Contractualism and Tax Governance: Hobbes and Hume

Abstract

Hobbes and Hume represent two very different modes of governance; that is, the legitimate exercise of the government power, and the ensuing relationship between government and citizens (taxpayers). These different modes reflect their diverging approaches to man, consent, contract, sovereignty and society. Hobbes advocates a very hierarchical mode of governance. The sovereign governs by way of law conceptualised as a command. His power to tax is almost unlimited – absent natural property rights and (natural) distributive justice. Tax is the price to be paid for security. Government (tax authorities) has to rely on coercion and deterrence to force its subjects to comply with their legal obligations. Nonetheless, a wise sovereign observes natural law. Equality is an important principle in this respect. For Hobbes, the benefit theory of taxation entails taxing consumption - curtailing luxury consumption being a secondary goal. For Hume, government is on the background; absolute sovereignty is not an issue. Gifted with a natural (but limited) benevolence and developed with (parental) education human beings cooperate without the intervention of a contract. In as much as human beings share the sense of the common good, they might voluntarily pay taxes and if they are not willing to pay taxes for the common good the government is there to force them. Institutions do not need to force self-interested individuals to comply but rather support individuals’ inborn but limited sympathy towards their fellow human beings to enhance cooperation in large societies. Sympathy motivates them to act according the common interest.