Development and Underdevelopment in the History of Economic Thought

Tax Justice and Reciprocity: Between Exchange and Gift

Silvestri Paolo Silvestri, University of Turin, Department of Economics and Statistics

Why should we pay taxes? How should we share burdens and benefits of taxation? The endless debates on the two most common and enduring theories of tax justice – benefit-received principle (BP) and ability-to-pay principle (AP) – can be regarded as a continuous attempt to find satisfactory and shareable answers to these questions. According to these principles individuals should pay taxes in proportion: to the benefit they receive from public good and services (BP), and/or to their ability to pay, measured on the basis of the taxable capacity of an individual (AP). The main objective of the present paper is to provide new answers to these old questions by resorting to the category of reciprocity. I will firstly explore the place of the “exchange” in taxation, through an analysis of the several attempts to reformulate the BP and its connections with the contractualism tradition, showing also the possibility of a complementarity between the BP and AP. Secondly, I will explore the place of “gift” in taxation. Starting from the widely accepted ideal-typical distinction between “taxes” and “other levies” – levies are paid in change of something received by the taxpayer while taxes are paid without anything in return – I will show: a) that it is possible and useful to re-read the unresolved tension between the two main theories of tax justice – BP and AP – with the categories of reciprocity, namely as a problem of the distinction between exchange and gift, but without necessarily opposing one to the other, or re-proposing the self-interest / altruism dichotomy; b) that it is possible and necessary to understand taxation also as a form of gift. ******* Note: Part of the research leading to this paper has received funding from the People Programme (Marie Curie Actions) of the European Union’s Seventh Framework Programme (FP7/2007-2013) under REA grant agreement n° [609305], and from the STOREP Grant Award 2018 (Italian Association for the History of Political Economy).

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Keywords: Tax justice; benefit-received principle; ability-to-pay principle; reciprocity; exchange; gift.