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Year VIII, No.9/2009 219
BRIEF FORAY INTO TAXATION ETHICS
Lect. Narcis Eduard MITU, PhD
University of Craiova
Ethics, according to a dictionary consolidation of state. Invoking
definition 1 represents the "study of illegitimately, we consider “the criterion of
practical and theoretical aspects of efficiency”, the government (state)
morality, all moral standards of conduct decides that it must increase a tax or
appropriate to an ideology of a certain another or to change its tax regimen, and
class or society". Therefore, the taxation that "for the well-being of economy".
action may be assessed, as any product The economy is a system of
of human interaction and in terms of voluntary interactions between the
ethics. holders of the legitimate rights of
But... is the taxation ethical? property. In the architecture of this
Any vision upon taxation is system, government policies do nothing
indissolubly linked to the state and but to share some advantages for others
conceptions occurred along history in and disadvantages for another, hence
relation to its role on economy. the nature inherently conflicting of all the
Thus, etatist doctrines argue that arrangements based on coercion, so
taxation is an exchange between citizens devoid of ethics and legitimacy.
(those who "contribute") and state. Illustrious names of political
According to this view, taxation would economy and philosophy have scored on
appear to be, in fact, a voluntarily act. these ideas: Jean Baptiste Say, Frédéric
Etatism, however, is based on the idea Bastiat, Herbert Spencer, Lysander
that government is "our owner and Spooner, Franz Oppenheimer, Ludwig
master" and the citizens must obey. The von Mises, Murray Rothbard, Robert
state knows better than his citizens what Nozick, Helmut Schoeck, arguing that, in
do they need. From this perspective, reality, only the order of private property
voluntary transfer (read "confiscation") of has a voluntary nature, as it is based
the fruits of our labor through taxation is eminently on social cooperation,
crucial for state's health. Protector with production and exchange of legitimate
force, because people really do not pay rights of property.
taxes on a voluntary basis, on the Any other institutional
grounds that the killing (in favor of arrangement, they argue, is the result of
government) of a part of their properties the partial abolition of natural rights, by
would be the best investment they can the institutionalization (coercive) of a
make, the state (government) is the one policy of aggression, expropriation and
setting, in fact, how much should each exploitation of legitimate property. This
pay for their own security and for a sea of policy does not bear the imprint of market
other "public interests" which they believe relations, but represents the defining
they are necessary, in general, in favor of attribute of power (political). Moreover,
others and on the account of another. Oppenheimer said in his paper published
2
"Taxation as exchange" it was in 1908 "Deer Staat" that the state is
always the favorite speech of the political "the organization of political means" of
elites involved in and favored by the acquiring the wealth in society, meaning
1 2
Florin Marcu - Marele dicţionar de neologisme, Franz Oppenheimer - The State, Free Life
Editura Saeculum, 2006. Editions, New York, 1975.
220 Finance – Challenges of the Future
the organization which has a comparative come from "the business" with the state,
advantage in violence, and consequently who are not subordinated to the market,
the monopoly of taxation in a given but to the preferences of state
geographical area. bureaucracy.
Seen like this, taxation becomes Currently, in the public opinion
the best example of institutionalization of and economic theory, the ethical
state coercion in society, which draws argument against the tax has been
attention upon the lack of legitimacy and altered and replaced, subtly, with the
ethics of tax. utilitarian discourse from the theory of
Radical liberals (libertarians 3 ) "market failure". Thus, it is more often
dispute the legitimacy of any taxation, spoken about the situations when free
considering that this action, as the markets do not lead to an efficient
influence carried out over the citizen in allocation of resources. In this context, it
order to compel him to assign a part of becomes necessary the action of
the income which belongs to him by law, governments with corrective role and the
is a deliberate action of the state. In this phenomenon known as market failure
regard, it is said that the state makes the appears. The allocation of resources
worst robbery on people because, unlike which would contravene to the criteria of
a certain thief, the state dispossesses: efficiency is made when at least one of
- systematically not occasionally; the hypotheses of perfect competition is
- not only certain people, but a not present.
large majority; The most known cases of market
- not only what man owns, but failure are: monopoly, externalities,
whatever the state thinks that it might common-use resources, public goods.
own; The analysis of cases of failure
- finally and without hope of of the markets fall in the economic theory
recovery. of welfare, developed as the foundation
It is easy to recognize that of some recommendations regarding the
taxation divides society into two big government intervention in the markets'
contestant categories, as John C. function. The economic theory of welfare
Calhoun demonstrated since 1851 in his shows that market failures lead to
4
study "A Disquisition on Government" . inefficient allocation of resources, which,
Even if, formally, we all have the quality in their turn, are the source of some
of "taxpayer", however, economically, welfare loss.
some are more taxpayers than others. It The problem is that the argument
is, on one hand, about those who acquire of public goods can be abused, and even
their income from the private sector (the was, in order to extend the wealth and
net taxpayers of taxes) which are the power of governmental bodies. The
dependent on the market, on satisfying theory of public goods is based on an
the consumers' preferences. On the other optimistic idea upon the efficiency of
hand, it is about those paid from the public choice and the government
public budgets (the net consumers of intervention in the functioning of the
taxes) as well as those whose earnings markets. The fact that things are not so
simple one shows a series of failures of
government intervention in the
3
Libertarianism is a political doctrine that supports functioning of the markets.
the full freedom of individuals in all matters, whether
civil, political or economic. The Libertarianism has
But even when it is agreed on
th
its roots in classical liberalism of the XIX century. some priority public interests and the
The libertarian ideas were refreshed by some utility of taxation, not all the difficulties in
th
American thinkers in the second half of the XX explaining the possible ethical character
century, such as Ludwig von Mises, Friedrich
Hayek, Ayn Rand, Milton Friedman, Murray
of taxation disappear.
Rothbard, David Friedman sau Robert Nozick.
4
http://www.constitution.org/jcc/disq_gov.htm
Year VIII, No.9/2009 221
Contrariwise, new questions Must the money from taxes be
arise, including of moral order, regarding used to guarantee some loans of private
the optimal public policy of taxation. companies (presumably of high
Minimum or maximum tax rates? economic interest)?
Progressive tax rate or fixed rate Is there any moral sense that a
(proportionally)? normal taxpayer (having a low-income or
What amounts should be an average-income) to contribute to
deducted (tax excluded)? supporting or securing some operations
Who should be exempt from decided by owners and entrepreneurs
taxation? (usually high-income people), which will
What are the priorities in using also be the beneficiaries of the profit
the amounts collected from different obtained in the end.
types of budgets? The answers are likely to be
Must we use the money obtained partisan in terms of on what part of the
through taxation (inclusively from people barricade our interests will be! But is it
with low incomes) to support private morally right?
entrepreneurs, certain companies
considered (on what criteria) important
for the national economy?
REFERENCES
Calhoun J.C. A Disquisition on Government, Columbia S.C., USA, 1851
Drăcea R. Finanţe publice, Editura Universitaria, Craiova, 2007
Marcu F. Marele dicţionar de neologisme, Editura Saeculum, Bucureşti, 2006
Oppenheimer F. The State, Free Life Editions, New York, 1975.
Văcărel I. and Finanţe publice, Editura Casa Didactică şi Pedagogică, Bucureşti, 2003
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