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The Moral Rationale for International Fiscal Law

Published online by Cambridge University Press:  28 September 2012

Alexander W. Cappelen
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Abstract

A country's right to levy taxes is a fundamental aspect of its sovereignty. Without the power to tax, a government would be unable to redistribute resources among its citizens and provide public goods. The question of how tax rights should be distributed is therefore one of the oldest and most important problems of tax theory. Increased international economic integration has made this question even more important, as a larger share of economic transactions take place across national borders, giving rise to situations in which more than one country is able to tax the same base.

How such conflicts are resolved affects both the ability of countries to redistribute resources domestically and the international distribution of tax revenues. The allocation of tax rights therefore raises important questions of distributive justice, questions that require a normative theory of the right to tax. This essay seeks to evaluate the current distribution of tax rights by examining whether it can in fact be justified within the main approaches to distributive justice.

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Articles
Information
Ethics & International Affairs , Volume 15 , Issue 1 , March 2001 , pp. 97 - 110
Copyright
Copyright © Carnegie Council for Ethics in International Affairs 2001

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References

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8 These principles only provide a limitation of the conceivable connecting factors, and such limiting factors do not necessarily prevent international double taxation. Even when such limitations on the connecting factors exist, there might still be more than one jurisdiction with such connecting factorsGoogle Scholar.

9 These are principles for taxation of income. Analogous principles for commodity taxation are the principle of destination (i.e., the country that imports a commodity has the right to tax it) and the principle of origin (i.e., the country that exports the commodity has the right to tax it). See Biehl, “A Taxonomy of International Taxation Principles,” for a general taxonomyGoogle Scholar.

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