This policy brief considers the concept of tax justice or fairness in relation to each of these broad goals: the collection of revenues to finance public expenditures, the regulation of social and economic behaviour, and the distribution of economic resources.
The new social contract aims to establish a society in which individuals can live meaningful lives. While the state enjoys the outcome of citizens’ responsible acts it has a duty to create the necessary conditions for such actions, and in so doing to close social and economic gaps between families and individuals alike.
Inheritance taxes have rarely ever contributed more than two per cent to the budget of any modern state. Nevertheless, in the twentieth and early twenty-first centuries some of the most vocal conflicts over taxation took place over inheritance taxes. This holds true for the United States as well as for many European countries. In the United States, estate taxation has been a topic of controversial political debate and will remain on the political agenda, at least until a decision has been made on what will happen to the tax after 2010.
‘Loyalty benefits’ are transfer payments designed to motivate or reward citizens for serving the state, either tangibly or symbolically. Classic examples are benefits to soldiers and civil servants, and today, special benefits granted to political refugees.
But like the trademark social insurance schemes invented by conservative welfare states, loyalty benefits may also be used as a way of reinforcing status barriers between groups, including ethnic hierarchies embodied in the collective identity projects of states.