Taxation, the Private Law, and Distributive Justice

We argue that for theorists with a post-institutional conception of property, e.g., Rawlsians, there is no principled reason to limit the domain of distributive justice to tax and transfer-both tax policy and the rules of the private law are constructed in service to distributive aims. Such theorists cannot maintain a strong commitment to a normative conception of private law independent of their overarching distributive principles. In contrast, theorists with a pre-institutional conception of property can derive the private law from sectors of morality independent of distributive justice. Nevertheless, we argue, this does not entail that the private law, for pre-institutional theorists, must be sanitized of equity-oriented values. In making our case, we consider the claim of law-and-economics scholars Louis Kaplow and Steven Shavell: that income taxation is always more efficient than other legal rules in accomplishing equity-oriented ends. We argue that Kaplow and Shavell's claim cannot be understood to apply to our argument, since their claim assumes the existence of an underlying system of property ownership and markets. Our discussion, however, is addressed to the very structure of such a system of property rules: the question of whether equity-oriented values are best met through tax and transfer, or partially through basic property rules. We conclude that non-libertarian pre-institutional theorists holding principled commitments to equity-oriented values are free to invoke either tax and transfer or the rules of the private law to attain them