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Taxation, the State and Society

The Fiscal Sociology of Interventionist Democracy


Marc Leroy

This book investigates the relationship between taxation, the State and society in democracy. Fiscal sociology is a broad social science in terms of its disciplines: law, economics, sociology, political science, management, economics, psychology etc. are mobilized. Fiscal sociology is general because it tackles a wide range of problems: genesis, development and crisis of the State, policy factors (ideas, institutions, division of left and right, lobbying etc.), vote-catching of the ruling elite, resilience of the welfare State, neo-liberal ideology of market efficiency, impact of capitalist globalization, democratic political choices and constraints on the functions of the interventionist State etc. It is empirical in terms of understanding the financing of public action: social division of society by the tax policy, growth of public expenditure, bureaucratic labelling of the tax deviance, budget performance, rationality of taxpayers, complex rules etc. It analyses the incoherence of a societal regulation of globalization: redistribution and inequalities of incomes, tax competition between the States, tax havens, tax planning and relocations of the multinational groups, action of the European Union, the OECD etc. It studies the conditions for a tax citizenbased conception of a democratic social contract.


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CHAPTER 11 The Destabilization of the Functions of the Interventionist Tax State 307


307 CHAPTER 11 The Destabilization of the Functions of the Interventionist Tax State The genesis of the modern State is explained by the establishment of permanent taxation. The tension between the submission to the authority of the sovereign and the legitimacy of the consent by the representatives of the taxpayers characterizes, as we have seen, this evolution. The climax of liberal democracy in the 19th century is based on parliamentar- ism which is inspired by a limiting conception of financial political action. The liberal dogma extols the neutrality of expenditure and hence of taxes which are limited to the financing of the sovereignty compe- tences of the State. The increase of tax revenue (taxes and social contri- butions) indicates a radical change of the weight of the tax State: it always represents on average for the OECD countries more than one third (cf. chapter 5). From the Second World War the financing of social protection has accentuated this tendency, while at the same time creating significant differences between countries according to the type of fiscal structure and Welfare State. The role of taxation has changed with the Keynesian and social interventionist State: taxes are not only an object of public policy but also an instrument of other public policies. In accordance with Mann’s presentiment (1943), a functional approach to taxation is thus justified. In sociology, functional analysis is classical since Emile Durkheim recommended it in The Rules of the Sociological Method (1982, chap- ter 5), on the condition of distinguishing...

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