The Myth of Ownership

This is the first book to discuss tax policy in depth from the standpoint of contemporary moral and political philosophy. In a capitalist economy, taxes are not just a method of payment for government and public services; they are also the most important instrument by which the political system puts into practice a conception of economic or distributive justice. Yet little has been done to bring together the rich philosophical discussions of justice of recent times with the complex debates about tax policy that go on in practical politics, in economics and in law. By closing this interdisciplinary gap, Liam Murphy and Thomas Nagel have enlarged the scope of both philosophy and tax policy analysis. Their main thesis is that the most common way of thinking about the fairness of taxes - through the distribution of tax burdens relative to taxpayers'pretax income or wealth - is a mistake. In taxation, government doesn't take from people what they already own. Private property is a legal convention, defined in part by the tax system; so the tax system cannot be evaluated by looking at its impact on private property, conceived as something that has independent existence and validity.
On the contrary, taxes and the government they support create legal property rights in after-tax income and wealth. Standards of justice must be applied, not to the distribution of tax burdens, but to the operation and results of the entire system of economic institutions. The book discusses prominent issues like the estate tax, redistribution, progressive versus "flat" taxes, and whether the tax base should be consumption or income. It explain the most important theories of justice and their implications for tax policy. The Myth of Ownership enters directly into the fierce contemporary political debate over taxes and justice.