Voluntary compliance beyond the letter of the Law: Reciprocity and fair play

This chapter deals with the obligation to pay taxes. It starts from the idea of voluntary taxation. In ancient Athens, the wealthy had a moral obligation to pay a periodic voluntary contribution (‘liturgy’). They paid for religious festivals and military expeditions which benefited society. This progressive voluntary tax was seen as a prerequisite for democracy, and so for equal political participation. Moreover, redistributive taxation thus mitigated substantial economic inequality. Nonetheless, there were ‘free-riders’ who undermined citizens’ trust and their willingness to pay. The lesson to be learned is that the moral (political) obliga-tion to pay taxes needs to be laid down in the law in order to create reciprocal trust that all citizens pay their (fair) share. This does not, however, preclude free-riding, for wealthy taxpayers and multinational corporations are often able to deftly play the (international) tax rules. Here the principle of reciprocity comes in. The principle of reciprocity underlies the obligation to obey the law and en-genders a duty of fair play with regard to the obligation to pay taxes. It is argued that compliance should not be reduced to minimalist rule-following, minimising one’s tax liability. This can be seen as taxpayers voluntarily complying beyond the strict letter of the law.