Occupy Wall Street, Distributive Justice, and Tax Scholarship: An Ideology Critique of the Consumption Tax Debate

[Excerpt] “This Article argues that the pro-consumption tax literature is wrong to claim that no legitimate fairness objections to the consumption tax exist. It argues that the persistent and widespread wariness about replacing our current hybrid consumption tax/income tax system with a pure consumption tax is, contrary to what the pro-consumption tax literature asserts, completely justified. In fact, our reservations about the consumption tax’s fairness reflect legitimate concern about the role of capitalist power in America, particularly over the past thirty years. Indeed, the more the nation continues to experience the social welfare effects of increased capitalist power, the more compelling these objections become. History proves these concerns not just legitimate, but paramount. A full account, not a dismissal, of how capitalist power might benefit from a consumption tax is what would be required to meet these fairness objections. Part II of this Article fleshes out the fairness objections more fully and addresses the counter arguments that exist in the literature. In doing so, it seeks to reestablish the legitimacy of fairness objections to a consumption tax and encourage more robust and historically aware considerations of distributive justice in tax policy. Part II goes further and shows that the consumption tax literature gets it wrong in a particularly revealing way. Part II characterizes the pro-consumption tax literature’s dismissal of serious fairness and distributive justice concerns as, essentially, ideological; the literature’s very framing of the fairness issue precludes any serious consideration of the historical reality of capitalist power. Ideology, not argument, supports the claim that capitalist power is not a concern.