Citizen Tax Juries: Democratizing Tax Enforcement after the Panama Papers

• DOI: 10.1177/00905917211018007
• Published date: 01 April 2022
• Date: 01 April 2022
• Author: Gordon Arlen
• Subject Matter: Articles

https://doi.org/10.1177/00905917211018007

Political Theory

2022, Vol. 50(2) 193 –220

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DOI: 10.1177/00905917211018007

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Article

Citizen Tax Juries:

Democratizing Tax

Enforcement after

the Panama Papers

Gordon Arlen1

Abstract

Four years after the Panama Papers scandal, tax avoidance remains an

urgent moral-political problem. Moving beyond both the academic and

policy mainstream, I advocate the “democratization of tax enforcement,”

by which I mean systematic efforts to make tax avoiders accountable to the

judgment of ordinary citizens. Both individual oligarchs and multinational

corporations have access to sophisticated tax avoidance strategies that

impose significant fiscal costs on democracies and exacerbate preexisting

distributive and political inequalities. Yet much contemporary tax sheltering

occurs within the letter of the law, rendering criminal sanctions ineffective.

In response, I argue for the creation of Citizen Tax Juries, deliberative

minipublics empowered to scrutinize tax avoiders, demand accountability,

and facilitate concrete reforms. This proposal thus responds to the wider

aspiration, within contemporary democratic theory, to secure more popular

control over essential economic processes.

Keywords

oligarchy, inequality, tax sheltering, deliberative democracy, minipublics,

critical realist democratic theory

1Postdoctoral Fellow, Justitia Center for Advanced Studies, Goethe University Frankfurt,

Germany

Corresponding Author:

Gordon Arlen, Justitia Center for Advanced Studies, Goethe University Frankfurt,

Frankfurt am Main, Hessen, Germany

Email: arlengor@gmail.com

1018007PTXXXX10.1177/00905917211018007Political TheoryArlen

research-article2021

194 Political Theory 50(2)

Introduction

In April 2016, investigative journalists leaked files from the Panama-based

law firm Mossack Fonseca & Co. The scandal that resulted from the so-called

Panama Papers brought worldwide attention to the shadowy practices that

elites use to shield their assets from taxation. While financial ethics has

become a burgeoning field in political theory, tax sheltering has received less

attention than other topics like central banking (van’t Klooster 2019) and

debt (Herzog 2017) with some notable exceptions (Risse and Meyer 2 019;

Dietsch 2015; Dietsch and Rixen 2014; Wollner 2014; Ronzoni 2009;

Brock 2008). Moving beyond the academic and policy mainstream, this

essay advocates for a “democratization of tax enforcement” that includes

systematic efforts to make tax avoiders accountable to the judgment of ordi-

nary democratic citizens. The centerpiece of this approach is my proposal

for Citizen Tax Juries, minipublics empowered to investigate tax avoiders,

enforce discursive accountability, and ultimately initiate tax policy reform.

As such, this essay has several main contributions. First, I use tax shelter-

ing as a lens for thinking about a central problem facing contemporary democ-

racies: the proliferation of nonaccountable forms of private socioeconomic

power. From anonymous algorithms governing credit decisions, to central

banks setting monetary policy behind closed doors, to billionaire mega-donors

exerting shadowy influence through Political Action Committees (PACs)

democratic citizens are assailed by an array of crosscutting hazards that are

not easily controlled by existing institutional mechanisms. How can demo-

cratic citizens exert more control over these processes?

Tax sheltering is a crucial case study for thinking about this dilemma,

because it amplifies two distinct forms of private power: the oligarchic power

of super-wealthy individuals, and the corporate power of large multinationals

like Apple and Google. Although these actors occupy structurally distinct

positions in international political economy, their use of tax shelters helps to

consolidate a “new Gilded Age,” which affords systematic economic and

political advantages to the super-rich (Gilens 2014; Winters and Page 2009;

Bartels 2008).

By highlighting these empirical problems, the essay contributes to a body

of democratic theory broadly described as “critical realist” in orientation.

This literature departs from ideal modes of consensus seeking and focuses,

instead, on the inescapable threats posed by oligarchy, systemic corruption,

and other forms of elite influence over public policy (Vergara 2020; Arlen

2019; Rahman 2016; Green 2016; McCormick 2011). In an important article,

Samuel Bagg demonstrates why the project of containing and dispersing elite

power is foundational to the normative case for democracy (Bagg 2018). On