by Pascal Salin
Cheltenham, UK: Edward Elgar, 2020, 224 pp.
Jörg Guido Hülsmann ([email protected]) is Professor of Economics at the University of Angers.
Pascal Salin is one of the most important Continental European economists. Throughout his career, he has developed and defended the principles of a free society against the encroachments of the state. He started off as a Friedmanite in the 1960s and then turned ever more Austrian through his personal encounters with Friedrich von Hayek in the 1970s, which led him to discover and appreciate the works of Ludwig von Mises, Murray Rothbard, and Israel Kirzner. He is the author of about two dozen books. His main research fields have been competition, international monetary economics, international trade, macroeconomics, and public economics. He has also become well known as a champion of Austro-libertarianism, especially through his treatise Libéralisme (2000).
Even though Professor Salin is very prolific, most of his writings have been published in his native French. The book under review is therefore very welcome, being the first English edition of a text that has been published in several French editions starting in 1985. It was first published under the title L’arbitraire fiscale and then, in 2014, under the current title, La tyrannie fiscale. It has also been translated into Italian and other languages. The book has 206 pages, is organised into 12 chapters, and comes with a 7-page index.
Tax Tyranny is an essay on the principles of taxation. It is written in a non-technical way and accessible to a broad readership. It serves very well as an introductory text for undergraduates, most notably in macroeconomics or public economics, but it also carries a lot of original food for thought that deserve the attention of scholars and tax practitioners. The central thesis is that there are no rational grounds for taxation and taxation can therefore never be justified. By its very nature, the tax state can never be a just state. When it taxes its citizens, it is willy-nilly arbitrary and tyrannical.
Professor Salin starts off highlighting the destructive nature of taxes and then walks through the various arguments designed to present proportional taxation (“flat tax”) and even more so progressive taxation of incomes and savings as a matter of distributive justice. Because these justifications do not withstand scrutiny, chapter 2 carries the title “The myth of progressive taxation.” Salin argues that the principle of equality before the law is irreconcilable with proportional and progressive taxation. The core of his argument is that it is impossible to objectively assess the real income and real wealth of each citizen. Incomes and wealth have various personal dimensions which cannot be readily translated into monetary terms. As a consequence, when the state sets out to tax the citizens by relying only on their monetary income, respectively on the monetary expression of their wealth, it deals with the citizens not on equal terms, but creates privileges for some and disadvantages for others. This leads him to a radical conclusion: “The choice of income or wealth as a tax base does not correspond to any criterion of rationality or justice. It is as arbitrary as would be a modulation of the tax according to t
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