TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, June 20, 2018

We Should Tax The Clintons And Other Former Senior Government Employees At A Higher Rate

Limor Riza (Ono Academic College), Should We Tax the 'Clintons' and Other Former Senior Civil Servants More? Yes, We Should, 18  U.C. Davis Bus. L.J. 109 (2017):

This paper debates whether former civil servants should be taxed differentially. It argues that whenever public officials’ post-retirement income in the private sector is derived from their previous office, an additional tax should be levied on them, since in such situations the ability-to-pay principle is an insufficient horizontal equity criterion. This idea is grounded in equity propositions and may be justified by various liberal theories of equal opportunities and utilitarianism.

As a rule, the paper supports the ability-to-pay principle given the common shortcomings underlining the benefit principle. Nevertheless, this principle is not entirely divorced from the benefit rule, since one's ability is dependent upon the resources and benefits granted by the state.

Thus, part of the ability to pay doctrine is based on the benefit rationale. In some instances, where access to public resources is not open to all individuals, the ability to pay principle cannot be an exhaustive measure promoting horizontal equity. In order to elaborate this preposition, the paper focuses on the taxation of senior civil servants.

Part of the former public servant’s ability to earn is based on the benefit he obtained from using public resources inaccessible to other individuals. Thus, there is a direct link between those individuals' ability and benefit and it is more equitable to tax them accordingly. By linking the ability to pay and benefit principles, we can justify a higher taxation on former senior civil servants, primarily to achieve horizontal equity. Since those individuals with higher ability to pay benefit more from the state's resources, a proper tax system should tax them more for utilizing these benefits.

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I love it when I see another Don Quixote. I don't feel so all alone.

Posted by: Dale Spradling | Jun 21, 2018 6:39:32 AM

Americans who advocate for taxing everyone at a higher rate but fail to voluntarily pay the U.S. Treasury more in taxes should be taxed at a higher rate.


Posted by: MM | Jun 22, 2018 6:40:27 PM

The article does not call for "taxing everyone at a higher rate."
It calls for taxing only certain income at a higher rate,
as we tax income from labor at a higher rate than capital gains or offshore income.

Posted by: Pat Oglesby | Jun 23, 2018 5:22:24 PM