Redistributive Taxation and Social Contract Theory

The Spring 2021 FC Talks series presents Charles Delmotte.

Charles Delmotte is a Postdoctoral Fellow at the NYU School of Law’s Classical Liberal Institute. His research uses methods from political philosophy and insights from political economy to analyze tax policy. He has conducted research at the Department of Political Economy at King’s College London, at the Max Planck Institute for Tax Law and Public Economics (Munich), and here at the Freedom Center, and we are happy to welcome him back.

The distributive justice literature has recently formulated several tax proposals, with limitarians or property-owning democrats proposing new or higher taxes on wealth or capital income intended to decrease the growing wealth gap. In this talk, I ask what a genuine “contractarian” response to inequality and redistributive taxation would be. I will argue that contractarianism generates a “benefit principle for public policy”; that is, specific rules and institutions are acceptable to the extent that they create benefits for all individuals in society or at least don’t make anyone worse off. This benefit principle grounds a middle stance between egalitarian traditions that eschew economic inequality and target accumulation of capital as such and “everyday libertarianism,” which has been said to justify the unequal returns that capitalist societies produce. Moreover, I argue that the benefit principle opposes wealth accumulation to the extent that wealth was generated through rent-seeking—i.e., that income unrelated to economic productivity, which is not embedded in mutually beneficial exchanges. I maintain, however, that ruling out rent-seeking requires not ex post taxation, but primarily a more “pre-distributive corrective policy,” i.e., reconfiguration of market institutions to prevent wealth accumulation through rent-seeking in the first place. The contractarian response is, thus, not to tackle inequality as such but to reform the market to promote the occurrence of mutually beneficial exchange.

This talk will be hosted on Zoom by Lucy Schwarz. Please contact Lucy for details if you are interested in attending or if you wish to be added to our listserv.

Event Contacts
Lucy Schwarz