Paul L. Caron

Monday, September 16, 2019

Tax Uniformity As A Requirement Of Justice

Charles Delmotte (NYU), Tax Uniformity as a Requirement of Justice:

Barbara Fried takes the view that uniform taxation — that is, a single rate applicable to all income levels — cannot be defended on any grounds of justice. She goes further by saying that, of all possible rate structures, it might be “the hardest one” to ground in “a” theory of fairness. Using the contractarian-constitutional perspective advanced by John Rawls and James Buchanan, this article argues that tax uniformity can be seen as a requirement of justice. After modelling how the political world realistically decides to distribute tax shares (self-interested parties act under a majority constraint), I show how the uniformity principle could emerge from the constitutional contract. In other words, rational individuals would choose uniformity as a procedural constraint under a “veil of uncertainty”; that is, with limited knowledge regarding their positions under the future application of the rule.

Moreover, I elucidate how the uniformity requirement integrates generalized criteria of fairness and efficiency into fiscal politics as it precludes fiscal exploitation and constrains majorities, and their most influential subgroups, to opt for policies in the direction of the Pareto frontier, and as such promotes outcomes acceptable to all participants.

Scholarship, Tax, Tax Scholarship | Permalink


The article misses a key reason to favor uniform tax rates. Uniform tax rates prevent powerful sectors from pushing through tax legislation that favor one sector over another. For example in the US under the 2017 Tax Act, wage income is taxed at much higher rates than QBI income under Sec. 199A and CFC income under GILTI and BEATS. This historical experience is why Pennsylvania's Constitution requires all taxes to be "uniform."

Posted by: jkelly | Sep 17, 2019 7:32:59 AM

Looks like a paper worth reading.

Posted by: Dale Spradling | Sep 18, 2019 7:29:15 AM