point
1. Taxation and Private Property
In modern state, taxation and private property are like the two sides of a coin. It is even appropriate to say that the tax system is the means to safeguard private property1. In other words, the fiscal system of a constitutional polity that acknowledges private property has to be a financial revenue system (the system of a tax state) centering on taxation in order to stay in line with historical evolution.
2. The Power to Tax as symbol of Modern State Sovereignty
When viewing the functioning of the tax state system from the ruler’s angle, i.e., the various fiscal measures of a state with the power to tax as the center, the power to tax is not only the symbol of state authority but also becomes a major approach of the state to intervene in the life of private citizens and establish different relations with the people.
Simultaneously, the power to tax also becomes the most potential influence on the life
1 Refer to [Endo] Taxation and Private Property for the outline. For the relation between constitutional protection and taxation, see [Lan](2007)
of the people.
3. taxpayers-centered idea in the protection of basic rights
The basic rights are the objects of protection of constitution. People, as the subjects of basic rights, are naturally the focus in terms of constitutional jurisprudence. By the same principle, in the realm of fiscal constitution, the direction of the core issue therefore has to be the protection of basic rights focusing on taxpayers.1
In terms of constitution in its modern sense, however, tax power can easily be regarded as a violation of people’s basic rights when seeking absolute enforcement of their constitutional protection. In other words, how to restrain tax power with constitutionally recognized values, so as to ensure the protection of basic rights has always been a rudimentary question in terms of fiscal constitution in a modern state. However, when exercising such restraint, we find certain degree of detachment is at the same time created between regulations and the reality aims to be regulated. Reasons are developed more explicitly as follows:
i. First of all, a certain contradictory relation arises between state’s tax power and people’ property right.
Tax imposition on its people1 in a modern state is actually a prerequisite for the people’s freedom to have property and the foundation of private property. Without taxes financing state’s public services, basic subsistence for people is deprived. When evaluating the approaches of a state’s power to tax, taxpayers may realize a certain part of their income becomes out of their disposal and thus ascribe the blame to taxation.
Such ascription representing taxpayers’ mentality is particularly noticeable in modern society partly because of money being the principal medium in business transactions.
Once people are unable to fulfill their needs by consumption (or usufruct) of property, they attribute to the loss of their property. And the most influential factor resulting in the diminishing of property is state’s taxation. Consequently, it is state’s tax power taking away people’s money that leads to decrease in money and one’s inability to fulfill one’s needs. In the end, a violation of their freedom or right to fulfill oneself due to one’s property being taken away from the state is to be perceived.
1 The term taxation here refers to a modern nation’s imposition of taxes on the results of the people’s profitable activities in order to pay for public needs. See §3 Abs.1 of Abgabenordnung (AO) (General Tax Code of Germany) for concrete legal definition. For Chinese translation, refer to the German General Tax Code, translated by Chen Min (陳敏), Training Institute, Ministry of Finance. For legal discussion on differences between taxation and state revenues of other nations, see [Fuke] (2006).
Even more seriously, when their disposable property increases as a result of tax reduction or exemption or inapplicability of tax imposition in some special situations, taxpayers may conveniently interpret it as a concession of tax power to the property right. Thus, in the minds of the people, especially taxpayers, thinking of the decrease in their disposable property, a contradictory or conflicting mentality engenders against tax power.
Here, we assume that such psychological factor has invisibly contributed to tax power and property right in contradictory positions. Therefore, the research on the emergence of such contradictory relation is necessary in terms of discussions on the limits of taxation.
ii. Secondly, a gap appears between the will of the ruling agency and the legitimacy of taxation.
Judging from historical evolution, we found that the development of the concepts of human rights in the West was the consequence of suppression – an ideology that gradually took shape after resisting and overthrowing the rulers over and again. In other words, the formation of the concept of rights was the reaction of the ruled towards the
repression from the rulers1, and the ruler’s unreasonable taxes were often recognized in the main source of this repression.
However, when judging from the constitutional legitimacy of people’s obligation to pay taxes as a result of justification of taxation in modern state (lack of justifiability means no tax payment), it no longer seems right to call what taxpayers oppose to suppression.
Thus, the constitutional justifiability in limiting the state’s power to tax to ensure the rights of the people can no longer exist since the inherent “reactionary character” of rights has lost its theoretical basis. Subsequently, how to establish the relation between the bases of the justifiability of the will of the state, which represents the power to tax, and the constitutional justifiability of the people’s tax obligation becomes a theoretical gap in urgent need of reparation.
This gap, the way this paper sees it, has been the result of the thinking logic under the influence of western human rights concepts; therefore, the so-called “reparation” calls for understanding from western thinking approaches in order to have any meaning (or produce the desired result.) As for whether the views or approaches of this reparation can be adopted or conform to the sense of value in traditional Chinese societies,
1 Some might consider this to be the “right to disobedience.”
examination from the angle of “comparative law” may be required.
4. Disparities between Chinese and Western Perspectives—the theoretical Anschauung and positioning of this paper
The debate in the meeting did not seem to generate any decisive influence on formulation of government policies. While Schumpeter was appointed the minister of finance soon after the release of Crisis and had the opportunity to pursue his ideal, the fiscal plans he proposed, however, did not win majority support and fell apart within a very short time.1 The following development of Discourse was not any better.
Furthermore, although the salt and iron meeting concluded with adoption of Literati et al’s views2 and Sang Hong-yang was executed for his involvement in an unsuccessful coup in the following year, Huo Guang(霍光), who took over power after Sang, followed most of Sang’s financial policies. The policies did not die because of Sang’s decease and Huo never adopted LITERATI ET AL’s opinions.
Theoretical intention of the paper—adaptation and revision
1 For summaries of related discussion, see Swedberg, R. in: Schumpeter (1945), Capitalism, Socialism, and Democracy, 4th ed.
2 In July 81 BC, the emperor released a decree to abolish the alcohol monopoly by the state and iron
The above shows that a theory may seem viable or is indeed applicable in reality, but in the end it might still be brushed aside. A theory may be established to solve practical problems, still whether it is implemented or how well it is executed should not be the basis for judging its quality. 1
Basically, we believe whether a theory is feasible has nothing to do whether the theory is complete. Whether a theory can be applied in practice often requires appropriate transformation to adapt it to the specific time and place2, whereas whether its structure is complete, depending on the compactness of the theory and continuous logical verification to locate unreasonable parts and revise them, does not necessarily touch upon practical questions such as viability.
Positioning of the Paper – “Revision of Theory” as the Primary Objective and
“Adaptation of Theory” as the Secondary Objective
1 Here this paper intends to bring in the comparison between the basic arguments of teleology and deontology from the Ethics. For comparison between several other groups of similar concepts, a few ideas related to the exposition of this paper are also listed: the “efficiency” and “fairness” from economics, the
“should do” and “should profit” principles of taxation from public finance, the principle of proportionality and principle of equality from tax law, the concept of freedom and the concept of equality in human rights, etc. Concrete arguments will be elaborated further on in this paper.
2 Certainly, whether a theory is accepted by others or not, as long as it cannot be adapted through transformation fro feasibility, there is no point in citing that theory. This explanation is related to description of adoption of Western legal systems further on in this paper.
In positioning, this paper first acknowledges the necessity of distinguishing theory and practice in study and then places the emphasis on descriptive and attempted establishment of a theory. The practical aspects may be subject to the possible revision in the future.