Tax and Globalisation:Toward a New Social Contract

Taxation and representation are famously linked in the coercive co-authored project of political governance described through the social contract metaphor. Globalisation transforms this canonical account of the state. Many people can relocate and operate beyond state borders, consuming goods and services publicly offered by other jurisdictions. Expanding people’s opportunities to satisfy their preferences and pursue their goals supports their liberty.Yet, it also limits the ability of states to collect taxes so as to provide necessary public goods and secure justice, jeopardising the bond between taxation and equal membership in a political community. The challenge for taxation under globalisation is to revitalise the very basis of the social contract. Ideally, the new social contract should support the states’ just institutions and the collective self-determination of their members without rolling back the opportunities people have acquired through globalisation.