Solidarity, of What and among Whom? Regarding the Debate on the Justification of Taxation and Public Spending

Abstract

Debates on the foundations of taxation, addressed in a past issue of Discusiones, normally focus in strictly normative aspects thereof, but some premises deriving from the neoclassical theory are usually taken uncritically in regards to material features of taxes. In particular, debates often assume that taxes are a previous condition of public spending. However, other theoretical frameworks differ from the neoclassical theory, such as postkeynesianism, propose that taxes are not a previous requirement of public spending, but a tool to control the monetary mass, thus disappearing or mitigating the weight of the factual reasons to support taxation in general. Public spending, considered solely, takes a central role in structuring a solidarity purpose of public finance. Redistribution through taxes is factually feasible within a postkeynesian theoretical framework, but that depends on two theoretical factors that the normative purposes on taxes often ignore: the tax shifting and the tax incidence. If such factors are taken into account, the foundation of one or more taxes does not stem from their external legal structure, but from the feature of not having an incidence on low income people. Strictly speaking, the debate on “tax justice” should be only a part of a broader debate on the “public finance justice”.