NWO Veni project: Putting Your Money Where Your Mouth Is - Philosophy of Taxation

Taxation is an important way in which governments can implement policies to approximate philosophical ideals about the distribution of income and wealth. Nevertheless, the topic of taxation has, for a long time, been ignored by philosophers, who instead mostly focused on how governments should spend the taxes they collect. This is a shame, because then academic and public debates about taxation will mainly be conducted by appeals to interest and efficiency, rather than philosophical ideals about justice.

Only recently have political philosophers started to work on philosophical justifications for various forms of taxation. This emerging philosophical literature is still fragmentary, in that it tends to examine arguments for different tax bases separately, without a coherent story overall. The project sets out to make an essential contribution to the literature on philosophy of taxation by holistically examining, using the method of reflective equilibrium, which activities and/or things should be taxed and at what rates.

The aim of the project is to come up with concrete suggestions for tax system redesign by examining two questions:

(i) Tax base: What activities and/or entities should be taxed? and
(ii) Tax rate: To what degree should these be taxed?

The project consists of three parts. First, I will focus on philosophical arguments in favor of and against five possible tax bases: labor income, wealth income, wealth itself, gifts and inheritance, and consumption. Then, I will consider to what degree different rates of taxation are justified both on the same tax base (progressive taxation) and between the different tax bases analysed during the first part. Finally, I will analyze my findings and translate these into concrete policy suggestions for reforming existing systems of taxation. This thorough and systematic examination of the philosophy of taxation will make an essential contribution to developing more just systems of taxation.

Wealth inequalities in the Netherlands are amongst the highest in the world. Due to growing awareness of the negative effects of rising wealth inequalities, reforms of the Dutch tax system are being debated. Philosophers could make an important contribution to such debates with their theories of just distributions of income and wealth, but have done relatively little work to translate these abstract theories to concrete suggestions for the design of tax systems. The aim of this project is to change this and, in doing so, enrich academic and public debates about highly needed tax system reforms.