Book symposium: Liam Murphy and Thomas Nagel, The Myth of Ownership: Taxes and Justice

Abstract

The distribution of pretax income lacks moral significance, rendering traditional appeals to vertical and horizontal equity in taxation fundamentally misguided. Justice in taxation is not an independent moral issue but must be integrated into the evaluation of a complete system of economic and legal institutions. These institutions are judged by their ability to secure political values such as liberty, welfare, and equality. The assumption that pretax income serves as a morally relevant baseline for assessing tax burdens is logically untenable because pretax income is itself a product of a legal and state apparatus that necessitates taxation. Therefore, individuals cannot have a natural property right to the whole of their pretax income. A just tax scheme is simply one that belongs to an overall just economic system. Consequently, debates over the fairness of progressive or flat taxes relative to pretax earnings are conceptually flawed. The design of tax policy—including the selection of a tax base and rate structures—should instead be treated as an instrumental question of how to best achieve desired social outcomes. This shift requires moving beyond the unreflective belief in the moral reality of pretax holdings and focusing on the empirical effects of the tax system on the broader social and economic order. – AI-generated abstract.