Abstract
This chapter aims at providing a minimal historical background to the present research. It does not pretend to be exhaustive. All that is said is based on secondary sources, providing only a taste of the literature on the matter. Notwithstanding such limitations, some notes on the history of taxation might be necessary to our enterprise. In positive terms, it renders clear that taxation is a mental artefact. Taxes are not hard facts belonging to the empirical realm, but political inst itut ions, creatures of the in-between individuals that is politics1. As it is the case with other institutional facts, they only have a temporal dimension2. Consequently, its emergence as a social institution can be dated, and its evolution can be structured in different period according to the general principles that regulated the institution. In negative terms, it provides us with the elements needs in order to challenge the arguments of doom of historical determinism.
“History does not teach much, but still teaches considerably more than social-science theories”
Hannah Arendt Civil Disobedience
“It is a pity but some other word beside taxation had been devised for so noble and extraordinary an occasion, as the protection of liberty and the establishment of an independent world. We have given to a popular subject an unpopular name, and injured the service by a wrong assemblage of ideas”
Thomas Paine The Necessity of Taxation
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References
Arendt (1997, 45).
Weinberger in MacCormick and Weinberger (1986, 38).
See §§ 15–24.
Habermas (1996b, 771). The paramount role played by the legal paradigm in legal education has been explored in Anglo-American legal theory. See MacCormick (1978, 122), Dworkin (1986, 10, 87–9, 245, 265) and Bell (1986, 46–9).
See § §298ff.
Touzery (1998, 45–6).
See §§ 15–24.
On the concept of the tax state, opposed to the fiscal state, see Schumpeter (1954b).
Karl Polanyi has made it clear that the market economy is a rare structure in economic history. See Polanyi (1977).
Tilly (1996, 50).
Finley (1991, 32) refers to the fact that this strengthened internal cohesion, as it allowed rulers to purchase legitimacy by means of somehow distributing the product of confiscation.
Tilly (1992, 96–7) and Ormrod and Barta (1995, 72).
Of course, the focus on classical Greece and Rome reflects the tendency to marginalise other political communities. But silence seems preferable to rely on quite fragmentary and either orientalising or unsound sources. On the risks of orientalising, see Said (1978).
Nozick (1974, 169).
Meiksins Wood (1994, 83–6).
This hypothesis is confirmed by the fact that the discharge of public offices was compensated with a per diem payment. This has been interpreted as evidence of the fact that Athens was composed by a massive class of passive citizens, who lived on the surplus obtained from slavery. However, payments were very modest, and seem to have been intended in order to ensure citizens (especially peasants) that even in rough times they will have some income and could avoid private patronage. See Finley (1991 34).
Finley (1991, 33).
Ardant (1971).
Sainz de Bujanda (1962b, 162).
Van Caenegem (1995, 36).
Ricca Salerno (1960, 12) and Sainz de Bujanda (1962b, 213–20).
This paragraph is mainly based in Oakley (1980).
Bartlett (1993, chapter 3).
Bartlett (1993, 80).
Ricca Salerno (1960, 12).
See Bodin (1977, book I, chapter X).
Molho (1971).
This seems to have been, unsurprisingly, a Dutch innovation. See ‘t Hart (1990).
Cf. Groves (1974, 13) and Touzery (1998, 24ff).
Cf. García de Enterría (1994, especially 34–42).
Cf. Kant (1996, 467). Cf. Otis (1764).
Cf. Escribano (1989), who argues that in the first Spanish liberal constitution we can see a distinction between the general legislative power and the power to tax.
Cf. Sièyes (1989, 57): “Les lois, qui devraient au moins être exemples de partialité, se montrent ellesmêmes complices des privilèges”.
Cf. Sièyes (1989, 56): “Nous attendons, de votre part, un acte d’obéissance à la loi commune, plutôt que vous avez si longtemps traité sons pitié”.
Cf. Sièves (1989, 57).
Cf. Gauchet (1989), Skinner (1998).
This is something that can be hinted at even in the work of authors like Hume and Adam Smith, and that is very clear in the work of Thomas Paine or in the program of the Jacobins in France
Smith (1976, book 1, chapter 2).
This leaves open a certain ambiguity in Smith’s argument on the basis of which it has been argued that he did not constitute a pure case of liberism.
Cf. Spencer (1994, 131): “The beneficial results of the survival of the fittest, prove to be immeasurably greater than those above indicated [basically, the provision of welfare benefits to the poor]. The process of ‘natural selection, as Mr Darwin called it, co-operating with a tendency to variation and to inheritance of variations, has shown to be a chief cause (though not, I believe, the sole cause) of that evolution through which all living things, beginning with the lowest and diverging and re-diverging as they evolved, have reached their present degrees of organisation and adaptation to their modes of life”. Spencer is a fascinating writer because he anticipated all arguments of liberists. A contemporary reader will be surprised by his pioneering analysis of unforeseen consequences of intentional action (Spencer, 1994, 94), his reliance on charity as a more adequate means of providing for the poor (Spencer, 1994, 128) or his reference to the undeserving poor.
Bruguière (1988).
Cf. the Guide des Citoyens dans l’évaluation du quart de leurs revenus pour la contribution patriotique, Chez Le Clere, Paris, November 1789. The pamphlet is included in the Kress Microfilm Collection, item 13961.4. The pamphlet is a dialogue written in a similar spirit to the leaflets produced by modern tax administrations in order to calculate the Income Tax.
Cf. Instruction publiée par ordre du Roi relativement à la contribution patriotique, Imprimeries de B Gibelin-David., Aix, available in the Kress collection, item 13961.8, which includes appended forms.
For example, the American Revolutionaries had to pay for the Independence War, at one time had no other choice than to issue paper money that was repudiated latter on. Similarly, financing war led French Revolutionaries to impose forced loans on the population.
See Hinrichs (1966).
Neumark (1974, 62–5).
This explains why the conceptualisation of taxes proceeded by means of importing concepts from private law. For example, this explains why the obligation to pay taxes was seen as an instance of the general category of obligation in private law.
Frison-Roche (1997, 199). Public debt is just a mechanism for spending now the taxes that will be collected afterwards.
This idea was echoed many years later by Spooner (1869, at the end of chapter III): “That the only security men can have for their political liberty, consists in their keeping their money in their won pockets, until they have assurances, perfectly satisfactory to themselves, that it will be used as they wish it to be used, for their benefit, and not for their injury”.
De Viti de Marco (1928, 97): “[U]na quota parte del reddito dei cittadini, che lo Stato preleva per procurarsi i mezzi necessari alla produzioni dei servizi pubblici generali”
Berliri (1945, 343): “[Q]uota individuale di un debito comune e divisibile”.
Griziotti (1929, 150).
Puviani (1901, 15 and 16), translation taken from Puviani (1993, 45–6 and 46): “the definition of ends which were to be attained by means of taxation was not regarded as falling within the realm of the individual or the conscience. Like the government, it looked as though these ends had a particular sphere of activity assigned to them by nature itself (...) in the period of highest exaltation of the individual (...) the individual appears as an element which is not conscious of the great results of his own work”.
Of course, not everybody agreed. Thomas Paine, who had become a French citizen and a Girondin delegate, expressed the arguments against such move in his speech to the National Convention on July 1795: “I might here ask, if those only who come under the above description are to be considered as citizens, what designation do you mean to give the rest of the people?” C f. Paine (1795. 25).
The Constitution of Pennsylvania (1776) seems to have been the first to use taxpaying as the criterion to confer voting rights. section 6: “Every freeman of the full age of twenty-one years, having resided in this state for the space of one whole year next before the day of election for representatives, and paid public taxes during that time, shall enjoy the right of an elector: Provided always that sons of freeholders of the age of twenty-one years shall be intitled to vote although they have not paid taxes”
Cf. Heller (1985, 288).
Mayer (1950, 192).
See Rodríguez Bereijo (1979).
Polanyi (1944). For the American case, see Fiss (1993).
Habermas (1996b, 773). See Fiss (1987)
Habermas (1996a, 408).
Cf. Schumpeter (1954a, 202): “Everything that happens in the political sphere reflects itself in the ideas about fiscal policy”.
Milward (1981, 63 and 65): “The imperfect mechanisms of incomplete democracies made the tariff books seem as important an expression of the political balance of the nation as the Constitution. They represented written compromises on real tests of political as well as economic strengh. Hence the extraordinary importance of tariffs in public argument when non-tariff barriers were probably, as now, much more important in regulating and obstructing international trade”
Musgrave (1995). See also Backhaus (1997).
Originally contained in Wagner Die Ordnung des österreichischen Staatshaushalts. 1863., published in 1864 in Vienna, quoted from Backhaus (1997, 267)
The classic statement is, of course, Keynes (1936).
Steinmo (1993).
Of course, there are always dissenting voices. Among those, we can find partisans of the old formal paradigm of law and the relationship between it and the economic system, like Friedrich von Hayek.
Offe (1996, 153–9) describes this institutional logic.
This is expressed in relative terms, or what is the same, compared to the total size of the economy.
Two main methods have been employed in economic literature, the so-called currency method and the model approach. The former assumes that shadow transactions are undertaken in the form of cash payments, thus leaving no trace. An increase in the size of the shadow economy will therefore increase the demand for currency. Further calculations are needed in order to make more precise the estimation, including the discount of conventional factors which increase currency demand and contrasting it with potential causes of increase of the informal economy (direct and indirect tax burden, transparency of the tax system, state regulation). The latter assumes that a set of variables serve as the indicators of the size of the shadow economy. However, both methods are open to criticism. The two of them have a hard time including factors like the perception of fairness in design and justice in operation of the tax system by taxpayers. See Schneider (1997, 6): “Other reasons -such as the impact of regulation, the complexity or visibility of the tax system, taxpayers’ attitude to the state, tax morality’ and so on- are not considered because data for most countries are not available. Additionally, detailed empirical findings are often of a confidential nature. See (Tanzi and Parthasarathi, 1993, 3). That might be explained, among other reasons because publicising detailed results might warn tax evaders of future monitoring action on the side of the tax administration and might also further erode the trust of the average citizen on the fairness of the tax system.
The shadow, informal or black economy refers to “all those perfectly legitimate activities, resulting in transactions (in kind or for payment) between individuals, which are (...) hidden from the authorities, principally the tax authorities”, in Pyle (1989, 3). For the size of the shadow economy, see Table 1. The shadow economy has grown at three times the speed of the official one since the 60’s. Cf. The Economist, 3 May 1997.
The overall level of tax fraud tends to be calculated by reference to the size of the shadow economy. Other sources of information concerning its size could be partial estimates of the tax administration concerning fraud on specific taxes (like excise taxation) or the counter-intuitive data on average income of different professional activities according to reported income. For example, in Italy and Spain, the average income of a liberal professional is lower or slightly higher than that of an unqualified employee, according to their income report. That goes against common experience and any serious estimation, pointing to considerable and widespread tax fraud. OLAF, the Antifraud Unit of the European Union, has estimated the levels of tax evasion associated with tobacco smuggling around 4.4000 million euro. See Financial Times, EU to sue Us tobacco groups, 21 July, 2000 and the complaint filed before the US District Court for the Eastern District of New York in the case The European Community v.RJRNabisco et al, available at http://www.nyed.uscourts.gov/pub/ruli ngs/cv/2000/00cv6617cmp.pdf.
This is more threatening than widespread public opposition to the tax system. Even most forms of civil disobedience are less problematic, because they challenge the prevailing political conception but at the same time point to an alternative one on the basis of which it is possible to structure social relationships. Cf. Arendt (1972). The threat to stability posed by disobedient citizens is to be blamed on the abuses of political authorities that force individuals to make use of this measure of last resort. On this, see Rawls (1969, 255).
Medlan (1984). 76 Cf. §75.
Medlan (1984).
Cf. §75.
Genschel (1999, 4).
Offe (1996, 118).
Habermas (1973, 101).
According to Eurostat, taxes on employed labour were 43.2% of total tax revenue in 1970 and 51.4, almost eight points more, in 1995.
Cf. §§183ff.
For a criticism, see Eisenstein (1961, chapter 5). The trend seems unstoppable. Recent examples are Spain (Decree-Law 6/1996, of June 7th, on Tax Measures) and the UK (Prudent for a purpose: working for a stronger and fairer Britain, in which the Chancellor of the Exchequer, Mr. Brown, announces that capital gains tax for business assets will go down to 10% in four years).
See OECD (1998). Cf. §197.
Cf. Tobin (1978), Tobin (1994). A good deal of bibliographical references and reports on political initiatives to implement the Tobin tax can be found at http://www.tobintax.org
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Menéndez, A.J. (2001). Somes Notes on the History of Taxation. In: Justifying Taxes. Law and Philosophy Library, vol 51. Springer, Dordrecht. https://doi.org/10.1007/978-94-015-9825-5_3
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