Joseph J. Thorndike and Dennis J. Ventry JR., eds., Tax Justice: the Ongoing Debate.
The editors of this book update and build on the classic 1953 work, The Uneasy Case for Progressive Taxation, by Walter J. Blum and Harry Kalven, Jr. This new book, Tax Justice: The Ongoing Debate, brings together a collection of writings by nine leading tax scholars who describe the primary theories of tax equity that serve as a basis for contemporary policy debates. The historical contexts for different types of tax equity arguments (horizontal and vertical equity, as well as distributive justice) are presented, along with the arguments for different tax bases and rate structures. The editors' selection of essays creates a compelling argument for focusing tax policy debates on equity issues.
Tax Justice: The Ongoing Debate begins with a chapter by Richard A. Musgrave, who describes the pros and cons of benefit taxation and ability to pay as the two major approaches generally used to establish tax equity. He assesses proposals for a flat tax and the unlimited savings allowance tax. Although he recognizes the attraction of moving to a consumption base, he suggests it is wiser to improve the income base of the federal tax. He suggests the equal worth of individuals provides a basis for progressive taxation. Musgrave (p. 17) states that this basis "might be called good manners in a democratic society." However, he acknowledges the difficulties of maintaining a progressive tax system in the presence of forces for globalization.
The next three chapters provide historical perspectives on arguments for tax equity. Dennis J. Ventry, Jr. describes how, after World War II, economists shifted their focus from vertical equity to efficiency and economic growth. This shift moved economic theory away from the American public's expressed primary concern that the federal tax system be equitable.
Another chapter, by W. Elliot Brownlee, explores the history of taxing wealthy Americans. He describes how little we actually know about the relationship between economic behavior and the tax burden of the wealthy. Brownlee notes that, despite increasing taxes on the wealthy in the twentieth century, there have been substantial productivity gains. Carolyn C. Jones then explores how Protestant churches have debated the relationship between Christian ethics and taxation. She describes how law, economics, and religion all intersect when tax policy is discussed.
The remaining five chapters examine current issues confronting the tax system. Daniel Shaviro explores the imperfections of income, consumption, and wealth as measures of the inequality of individuals. Barbara Fried then unravels the arguments that have been made for proportionate tax systems. She discusses the limitations of the libertarian view that sees a minimal role for government and the arguments surrounding the difficulty of pricing public goods. David Brunori describes how state and local governments frequently and unnecessarily create regressive tax systems because of concerns over household and capital mobility. Joan M. Youngman examines problems that are often presented in discussing the fairness of property taxes. She carefully examines arguments based on the technical and administrative difficulties of the property tax system, as well as arguments that property taxes undermine property rights. In the final chapter, C. Eugene Steuerle acknowledges the incredible complexities within the tax system and argues for economists, using careful analysis, to develop workable approaches to create tax justice.
This book could be used for supplemental readings in a tax course that has the objective of exploring tax policy and equity issues. It also would be a useful addition to the personal reference libraries of tax faculty. Another useful aspect of this book stems from the authors' suggestions of areas where additional tax research is needed.
ANNE L. CHRISTENSEN
Montana State University--Bozeman