Thursday, March 24, 2022
Clinton Wallace (South Carolina; Google Scholar) presents Democracy As A Criteria for Taxation at Boston College today as part of its Tax Policy Workshop hosted by Jim Repetti, Hugh Ault, Ray Madoff, Diane Ring, Steve Shay & Shu-Yi Oei:
Recently, as democracies around the world have faltered, legal scholars in fields as diverse as election law, labor law and freedom of expression have turned to taxation as a tool for repairing and sustaining democracy. But there is a significant gap between tax theory and democratic theory that has left tax law scholars ill-equipped to respond to these calls for help. Tax scholars evaluating and designing tax policies generally focus on the normative criteria of efficiency, equity and administrability, with little regard for normative democratic theory that focuses on the conditions that shape a democratic community and can help it to flourish.
This paper offers an account of democracy as a central consideration in taxation in a democratic system of government. I introduce a set of democracy criteria, which would join efficiency, equity and administrability as a normative framework for evaluating the design of any tax system or tax policy change. The democracy criteria asks: does a change in tax rules strengthen or undermine democratic governance? This paper draws on democratic theory to identify connective tissues where taxation might enhance democratic decision making and democratic accountability.
In proposing the democracy criteria as consisting of considerations that supplement the traditional criteria for evaluating tax policy, this paper also examines how democracy promotion has been integrated by some scholars into each of equity, efficiency and administrability. I make the case that democratic considerations should not be subordinated to the traditional criteria, but rather should stand on their own, and in some cases supersede the traditional criteria. Approached in this way, the democracy criteria can facilitate tax responses to current challenges facing democratic governments.