Ability to pay and Fundamental Duty

Abstract

This paper discusses the thesis according to which there is, in Brazil, a “fundamental duty” to pay taxes due to the ability to pay. It first examines the meaning of ability to pay as a principle of the Constitution, concluding that it establishes a criterion of equality to be followed by the State when exercising the power to tax, which implies more severe taxation to taxpayers of greater economic capacity. It is a direction to the power of taxation that excludes others; it is a restriction on the power of taxation, not an extension. The paper then examines the relationship between ability to pay and legality, concluding that the duty to assess the extent to which manifestations of economic capacity will be taxed has been handed over by the Constitution to the Legislature. The payment of taxes is an obligation to be created and dimensioned by legal rules, and does not result directly from the factual existence of economic capacity. Then, the paper examines the thesis of the “fundamental duty” to pay taxes, rejecting the arguments according to which there is a general legal duty to pay taxes that would affect all citizens to the extent of their ability to pay, and which would be as fundamental as the fundamental rights to be ensured through the use of resources raised through taxation. Finally, it demonstrates the hierarchical difference between the duty to pay taxes and the right not to pay, the invalidity of balancing fundamental rights with the supposed fundamental duty to pay taxes, and the incorrectness of starting from pro-State tendencies of prior settlement in case of doubt about the existence of the obligation to pay taxes, due to difficulties either in the interpretation of the text or in framing the facts.