The rise of inequality and the fall of tax equity: A call for a non-ideal distributive tax theory

Scholars have had limited success in connecting tax scholarship to economic and political philosophy theories of redistribution. This article argues that the literature of political philosophy and of public finance on taxation, which are typically ideal theories, include major intellectual payoffs, but also significant blind spots. It further explains why these blind spots have led to a disconnect between current tax policy dilemmas and major redistributive debates. The article explains why addressing some of the currently ignored issues may generate richer theories and better redistributive tax policies. It concludes by arguing that a non-ideal normative redistributive theory can provide a bridge between normative distributive agendas and tax scholarship. “We view the Gap between optimal capital tax theory and practice as one of the most important failures of modern public economics.”¹ “[Taxes are] the most important instrument by which the political system puts into practice a conception of economic or distributive justice…[yet questions about taxes] have generated less sophisticated discussion from a moral point of view than other public questions that have moral dimensions.”².