Tax justice

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The control fairness is a key principle of the tax law , and more specifically expression of constitutionally guaranteed equality in accordance with Art. 3 , para. 1 GG .

Historical bases

In order to finance its diverse tasks , a modern state needs income , which is essentially achieved through the taxation of its citizens. Even in ancient times, the respective authorities demanded taxes. As early as 1776, the economist Adam Smith was of the opinion that the citizens of every state should "contribute to the upkeep of the government as closely as possible in proportion to their respective abilities" and was thus considered the first advocate of tax justice. In his book The Wealth of Nations in 1776, he warned against tax evasion if the owners of movable capital "bring their wealth to some other country" when taxes are high. He presented herein, the taxation principles of uniformity ( English equality ), determination ( english certainty ), convenience ( English convenience ) and equity ( English economy ) on.

The Prussian finance minister Johannes von Miquel developed a modern income tax system in 1891 . Due to the introduction of a general tax declaration requirement and progressive taxation, it served as a model for other German countries. In a democratic community, the taxation principles must be disclosed because of the legitimation problem, since the enforcement and practical implementation of general taxation rules is closely linked to the acceptance of tax laws by the citizen. This in turn affects tax equity and the associated tax effects on income.

Principle of equality of taxation

The tax fairness demands that the tax on the economic capacity of the taxpayer oriented ( ability to pay principle ) and that it is designed internally consistent ( consistency principle ).

As a fundamental taxation principle, it is an indispensable part of the tax system . Also under the aspect of the acceptance of the respective taxation, the fairest possible distribution of the tax burden is necessary. A tax system that is at the mercy of social interest groups is seen by the citizens as unjust and exploited for their own benefit. Opportunities to avoid taxes can seriously disrupt the sense of justice with the threat of income generation (migration abroad).

As a measure of the tax burden, the individual economic performance depends on the economic position of the taxpayer. A distinction is made between:

  • Horizontal tax equity:
    Taxpayers with the same ability to pay are also taxed at the same rate
  • Vertical tax justice:
    Taxpayers with unequal capacity also have to be taxed differently

This poses three problems:

  • How should performance be measured (indicator problem)?
  • How should the tax rate be designed?
  • How should the justice postulate be implemented in tax laws ?

Income , consumption and, to a certain extent, wealth are considered indicators of performance . The income tax and the corporate income tax the income, the tax on consumption, the inheritance tax and the wealth tax assets. This raises the question of the relationship between direct and indirect taxes .

Problems arise with the limitation of taxable income. According to the net wealth access theory , all income and increases in value or increases in assets should be taxed between two reference dates. According to the source theory , only regular income should be taxed.

Furthermore, the so-called victim theory was developed, which assumes a decreasing marginal utility of income. Marginal utility: The more money an individual has, the lower the utility of the individual euro. Compare e.g. B. a person who has to survive a whole month with 100 euros with a person who has 10,000 euros a month. With the former, the benefit of every single euro is great, with the latter, one euro more or less does not matter. However, the victim theory is not understood as a clear and conclusive concept for the design of vertical performance.

Self-employed and non-self-employed

A special case is the implementation of the principle of equality of taxation in the taxation of income from self-employment on the one hand and income from employment on the other.

The net income of a self-employed person represents, on the one hand, the remuneration for the entrepreneurial risk that he has taken, as well as a return for the capital that he has invested and, if applicable, the remuneration for his personal commitment. Instead, he could also offer his work force on the labor market and receive income from employment. In this context, the question arises whether the two types of income should be taxed equally.

If a tax system provides benefits for the self-employed, this can be an incentive to seek self-employment. The result could be start-ups of smaller companies and “subcontracting” companies. On the other hand, a significantly higher taxation of income from self-employed work can force the productive forces into employment. In addition to only marginally higher, equally high or even lower income from self-employed work, the factor of risk aversion to job loss increases proportionally and leads to a higher individual assessment of the employment relationship compared to self-employment.

Assuming the same taxation of self-employed and non-self-employed work, i.e. the same x and at least or , there is a proportionally higher net income from self-employed work compared to the net income from non-self-employed work. Capital income is neglected for comparability.

  • = Net income from self-employed work
  • = Net income from employment
  • = fictitious reward for entrepreneurship
  • = notional interest rate for equity / compensation for interest payments for debt
  • = Wages for work
  • = Tax rates
  • = Reservation limit

If an individual has to decide whether he wants to receive income from self-employed work or from non-self-employed work, this cannot be assessed objectively on the basis of the individual reservation limit and the individual assessment of income security.

It should be noted, however, that with a lower , i.e. tax relief for income from self-employed work, proportionally greater than and the probability that the reservation limit will be exceeded with more individuals, proportionally greater. On the other hand, it also becomes clear that a high tax rate pushes the individual directly into employment. In addition to only marginally higher, equal or even lower income , the factor of risk aversion before job loss also increases proportionally, and allows the individual to rate the employment relationship even higher, i.e. shift it upwards.

Minimum requirements

In Germany, the following minimum requirements for determining the taxable capacity have emerged through the case law of the Federal Constitutional Court :

  • Exemption from taxes on the subsistence level :
    After taxation, the taxpayer must have enough money left for a decent life. The social assistance rate for the needy is used as the lower limit of this minimum requirement .
  • Family tax justice:
    The statutory maintenance obligation towards relatives must be taken into account.
  • Social tax justice:
    Incentives for economic independence, saving and property building. However, if the tax progression is too sharp with the aim of redistribution, the service may not be “punished” so severely that service providers migrate abroad.


Individual evidence

  1. Jump up ↑ Adam Smith, The Prosperity of the Nations , 1776, Book 5, Chapter 26
  2. BVerfG, decision of February 22, 1984, Az. 1 BvL 10/80, BVerfGE 66, 214 , 223.
  3. Federal Statistical Office : Wage and Income Tax Statistics 2001
  4. Income 2001 , calculation of redistribution through taxes