications for progressive income taxation and estate and gift taxation. Using a variety of evidence including econometric analysis of surveys, historical narratives, and online experiments, we illustrate how concepts of folk justice can explain puzzles in the implementation of income and estate and gift taxation.