The mirage of mark-to-market: distributive justice and alternatives to capital taxation

Delmotte, Charles and Cowen, Nick (2020) The mirage of mark-to-market: distributive justice and alternatives to capital taxation. Critical Review of International Social and Political Philosophy . ISSN 1369-8230

Full content URL:

The mirage of mark-to-market: distributive justice and alternatives to capital taxation
Published PDF

Request a copy
[img] PDF
The mirage of mark to market distributive justice and alternatives to capital taxation.pdf - Whole Document
Restricted to Repository staff only
Available under License Creative Commons Attribution 4.0 International.

Item Type:Article
Item Status:Live Archive


Substantially increased wealth inequality across the developed world has prompted many philosophers, economists and legal theorists to support comprehensive taxes on all forms of wealth. Proposals include levying taxes on the basis of total wealth, or alternatively the change in the value of capital holdings measured from year-to-year. This contrasts with most existing policies that tax capital assets at the point they are transferred from one beneficiary to another through sale or gifts. Are these tax reforms likely to meet their aims of greater economic and political equality? We argue that these policies are likely to fail because, following neoclassical economic theory, they are based on a conception of capital as possessing given values in what amounts to a static equilibrium. This mischaracterizes the dynamic and subjective character of market economies and the contested value of real instantiations of capital goods. This makes them very difficult, often impossible, to value apart from at the point of voluntary transfer or profit realization. This means most taxes levied on a mark-to-market basis will be arbitrary and unfair. We propose alternative policies based on an income realization approach to taxation that are more likely to curb excessive wealth holdings. This includes introducing international treaties that prohibit preferential tax treatment for individual companies and specific sectors, and broadening the income tax base to include the imputed rent of personal housing wealth.

Keywords:Wealth inequality, capital taxation, tax base, distributive justice, Free Market Economy
Subjects:V Historical and Philosophical studies > V540 Social Philosophy
L Social studies > L150 Political Economics
L Social studies > L430 Public Policy
Divisions:College of Social Science > School of Social & Political Sciences
ID Code:36572
Deposited On:02 Aug 2019 13:12

Repository Staff Only: item control page