Sovereignty, Taxation and Social Contract

nations under an implied social contract.7 This view of sovereignty could have powerful implications for national taxation.Recognizing ourselves as parties to a global social contract would require a fundamental reassessment of the conventional standards of tax policy design.Instead of focusing on national tax policy as appropriately reflecting only or even primarily the needs and wants of national constituents, a global social contract would require national policy to reflect outward as well, to consider the needs and wants of the worldwide community.Accordingly, this article examines the OECD's work on harmful tax competition from a political philosophy perspective in order to identify the existence of a global social contract for taxation and to assess its content and implications.A contractarian approach demonstrates the inadequacy of traditional tax policy analysis tools that are applied as if any given tax system is bound to the demands and authority of the nation-state, when global integration and interdependence is the social, institutional, and economic reality.If nations have sovereign duties in accordance with a global social contract, current and future national tax policy choices can only be Sorensen, Sovereignty: Change and Continuity in a Fundamental Institution, 47 POL.STUD.590 (1999).More specifically, in the context of international law generally, the idea is commonly held that states have some positive obligation to cooperate with each other.For example, UN Charter Resolution 2625 provides that "States have the duty to co-operate with one another, irrespective of the differences in their political, economic and social systems, in the various spheres of international relations, in order to maintain international peace and security and to promote international economic stability and progress, the general welfare of nations and international co-operation free from discrimination based on such differences."Declaration on Principles of International Law Concerning Friendly Relations and Co-operation among States in Accordance with the Charter of the United Nations, G.A. Res.2625, at 123, U.N. GAOR, 25th Sess., Supp.No. 18, U.N. Doc.A/8018 (Oct.24, 1970).Exactly what this resolution requires in terms of positive action is a matter of extensive debate within international law scholarship.For an introduction see, for example, A. V. LOwE, INTERNATIONAL LAW 110-113 (2007).For the purposes of this article, I extract the idea of sovereign duty from the larger concept of sovereignty itself in order to distinguish sovereignty from autonomy, as these two concepts are often conflated in legal scholarship that addresses the connections between sovereignty and taxation.See infra Part II.A.7. The approach of this article is by no means the only analytical framework for examining the OECD as an institution and its influence on national law in the U.S. and elsewhere.The same issues could also be analyzed from a law and economics, utilitarian, game theoretic or international relations approach, among others.See Allison Christians, Steven Dean, Diane Ring & Adam H. Rosenzweig, Taxation as a Global Socio-Legal Phenomenon, 14 ILSA J. INT'L & COMP.L. 303, 306 (2008) (arguing that more analysis of tax policy from these various lines of inquiry would help clarify the role of law in regulating global economic activity).