Justice-based Reasons for a Progressive Consumption Tax

Abstract

In those economies where the market regulates the cost of goods and services, prices unevenly impact people depending on their socioeconomic position. This means that, even if two agents choose to consume the same products, that decision will differently affect each one of them and, as a result, what in one case could seem like a responsible option, would appear reckless in another. Rawls’s A Theory of Justice suggests that, when this is caused by morally arbitrary factors, like our social origin or natural abilities, people being differentially responsible for the same decisions constitutes an unjust form of inequality. The proportional taxation of consumption through fiscal figures like the VAT contributes to that inequality. Even though sometimes public authorities develop policies that intend to counterbalance the regressive effects of this kind of taxes, they tend to do so in terms that point to the least advantaged as in need of state tutorship to adequately prioritise their interests. This article argues that making consumption taxation progressive would allow us to tackle unfair distributive inequalities emerging from our differential responsibility against the cost of living and that, in addition, it would help eliminate the status hierarchies that poverty-oriented public policies often entrench.