Would tax incentives violate the moral equivalence of persons and induce rent-seeking?

With respect to taxation, the functioning of majoritarian democracy virtually ensures the emergence of discriminatory treatment. If tax rate progressivity is a proliferation of preferential, tax code provisions may be attributed to the rent seeking activity of special interest group. This is one argument for tax incentives induce rent seeking and hence violate the moral equivalence of persons.

The moral equivalence of persons implies an institutional imperative. This means that persons must be accorded the greatest possible equal liberty under and by constitutional and statutory law, and that the constitution embodies generality or impartiality constraint. We have seen that tax incentives are a sort of tax discrimination, and that these discriminations are inefficient. Roth is saying that: “In effect, a constitutional generality constraint would both respect the moral equivalence of persons and discourage rent seeking activity” (Page 91).

Representative democracy is reconcilable with the first- and third-person perspective, according to the conservative. But if majoritarian (representative) democracy can give expression to Kant´s two point of view, it must be constrained. Roth is arguing that post constitutional politics is majoritarian and discriminatory to the extent that participants promote separable interest, this is a form of rent-seeking activity.

Like a said before, I believe that generality in taxation is good (efficient) and that violations of generality also create rent seeking and violate economic freedom. This violation of economic freedom will violate the moral equivalence of persons. I believe that, providing tax incentives is bad for taxpayers, but in individual situations. As long as individuals are willing to play the game, businesses will keep seeking tax incentives for activities they would likely do without any assistance from local government and this would in my opinion create rent seeking and hence violate the moral equivalence of persons. But we can also discuss if tax incentives is to encourage investment or other behaviors. If tax incentives increase investment, maybe this is good for the economy and creates higher output.


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