(Mis)understanding the Fine Print of the Social Contract – The Pluralist and Deliberative Politics of Taxation

This is where I write all my stuff on taxation and democracy, mostly my PhD thesis.

View the Project on GitHub maxheld83/schumpermas

Give-and-Take –– How Citizens Would Think About Taxation, If They Could

This is Maximilian Held's dissertation at BIGSSS.

The spirit of a people, its cultural level, its social structure, the deeds its polity may prepare – all this and more is written in its fiscal history, stripped of all phrases. He who knows how to listen to its message here discerns the thunder of world history more clearly than anywhere else.
–– Joseph Schumpeter (1918: 6)

Reaching understanding, (...) the inherent telos of human speech.
–– Jürgen Habermas (1987: 287)

Citizens preparing the press conference at the 2014 CiviCon Citizen Conference


Why, in the most prosperous of economies, are we plagued by widening inequality, underfunded states and persistent unemployment?
Why, in the most enlightened of times, are we thoroughly confused about governing our mixed economies and perilously disaffected with the results our democratic rule produces?
What if there were alternative taxes, which afforded us more attractive tradeoffs between economic efficiency, equity and sustainability or other ends?
What if we could agree on such alternative taxes, but would not, because we lacked the necessary information or suitable fora, and because our capacity for mutual reason-giving had been diminished by alienating inequality or clouded by special interest?

The first CiviCon Citizen Conference was undertaken to put these questions to a tentative, quasi-experimental test, hosting 16 diverse, self-selected citizens for a week of deliberating taxation in the summer of 2014. Citizens were tasked to design a tax system "from scratch", choosing among possible combinations of tax base and schedule. During the conference, participants

  1. studied some of the most important and contentious aspects of taxation in learning sessions, held by the investigator,
  2. deliberated in small group and plenary sessions, assisted by two trained moderators,
  3. met with two tax experts and
  4. prepared and held a press conference on their results.

Citizens were reimbursed for their travel, received €50 compensation and were provided with free room and board at the conference venue. Proceedings were recorded on video, moderator and investigator daily debriefings were taped and participants invited to provide feedback.

Both before and after the conference, citizens sorted 79 statements on taxation and the economy according to their subjective viewpoint. Following q-methodology, shared viewpoints were extracted by factor analysing a rotated correlation matrix, with participant sorts as variables and 79 statements as cases. Six extracted factors were interpreted as ideal-typically scored statement sorts:

Participating citizens expressed resentful, radical and moderate viewpoints on taxation before the conference, including some apparent inconsistencies between beliefs, values and preferences on taxation. After the conference, citizens shared decommodifying, pragmatic and critical viewpoints on taxation, with fewer apparent inconsistencies. Moreover, factor models after the conference yielded greater explanatory power, indicating a simpler, lower-dimensional structuration of subjective viewpoints.

While citizens considered themselves ill-prepared yet to recommend a tax, they felt more confident in deciding on tax policy and advocated for more and longer citizen participation on such abstract matters. If not necessarily a better tax, results indicate that deliberating taxation does indeed strengthen viewpoint consistency, and better structure subjectivies to avoid malaggregations. Deliberative democracy may or may not yield rational consensus on taxation, but at least, it should help reduce the rough-and-tumble of economic ideologies to fewer, deeper and reasonable disagreements, more amenable to last resort majority decisions.

This give-and-take on the small print of our social contract may never end, but in time, it may be the best antidote for us disaffected democracts, and bring us a little closer to just policy, for our time.

Dissertation Committee

This dissertation is advised by:

  1. Olaf Groh-Samberg (BIGSSS, University of Bremen)
  2. Martin Nonhoff (BIGSSS / IniS, University of Bremen)
  3. Claus Offe (Hertie School of Governance, Berlin)