Introduction

The final R of taxation is representation. Citizens and other entities are generally only required to pay taxes if the taxing authority provides them with a political voice through elected representatives. The relationship of taxation to representation goes back to the time before the American Revolution.

At the time, the anti-British slogan “Taxation without representation is tyranny” reflected the resentment of American colonists at being taxed by the British parliament, a political body to which they elected no representatives. Tax can therefore build healthier democracies, because as populations are taxed, they tend to demand stronger political representation and governance.

This dynamic has contributed to the emergence of what is known as the ‘social contract’ or ‘fiscal contract’, whereby tax-paying members of society vote for certain candidates and in doing so expect them to raise and spend the taxpayer’s revenue in a way that benefits the voter. A striking study found that in 113 countries between 1971 and 1997, introducing or increasing taxes without simultaneously increasing or improving service delivery led to citizens demanding their rights, and to subsequent democratic reforms.

The final R of taxation is representation. Citizens and other entities are generally only required to pay taxes if the taxing authority provides them with a political voice through elected representatives. The relationship of taxation to representation goes back to the time before the American Revolution.

At the time, the anti-British slogan “Taxation without representation is tyranny” reflected the resentment of American colonists at being taxed by the British parliament, a political body to which they elected no representatives. Tax can therefore build healthier democracies, because as populations are taxed, they tend to demand stronger
political representation and governance. This dynamic has contributed to the emergence of what is known as the ‘social contract’ or ‘fiscal contract’, whereby tax-paying members of society vote for certain candidates and in doing so expect them to raise and spend the taxpayer’s revenue in a way that benefits the voter. A striking study found that in 113 countries between 1971 and 1997, introducing or increasing taxes without simultaneously increasing or improving service delivery led to citizens demanding their rights, and to subsequent democratic reforms.
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