Legal philosophers (and philosophers more generally) have a beautiful way of cutting through the noise and expressing in the simplest language that which takes us mere mortals thousands of words to explain. This clarity presents itself of course whenever these people stumble upon tax. Take for instance this one paragraph from Tony Honoré in which he explains that whilst a moral obligation to pay taxes might arise, it is law which provides its substance:
“The need for determinants of morality is particularly clear as regards obligations owed by members of a community to their community. Taxation affords a good example. According to most people’s moral outlook members of a community should make a contribution to the expense of meeting collective needs. A morality which denied this would hardly count as co-operative. In a monetary economy the contribution has to be mainly in money, and takes the form of paying taxes. So members of a community have in principle a moral obligation to pay taxes. But this obligation is incomplete or, if one prefers, inchoate, apart from law. It has no real content until the amount or rate of tax is fixed by an institutional decision, by law. What amounts to a reasonable contribution is not otherwise determinable, since what is required is a co-ordinated scheme which can be defended as fair not merely in the aggregate amount it raises but in its distribution. Taxpayers cannot settle it for themselves, as people can within limits settle for themselves, say, the proper way of showing respect for the feelings of others. Apart from law no one has a moral obligation to pay any particular amount of tax. An obligation to pay an indeterminate sum is not an effective obligation; it requires only a disposition, not an action. So, apart from law no one has an effective obligation to pay tax. If there were a society in which morality was taken as a sufficient guide to conduct apart from law it would therefore not be viable. It would grind to a halt and disintegrate for lack of resources. For this crucial moral and political obligation, vital to the life of a complex community, morality depends on law in the sense that to create an effective obligation it must have recourse to law” (Tony Honoré, ‘The Dependence of Morality On Law’ (1993) 13 OJLS 1)
Tony Honoré would be little surprised then that when provided with a voluntary opportunity to pay more taxes, people might choose not to do so. The obligation to pay tax has been discharged. There is no further moral duty owed. This seems to be precisely what has occurred in Norway. In an interesting experiment, the government introduced a scheme whereby taxpayers could voluntarily pay more taxes than due under the law. From June 2016 to July 2017 however, the scheme raised just $1,325 (which is perhaps less than the cost of administering the scheme).
However, the Honoré thesis relates only to the idea of an effective obligation – it does not remove the possibility that people might still feel inclined to contribute more to the common pot than is specified in the law. For this reason, different results may be witnessed elsewhere. The US for instance has had a voluntary scheme in place since 1961 and has raised over $100mil to date. Even accounting for population size, there is still a significant difference in outcomes between the US and Norway.
Raz might use the “normal justification thesis” to help us understand the divergent results. Raz wrote as follows:
“the normal way to establish that a person has authority over another person involves showing that the alleged subject is likely better to comply with reasons which apply to him (other than the alleged authoritative directives) if he accepts the directives of the alleged authority as authoritatively binding and tries to follow them, rather than by trying to follow the reasons which apply to him directly” (Raz, The Morality of Freedom (OUP 1986) 53)
Thus, a prerequisite for authority normally is the presence of independent reasons which apply to the subject. When it comes to tax, people will normally accept as authoritative law which prescribes the need to pay a specific amount as there already is reason to give a fair share of resources for the common good.
This conception of authority based on reasons might give us an insight into the divergent result in Norway and the US. The reason to pay tax – to give a fair share of resources for the common good – might be felt no longer to apply in Norway generally after satisfaction of statutory obligations, whilst in the US there might still remain some residual reason for some people. And indeed, that makes sense when the tax systems are compared (for instance with respect to income taxes: lower in the US than in Norway).
Perhaps these twin theories about obligations and authority should be applied more broadly to debates around tax law and policy. Do they help illuminate issues around tax avoidance and evasion? About the relationship between states and supranational bodies when it comes to tax reform? The setting of tax rates? Or perhaps legal philosophy itself is merited a place more generally in the debates (in a previous blog for instance, I wrote about Hart’s “core” and “penumbra” idea in the context of tax avoidance). The texts cut through the noise, and that is something which is pretty desirable right now…