The Civic Function of Taxation

There is a deeply embedded idea in tax scholarship and tax policy debates that taxes, ultimately, are merely instrumental. Reuven Avi-Yonah for instance has suggested that taxes have three goals. They raise revenue, they redistribute wealth and they regulate. But there are alternative accounts, one of which views taxation as an expression of one’s membership in a political community. If one accepts this latter function, what follows are profound consequences for how we understand the tax system.

This paper make three claims. The first is that taxation serves a plurality of functions, which each have different underlying interests. The second is that, at different times with respect to different taxes and the design of tax system, these can be intertwined but also in tension with each other. The third is that the civic function of taxation makes various, at times unpopular, demands of the tax system, which may cut against the other functions of tax. Because it mandates that people should explicitly engage with the tax system, it means that taxes should be “seen” and not simply incorporated into transactions or taken out of the view of the taxpayer. As a result of these unpopular demands, the article suggests that the task for modern States is to champion the civic function without being pinned down to either its contours or content.

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