Tax norms, fiscal reality, and the democratic state

Fiscal scholars have not been shy in setting forth criteria for good systems of taxation. Nor have they been hesitant to criticize existing tax systems. Adam Smith’s four maxims of taxation – that taxes should be, first, based on the benefits that people receive from governmental services; second, imposed in certain and not arbitrary fashion; third, levied in a convenient manner; and, fourth, easily administered – are found in most texts on public finance. The subsequent scholarly literature led to the refinement of two main principles of taxation, represented by the respective claims that taxes should be based on individual evaluations of (or benefits from) public services and that they should be based on individual abilities to pay. ¹