Article III. Formulation and Arguments of the Conclusion

Taxes are not a real burden immediately imposed upon goods, but correspond to the personal obligation—by which citizens are bound from legal justice—of contributing from their own possessions to the common good.

The perfect method of distributing taxation, however, which must be approached as closely as possible but prudently, is not that portions of tax uniformly correspond to portions of proceeds, nor that they increase according to each person’s means, by a constant law, according to an arithmetical or geometrical proportion; rather, the perfect method is that which, proceeding as a sort of mean between the two, rests upon the various functions of proceeds.

105. Scope and division of the thesis. In the former part of the thesis, against a few, we defend the more common opinion concerning the species of the obligation to pay a tax, according to which it is considered a burden not of things but of persons. In the latter, we first admonish that one must strive truly but prudently toward the perfect ordering of taxes, insofar as opportunity is given and the procurement of the common good permits it; we then place the perfect method in the system which we sketched in the last place. We distinguish the classes of incomes, however, by function rather than by origin.

First Part.

106. I. THE TERMS ARE EXPLAINED.

Taxes: those properly so called, which are distinguished from the various fees by which citizens compensate for benefits obtained.

Are not a real burden immediately imposed upon goods: for this is the proper characteristic of a real burden, that it affects a person on account of a thing.

But correspond to a personal obligation: here we understand as personal an obligation which, even if perhaps—as not rarely happens—it must be fulfilled by a real performance, nevertheless directly affects the person, and things insofar as they pertain to the person.

By which citizens: by this name we here address the members of a community which is governed by its own laws.

Are bound from legal justice: this, therefore, is the formal title of the obligation.

To contribute from their own: that is, from those things which are ordered to their own utility, such as their own labor and especially their own fortune.

To the common good: that performance, therefore, is a certain positive and due method of cooperating toward the common good.

107. II. PROOF.

Argument 1. For by paying taxes, citizens procure the common good through a suitable means imposed by law: for they supply the lack of the treasury, so that there is commonly at hand that from which public expenditures may be met.

But. Citizens are bound by a personal obligation of legal justice to procure the common good through suitable means prescribed by law.

Therefore. The former conclusion of the thesis positively stands.

Alternatively: the obligation to pay taxes corresponds to the right of exacting them; political authority exercises this right in the name of the community as such.

But. The proper right of the community is adequately answered through legal justice, whose offices are proper to the members. Therefore.

Argument 2. The obligation under discussion is either personal, as we have described it, or it is a real burden. This major of the dilemma is not disputed.

But. It is not a real burden. Therefore.

Proof of the minor. a) A real burden cannot be understood without a right in the thing belonging to political society over the goods which are said to be burdened. But whence would that right arise? Will you say that, by the very fact that citizens possess or produce certain goods, immovable or movable, a proportional part of those goods immediately pertains to fiscal ownership? Who would not see how gratuitous and how strange an utterance of this kind would be? Or will you rather explain the matter in this manner: that citizens, by the very fact that they enter political society, are considered to bring all their fortunes into the common stock in order to form a common mass (social capital), henceforth belonging to the State, which, by imposing a tax, would thus appear to gather some fruits of its own field? This manner of speaking seems in fact to have pleased some; but it is repugnant to the true notion of perfect society, which is a society not of monies but of persons.

b) If the burden were real, goods would be affected by taxation without respect to the patrimony to which they pertain. It would be foreign to consider by what debt their owner is bound; rather, all taxes would have to be strictly real—in the sense explained above, no. 99, b—which nevertheless all economists reject with one accord as contrary to distributive justice.

108. III. DIFFICULTIES.

1. Even foreigners pay taxes. Therefore. The obligation is not proper to citizens. Thus Cauwès.

Reply. a) Indirectly. Foreigners also are bound by certain other laws. Therefore, if the difficulty proved anything, it would have to be denied that the duty of obeying laws is a personal obligation of citizens.

b) Directly. I distinguish the antecedent. Under the same title as citizens, I deny; under another title, I pass over: for they do not bear all taxes.

They are bound to taxes insofar as, for example, on account of the goods which they possess, they participate in certain benefits of the administration of the realm, whence it is equitable that they participate also in the burdens; or insofar as, upon this just condition, they are admitted to possess goods or practice commerce. Therefore, in reality, what they pay assumes more the rationale of a certain fee. Finally, since this is done universally, there is also a certain compensation among nations. Cf. this difficulty already solved by Molina, vol. 3, disp. 668, no. 2 and disp. 669, no. 3, and by C. de Lugo, vol. 2, disp. 36, no. 28.

2. An objection could be made from the other opinions which we recited above, no. 104.1, and did not directly refute in the proof itself. In order to refute them precisely:

a) If you say that a greater equality of fortunes is to be pursued through taxes, we reply that, on account of the disparity—which we admit appears excessive to not a few—an invasion by the State into private dominions in order directly to restore equality cannot be permitted, as the state socialists would wish; especially since the evil would by no means be rooted out radically in that manner. Rather, through opportune social laws, unjust increases of fortunes from usury, fictitious speculations, certain monopolies, etc., are to be prevented. Cf. Rivista Internazionale [International Review], 1896, pp. 190–192.

b) The Hegelian conception falls together with the idol itself, namely the State, which is proved to exist not for its own sake but for the common good of men.

c) The obligation of taxes cannot be reduced to a contractual obligation, as others wish, unless you follow the error of the social contract. Moreover, the obligation would then be one of commutative justice with the burden of restitution; and that citizen who deservedly complained that the commonwealth had been administered badly, at least in relation to himself, would now owe nothing. Who would approve these consequences?

d) If, in order that we may come to the special explanations, you consider the contract as an exchange of benefits, the burden of each individual will have to be determined from the benefit received. Yet taxes are owed to pay lavish expenditures—prodigalities—or on account of an activity which redounds to the indivisible utility of all: for example, on account of the public administration of justice, etc. How would you assess what has fallen to each person in these things? Cf. Cauwès, no. 1228.

e) If you say that insurance of goods—an insurance premium—is compensated by taxation, you will wrongly have reduced the function of political authority to the protection of rights alone. Moreover, whatever damages proceeded from private injuries would then have to be repaired from the public treasury. Cf. Cauwès, loc. cit.; H. Denis, pp. 66–71.

Second Part.

109. I. THE TERMS ARE EXPLAINED.

The perfect method, or that which corresponds exactly to the principles pertaining here and handed down above concerning both kinds of justice, legal and distributive. In French you would call it the ideal.

Of distributing taxation. Having relegated to the Scholia the question concerning the just quantity which can be imposed upon the citizens taken together, we restrict the matter to be disputed to distribution. We always posit, however, a society of equal citizens, such as now obtains everywhere.

Which must be approached as closely as possible but prudently. By these words, besides the obligation of striving toward this perfect method, we inculcate that it is lawful, for a public cause, to depart from the perfect method. We establish a rule which is to be applied insofar as it can be done prudently. Accordingly, we preferred to say perfect method—the ideal—rather than just method. For a less perfect system which is lawfully retained cannot be accused of injustice.

But if it is lawful sometimes to take less account of the method which is in itself more perfect, it will be much more lawful to set aside certain means which are in themselves more suitable and efficacious but which do not appear capable of being employed without a prevailing detriment to the common good.

Is not that portions of tax uniformly correspond to portions of proceeds. By these words we describe the proportional system.

Nor that they increase, according to each person’s means, by a constant law.... These words designate the progressive system as it is commonly understood and in fact advocated by socialists.

According to an arithmetical or geometrical progression. For the form of progression which we reject can be conceived in two ways, as is evident from these two examples:

Rather, the perfect method is that which proceeds as a sort of mean between the two. It is a mean because it concedes something to each of the opposing opinions, and because, according to the definite manner in which it is understood, the two forms are mingled to a greater or lesser degree.

Rests upon the various functions of proceeds. Here we designate the kind of distribution which we described at the end of the preceding article. There is indeed no single manner of conceiving it. We handed down several above, among which we leave a free choice, especially since the practical difference is not so great. We judge, however, that an apt distinction of incomes is to be drawn not from origin but from destination. Hence by this positive mark we designate the form of distribution which we judge preferable.

110. II. THE FORMER MEMBER OF THIS PART IS PROVED.

The perfect method of distributing taxation must be approached as closely as possible but prudently.

For on the one hand, a legislator who neglected the perfect method of distributing taxation would be an inequitable distributor of taxation and would offend against commutative justice; on the other, the necessity of the common good demands in this matter moderations which are employed by public power without any injury to the citizens.

Therefore. One must indeed strive toward the perfect method of distributing taxation, but only insofar as it can be done prudently.

Each assertion of the antecedent is proved.

a) The perfect method is said to be that which corresponds to equal distribution. Justice of itself, and indeed commutative justice, requires equal distribution. For it is established from the preceding thesis that equal distribution is demanded by distributive justice; that inequality is also opposed to commutative justice is evident from the fact that public power, while exacting from some a greater portion of tax than equitable distribution allows, would despoil citizens of their own goods without title or right.

b) Besides the fact that, on account of various shiftings, inequality can already be corrected, or even compensated by the many benefits which the wealthier furnish to the commonwealth, a system once received by custom is not changed without danger of protests and disturbances and therefore of detriment to the commonwealth. Add the still-fervent controversy concerning the truth of the proposed doctrine and the many difficulties which surround its execution; and you will easily perceive why something more perfect must be attempted prudently and gradually, without being perceived, and why the legislator should not judge that some prevailing system must be entirely overthrown before persuasion concerning the justice of the other has become more universal and the practical obstacles have been more fully removed.

But from legal justice, citizens ought to bear with equanimity the economic inequality of an imperfect system which the common good demands, to which they know that the regime of private property is to be ordered.

Therefore, without violation of any justice, the necessary moderations of political prudence are employed.

Cf. an excellent confirmation of this doctrine in Suárez, De Legibus [On Laws], bk. 5, ch. 16, no. 8.

111. III. THE SECOND MEMBER OF THE SAME PART IS PROVED.

In view of the importance of the matter, we shall separate the three points of which the assertion consists.

1. The perfect method of distributing taxation is not that portions of tax uniformly correspond to portions of proceeds.

For the proposed method:

a) Falls short of the equality of distributive justice;

b) Is supported by vain and fictitious foundations;

c) Compels its patrons to speak contradictory things.

Therefore. It is to be rejected for three reasons.

To the antecedent:

a) It falls short of the equality of distributive justice. For this justice wills that citizens pay uniformly according to their means, according to their ability to pay. Thus teach Molina,¹ Lessius,² and C. de Lugo;³ thus also Smith and the authors whom we oppose in the conclusion.

¹ Op. cit., vol. 3, disp. 668, no. 1.

² Op. cit., ch. 33, no. 6.

³ Op. cit., vol. 2, disp. 36, no. 23.

But. The ability of citizens to pay does not uniformly correspond to portions of proceeds.

Therefore. Distributive justice forbids portions of tax to correspond uniformly to portions of proceeds.

Proof of the minor. For the more necessary or useful the use of proceeds is to you, the more precious they will also be to you, and by that fact the less ability there will be to take something from them.

But portions of proceeds do not have the same use: those destined for procuring sustenance are more necessary than the others, among which you will also easily observe various degrees of necessity or utility.

Therefore. The ability to pay does not uniformly correspond to portions of proceeds.

b) It is supported by vain and fictitious foundations.

For if you ask the patrons of that system concerning the reasons for their opinion:

α) Either they rest upon a presumption, as though the benefit received from the commonwealth were to be measured by acquired fortunes. Thus P. Leroy-Beaulieu⁴ and Cauwès, no. 1220.

⁴ Cf. op. cit., p. 142, where he employs this strange reasoning: “The share of each citizen in the total amount of taxes ought theoretically and in strict equity to be proportional to the advantages which he derives from the expenditures of the State and to his share of responsibility in the establishment of the debt of the State.” Thus far, p. 142. He continues on p. 152: “Since this assessment is impossible, it is presumed that citizens participate in the advantages and the faults of the government in proportion to their incomes!”

But after they themselves have confessed that it is altogether hidden from us in what proportion each person comes into a share of the common benefits; after they have approved the words of Stuart Mill in which he contends that public expenditures correspond in no definite proportion to the resources of individuals, and indeed that, if you wished to seek a norm from a proportion of this kind, whatever it may be, the more wretched would have to be burdened;⁵ with what appearance of truth, I ask, can they allege a presumption of this kind?

⁵ “If we wanted to estimate the degrees of benefit which different persons derive from the protection of government, we should have to consider who would suffer most if that protection were withdrawn: to which question if any answer could be made, it must be, that those would suffer most who were weakest in mind or body, either by nature or by position.” Stuart Mill, Principles of Political Economy, bk. 5, ch. 2, §2.

This doctrine, moreover, is directly refuted thus:

I distinguish the assertion. The presumption upon which it rests would be just if the common good consisted only in the faculty, made common, of increasing goods, I pass over; otherwise, I deny.

β) Or they adduce this confirmation: he who possesses one hundred acres enjoys social protection for a quantity of goods which exceeds tenfold that which the owner of ten acres has to protect.

Therefore. Equity demands that the former pay ten times the tax with which the latter is burdened, as the proportional system holds.

Reply. I deny the consequence altogether, both because it labors under the false supposition that public money is consumed entirely or for the greater part in the protection of possessions, whereas most public expenditures are of another kind; and because the protection of one hundred acres does not require expenditures ten times greater than the protection of ten acres.⁶

⁶ Cf. Cauwès, no. 1220.

γ) Or, finally, they argue from the fact that the proportional system alone provides a mathematically certain and definite rule.

Passing over the assertion for now, the reply is that this rule is certainly false and therefore is not to be preferred to a rule perhaps less definite but which approaches the truth more closely. How often does it happen that, in a moral matter, several things cannot be exactly defined? What, for example, is the comparison of the good of fortune with the good of the body taken reduplicatively?⁷ Yet judges do not therefore refrain from defining the sum by which bodily injury must be compensated.

⁷ We add this in order to cut off an occasion of error. From an injured body, someone often suffers a loss of fortune which can be compensated by money. But it is not a question here of this compensation, but of the sum which is formally commanded to be paid on account of a wound inflicted or another injury of a higher order.

If the ease of a rule proved its excellence, the very exaction upon heads—a capitation tax—would, on account of its simplicity, have to be approved by the suffrages of all.

c) It compels its patrons to speak contradictory things.

Are the defenders of that system consistent with themselves:

α) When they deny that there is a definite proportion between public expenditures and goods possessed and nevertheless constitute their system upon that proportion, defined by presumption;

β) When they admit that the function of political authority is not the mere protection of rights and wish to derive from protected rights the portions of taxes which individuals must pay;

γ) When not a few of them certainly concede that nothing is to be contributed from incomes destined for procuring food, because there is no ability to contribute, and nevertheless deny either that there is an unequal ability in the other portions of income or that the very quantity of the tax ought to vary according to the unequal ability?

2. The perfect method of distributing taxation is not that the portions to be contributed increase according to each person’s means, by a constant law, according to an arithmetical or geometrical progression.

Proof. For this system is absurd, contrary to each norm of distributive justice, and logically flows toward the opinions of socialism.

a) It is absurd. For while it wills an infinite progression—an indefinite progression—it at the same time constitutes it in such a way that it soon ceases: for the portions which would have to be contributed according to that system would shortly equal the proceeds of the wealthier.

b) It is contrary to each norm of distributive justice (cf. no. 63).

The higher norm is drawn from the common good. That method of taxation which deprives the community of necessary monies is opposed to it. But who does not see that the wealthier, lest they feel too great a burden, will carry their persons and resources into other regions?

The lower norm is that of preserving equality among citizens. In this system both persons and things would be treated unequally. Things, indeed, because although the various portions of incomes have various uses and therefore are of unequal value, nevertheless the same burden of tax is imposed upon each portion; persons, however, because those portions of incomes which are of the same utility are unequally burdened according to the condition of the possessor, so that the wealthier, who are compelled to hand over all their incomes to the treasury, cannot seek even their sustenance for themselves from their proceeds.

c) It logically flows toward the opinions of socialism. For if you seriously wish, as the defenders of this system contend, to bring it about in some manner that the burden is felt uniformly by all—equality of sacrifices—you will not be able to obtain this unless fortunes are made equal, which pleases the state socialists.

The more profound reason why you feel the burden less if you abound in resources than if you are of a small fortune is this: because, in the former case, you can, provided that the tax is moderate, contribute a substantial sum from the incomes which remain—or which have a use pertaining to pleasure—while a poorer man is compelled to take something away from the more useful portion of his income.

3. But the perfect method is that which, proceeding as a sort of mean between the two, rests upon the various functions of proceeds.

Proof. Argument 1 we draw from the perfect agreement of that method with both norms of distributive justice. (Cf. no. 63.)

For that system contains these characteristics:

a) Morally all citizens ought to contribute some portion of the public money;

b) Only a moderate portion is exacted even from the wealthiest;

c) The more proceeds increase, the less the portions of tax which correspond to portions of proceeds differ, so that rather soon, after one has arrived, for example, at an annual income of ten thousand francs, the remaining portions are burdened almost uniformly. (Cf. above, no. 104, at the end.)

But. The first two characteristics correspond perfectly to the higher norm of distributive justice; the last to the lower norm. Therefore.

Proof of the minor. The common good, which is the higher norm, requires: a) That those to whom political suffrage belongs—“morally” all—ought to contribute something,⁸ lest they rashly attempt to increase public expenditures; b) That a burden too heavy or odious be imposed upon no one; c) That there be no danger that larger fortunes be transferred to other seats; d) That nevertheless the total of taxes suffice for providing for the commonwealth.

⁸ “Every citizen who has the right to vote must pay some tax.” Leroy-Beaulieu, op. cit., p. 209.

But. The first three points manifestly correspond to the first two characteristics. It is also easy to understand that, as soon as morally all citizens ought to contribute something according to their means, matters can conveniently be arranged so that, without excessive burden upon anyone, the treasury does not lack necessary resources.

Nor is the equality among citizens, which we established as the lower norm of distributive justice, less well preserved by the proposed method. We bring this about thus:

A tax is a personal burden by which citizens are commanded to make common a portion of the goods which they possess. True equality will therefore be had if all citizens, as possessors, are held in the same position by the treasury. They will be treated in the same manner as possessors if the methods of taxation are accommodated to the variety of functions by which portions of incomes differ from one another. And in fact:

The various functions of incomes must be distinguished. For since external things are numbered among goods because they redound to the utility of men, it is evident that, in the present argument, absolutely the same value cannot be attributed to them; rather, their very value depends upon the use to which the things are destined by the possessor, so that it varies according to the degree of necessity or utility which belongs to that use. Therefore a certain first portion is aptly distinguished, of the highest value, by which provision is made for the necessities of life; a second, already of lesser price, which suffices for almost necessary or very useful expenses; and so forth, so that this rule can be established: portions of incomes are worth so much less to the possessor, the more they have surpassed a certain quantity. But if you compare the differences themselves with one another, you will perceive without difficulty that the earlier functions are farther apart from one another in value than the later ones. For while the difference between a necessary and a useful destination is very notable, there is already less difference between greater and lesser utility, and almost none among several destinations pertaining to pleasure.

If, therefore, you constitute a tax in such a way that you take away the same portion—for example, 7/100—from all portions of proceeds, you will have despoiled the possessor unequally. But in order that equality be preserved, after the sum by which citizens are sustained—the Existenzminimum [subsistence minimum]—has been relieved insofar as this can be done, the proportional shares to be contributed in common must then be increased according to a progression which is not constant, but whose increments decrease and become almost nothing. This method, however, is that which was proposed here in our conclusion under letter c.

Argument 2, which we merely indicate:

The perfect method is that each person pay according to his own resources or means. This, moreover, is approved by most. But the resources or means of each person are riches considered not simply, but with their functions observed.

Therefore. The perfect method is obtained by distinguishing among the various functions of incomes.

112. III. Difficulties.

1. Each individual must pay the price of the benefits which he has received from the State.⁹ But. They do not pay that price unless portions of taxes uniformly correspond to portions of proceeds.

⁹ “It is a question for the State of recovering from each of the citizens the just price of services rendered.” Leroy-Beaulieu, p. 160.

Reply. I deny the major. The adversaries themselves deny that the merits of the commonwealth are compensated through taxes. Cf. above. I deny the minor. Cf. the things just said in proof III.1.b.α.

2. Only the system of equal proportion rests upon a certain principle, while progression is destitute of every rule. And since there is no source from which the method of progression to be introduced can be defined, one method after another is rashly and imprudently proposed for adoption.¹⁰

¹⁰ “Proportionality is a principle, but progression is only an odious arbitrariness.” Thiers, De la propriété [On Property], ch. 3.

Reply. I divide the antecedent. I distinguish the first part. The system of equal proportion rests upon a principle which is certain and true, I deny; certain but false, I concede.

I distinguish the other part. If the progression increases by a constant law, I concede; if it is such as we understand it, I deny.

You insist. Not even if understood as in the conclusion can that method be prudently defined. For it would be necessary to compare the various functions with one another and to assess by how much one is to be preferred to another, which no one has dared to undertake.

Reply. I deny the subsumed minor and I deny the rationale. For if taxation is made in the manner explained in the proof, it is plainly apparent that this assessment is not made rashly. We indeed admit that it cannot be defined whether the degree or function which is called necessity surpasses the degree of utility by two portions or by three; but if, guarding against every excess, you strive toward this, that you exact taxes from the less useful portion rather than from the almost necessary portion, and if you observe the other rules which were declared in the proof, a prudent manner of aptly ordering taxes will already be at hand for you.

What of the fact that not a few of the supporters of the first system now wish either some portion of proceeds to be relieved of every burden or to be burdened less than others, and yet they do not think that they define anything rashly?¹¹

¹¹ “We do not admit that incomes of every origin and of different duration should pay the same proportional share.” Leroy-Beaulieu, op. cit., p. 152, note.

3. If the progression is moderate, it benefits the people almost nothing.¹²

¹² By Leroy-Beaulieu, after Proudhon, progression is called “a democratic toy.”

Reply. I deny, if you observe that relief of even several francs is already welcome to those who possess modest resources. Cf. below, no. 120.5.

Besides, if it benefits the people nothing, why do the adversaries themselves concede that the burden to be paid should be partly relieved for many?

4. The proposed system is ineffective. For it by no means prevents the wealthier from bearing a lighter burden than the poorer.

Reply. I deny the antecedent; and to the proof, I distinguish. It by no means prevents this, that is, it does not procure equality to the degree that justice wills and permits, I deny; that is, it does not bring it about that the burden is felt no more by a man of modest resources than by a wealthy man, I pass over or concede; but I deny the supposition that this is to be effected.

For the true consideration—unless you again wish to correct differences of fortune through taxes—is this: that social inequalities not be aggravated by the distribution of taxes, and therefore that the fact that some feel the burden more than others be attributed only to the antecedent inequality and in no way to the method of distribution. This, however, is had by equating citizens with respect to similar functions of goods.

5. The functions or uses of proceeds depend very greatly upon the will of the owner. Therefore. A just distribution of taxes cannot rest upon their definition.

Reply. Here, as we are often accustomed in moral matters, we observe what of itself—that is, for the most part—comes into use.