Fourth International Conference on War Tax Resistance and Peace Tax Campaigns - Brussels, Belgium 1992

Appendix 4



Juan Carlos Dalmauu Lliso

University of Valencia


This article addresses the problem of conscientious objection to taxation for military purposes from an economical point of view, using the available tools and starting with the theory of public finance. Thus, with this subject matter, I am referring to public expenditure and individual preferences, the theory of public goods, externalities, systems of taxation financing, etc. Given that we find ourselves facing a complex Sociological phenomenon, an adequate study requires a multilateral as well as an interdisciplinary viewpoint, both in its definition and its treatment, from which the core problem of individual preferences begins to be seen.

The topic at hand deals with the kind of tax resistance motivated by nonconformity on the part of certain citizens before specific distribution guidelines of the national public spending. The taxpayer-user questions the necessity or the scope of certain activities undertaken by the government. Specifically, I wish to focus this study on a concrete public function: national defense. But this is not the sole function in which one can capture some civic nonconformity in the meaning that will be examined here. Considering the case of financing military expenditure, individual consciousness acquires great importance at the moment of the possible revelation of individual preferences on the part of citizens-voters-taxpayers. The underlying ethical component confers, in my opinion, distinctive nuances in the case of this budgetary measure which can be situated in a phase far superior to that of individual preferences.

Even though tax resistance can generally be analyzed using three basic coordinates: the tax burden and its distribution, public expenditure, and the prevailing tributary methods and procedures; the objective of this study is based on a focus starting exclusively from public expenditure. That is to say, the dissatisfaction towards public expenditures execution as a cause of tax resistance.

The explosiveness of the problem can be summarized in the coercive and universal nature of national budgetary decisions which cannot be taken further than the taxpayers' attitudes of resistance and passiveness. Coercion and universality are practiced not only in the aspect of taxation, but also through public expenditure. The fact that the state should not be considered as an individual with excessively paternalistic likes and preferences of its own is defended since they fall far from the wishes of the individuals who comprise it.

The conscientious objector to taxation rejects the fact that government still devotes considerable sums of money to undesired budget items. The problem lies in how this rejection can be carried out both in the consumption of, as well as the financing of, this undesired public good (or public bad, depending on how it is seen). Therefore, defense, considered as a pure public good in Samuelson's terms, confers peculiar nuances to bear in mind which will hamper the objector's aims. National defense is one of those public goods considered bilaterally non-exclusive, which is to say, the defense contractors or suppliers cannot exclude any potential user. Likewise, the potential user of the said good cannot exclude himself from its use or consumption. The impossibility of rejection that is presented in this public good with bilateral non-exclusion can be seen as a generating factor of negative political externalities arising from the nonconformity of certain individuals in relation to the collective decision and the individuals who belong to the group that votes in favour of the decision to produce and supply the public good (which is, for them, bad).

Both this presumable existence of the negative externalities as well as the Lindhal-Samuelson conditions for the attainment of Paretian optimality in the presence of public goods lead us to the conclusion that the conscientious objector to taxation for military purposes, and any other individuals who disagree with the state's performance concerning public expenditure, should be compensated, by means of transfer, for the evil or the loss of welfare brought about by defense production. However, this solution sets up a serious practical problem: adopting this optimal solution would require that the individuals reveal its preferences in public expenditure, and if taxes can be negative, there would be an overwhelming temptation to lie. The possible lack of honesty in revealing preferences forces us to rule out this solution at present. This solution is one that is now placed in the plan of benefit principle.

In my opinion, one way of taking into account individual citizens' preferences when focusing the matter of budgetary decisions would come through a possible introduction of earmarked taxes which brings us nearer to the upheld benefit principle, a criterion which considers political taxation as well as expenditure, unlike the principle based on the ability to pay which is only a criteria for political taxation. My proposition is founded on a intermediate situation of tax earmarking to resolve the problem of conscientious objection to taxation. I defend a partial earmarking, not exclusive and definitive, of personal income tax toward public expenditure on defense. It is a solution which is similar (but not the same) to the one currently upheld and carried out by conscientious objectors to taxation for military purposes.