Ethical Obligations of Wealthy People: Progressive Taxation and the Financial Crisis

Abstract

The Financial Crisis in Europe puts pressure on welfare states and its tax systems as well as on considerations of social justice. In this paper, we would like to explore the status of the idea of progressive taxation and its justification (especially the ‘ability-to-pay’ principle) in times of a financial crisis. We will discuss it within a social justice framework following David Miller—using the principles of (i) need, (ii) merit, and (iii) equality. We will conclude that progressive taxation can be justified in the light of these three principles, even more so in the situation of a financial crisis that undermines decent living conditions for millions. The principle of need has to be given priority even if this move violates the principles of equality and desert.

Keywords:

• Progressive Taxation
• Social Justice
• Crisis
• David Miller

Additional information

Notes on contributors

Helmut P. Gaisbauer

Dr Helmut P. Gaisbauer is Senior Scientist at the CEPR, University of Salzburg with a current research focus on tax ethics and poverty alleviation

Gottfried Schweiger

Dr Gottfried Schweiger is Senior Scientist at the CEPR, University of Salzburg with a research focus on social justice and tax ethics

Clemens Sedmak

Clemens Sedmak is F.D. Maurice Professor of Moral and Social Theology, King's College London, Head of the CEPR, University of Salzburg, President of the International Research Centre for Social Ethics, Salzburg. At the CEPR his research focuses on tax ethics, social ethics and poverty, local knowledge and poverty alleviation