ABSTRACT OF PAPER
Title: Views on progressive taxation in Spanish economists in the 19th century
Author: San Julian Arrupe Javier
Liberal economists in the 19th century rejected progressivity in general as an unfair technique of taxation, as it was widely believed that graduated tax rates betrayed Adam Smith's first maxim of taxation. However, the expansion of the ability to pay approach to taxation in the central decades of the century, particularly since the diffusion of J.S. Mill's Principles, led economists to reconsider the possibility of establishing graduated taxes as way to attain a fairer system through which citizenship contributed to the common effort of the state. This might satisfy those supporting proportionality as the right technique of taxation (progressive rates in some taxes could redress a supposedly general regressivity of the tax system caused by the noticeable presence of indirect taxation, particularly consumption taxes), and also those defending that proportionality could not be a fair system of allocation tax burden, as marginal utility of money diminished. Spanish economists were not alien to this general discussion. This paper explores the evolution of their positions on the debate on progressive taxation. Despite the fact that there were some exceptions, the majority of Spanish economists in the central decades of the century leant to proportionality as the right and just technique for taxation. Progressivity was deemed unfair, arbitrary, confiscatory, and a socialist tool to equalize fortunes, which was not the attribution of the state. However, as the century approached its end, some economists slowly changed their positions, leaning to a partial acceptation of graduation as a suitable practice for taxation, on behalf of a better application of the principle of fair taxation. This shift was led not by academic economists, but by economists involved in politics more prone to adopt less rigid positions in this debate, and more concerned for the political side of the matter.
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