MODULE 7 Readings

 John Rawls’ Theory of Justice

Rawls’ theory of justice starts from the claim of the Original Position, a thought experiment
in which the parties select principles that will determine the basic structure of the society they
will live in. This choice is made from behind a ’veil of ignorance’, which would deprive
participants of information about their particular characteristics: his or her ethnicity, social
status, gender and, crucially, their conception of The Good. This forces participants to select
principles impartially and rationally. The guiding principle is “Justice as Fairness”. He
focused on distributive justice and attempted to reconcile the competing claims of the values
of freedom and equality.

In his concept of Veil of Ignorance, the individuals have to step back from real circumstances
and view the situation by forgetting about race, class, gender, and similar factors so that
fairness becomes the fundamental basis for justice. In negotiating social agreements based on
equality behind a veil of ignorance, risks are minimized and weaker parties are protected.

Rawls’s principle of justice of welfare of liberalism states that “the distribution of

benefits and burdens in a society is just only 1) Each person has the most political liberty
compatible with equal liberty for all, and 2)

Justice as Fairness aims to describe an arrangement of the major political institutions of a

liberal society the political constitution, and that with the legal system. It is because justice as
“the first virtue of social institutions.” In Rawls’ Thought Experiment, he proposed to imagine
humankind before society came into being – a natural state. People then asked to create a
society which decides how wealth and goods are to be distributed. However, before they
make any decisions they are placed behind a ‘veil of ignorance,” which means they do not
have any idea how successful they will be, or how wealthy they will become. Life is a lottery!

There are two moral powers which include conception of justice and the conception of good
and there two Principles of Justices: Principle 1: each person has an equal right to the same
basic liberties that are compatible with similar liberties for all and Principle 2: Social and
economic inequalities are to satisfy two conditions; a) they are to be attached to offices and
positions open to all under conditions of fair equality of opportunity and b) they are to
provide the greatest benefit to the least advantaged members of society.

In Rawls’ first principle, the basic liberties for all citizens includes: Political liberty (right to
vote and be eligible for public office); Freedom of speech and assembly; Liberty of
conscience and freedom of thought; Freedom regarding your own person; Right to hold
personal property; and Freedom from arbitrary arrest and seizure as these are understood
under the rule of law.

Rawls’s difference principle is also primarily intended to govern a society’s economic

institutions. Unlike the political arena, where everyone must be equal, the economic arena
must allow for some inequalities.” Inequalities are necessary to serve

According to John Rawls, the principles of justice that governs society must be acceptable to
everyone; otherwise, society will not be stable but subject to unrest. The principle of equal
liberty is meant to govern primarily society’s political institutions (its constitution,
government, courts, legislative system, and laws). It states that, “each person participating in
political practice or affected by it has an equal right to the most incentive liberty compatible
with a like liberty for all.” It means that everyone must has as many political rights and
freedoms as possible as long as everyone has the same “equal” political rights and freedoms.
For instance, everyone must have the same voting rights, the same legal rights, the same
freedom of speech, the same freedom of conscience, the same freedom of the press, and so
on. In the political sphere, everyone must be equal and everyone must be granted the
maximum degree of freedom compatible with everyone else having the same degree of
freedom.

Rawls’s second principle involves holding positions of authority and offices of command is
clear enough. For example, there is no hereditary positions; No exclusions based on gender,
race, etc. and, no “tests” based on wealth or property. In this principle, arranging social and
economic inequities so that everyone benefits are less clear; However, Rawls provides the
framework for thinking about this – original position and veil of ignorance.

Rawls’s principle of opportunities is supposed to govern a society’s economic institutions. It

states that the desirable jobs and positions should be open to anyone who is qualified by his or
her abilities. This means that jobs qualifications should be related to the requirements of the
job and should not discriminate by race or sex. It also means that society should provide
people with the training and education needed to qualify for desirable jobs.

To sum, for Rawls, “I do not know if I will be a man or a woman. I do not know if I will be
given fair share, jobs, and fair pay. By way of veil of ignorance, we need to step back from
real circumstances and view the situation by forgetting about race, class, gender, and similar
factors. It is because by virtue of the original position, we all have no idea about our future
lives but we know that we are all equal. In this way, the first rule should be to assign basic
rights and duties so that social and economic inequalities are just only if there is
compensating benefits for everyone particularly the least advantage. Thus, there is fairness
only when society makes choices of rules that are agreed upon by those that compose society
itself.

2. Taxation in the Philippines vis-a -vis to Rawls’ principle of justice as fairness and the
progressive system of taxation

Tax law in the Philippines covers national and local taxes. National taxes refer to national
internal revenue taxes imposed and collected by the national government through the Bureau
of Internal Revenue (BIR) and local taxes refer to those imposed and collected by the local
government. The Tax Code of 1997, Revenue Issuances and BIR Rulings pertaining to
national taxes ( vat, income tax, donor’s tax, capital gains tax, excise tax, estate tax, etc) are
posted at the BIR website (bir.gov.ph). Local taxation (like the payment of cedula,
amusement tax, real property tax, etc) is governed by the Local Government Code.

Three (3) inherent powers of the sovereign state:

•police power - the power to protect citizens and provide safety and welfare of society.
• eminent domain power - the power to take private property (with just compensation) for
public use.
• taxation power - the power to enforce contributions to support the government, and other
inherent powers of the state.

The 1987 Philippine Constitution sets limitations on the exercise of the power to tax. The rule
of taxation shall be uniform and equitable. The Congress shall evolve a progressive system
of taxation. (Article VI, Section 28, paragraph 1)

“Equality in taxation”
 similar to progressive system of taxation.
 tax laws and their implementation must be fair, just, reasonable and proportionate to one’s
ability to pay.
Primary requisite of equity principle:
 a progressive tax rate shall be applied equally to all persons, firms, and corporation, and
transactions placed in similar classification and situation.

Progressive system of taxation

 tax laws shall give emphasis on direct rather than indirect taxes or on the ability-to-pay
principle of taxation.

All money collected on any tax levied for a special purpose shall be treated as a special fund
and paid out for such purpose only. If the purpose for which a special fund was created has
been fulfilled or abandoned, the balance, if any, shall be transferred to the general funds of the
Government. (Article VI, Section 29, paragraph 3)

The Congress may, by law, authorize the President to fix within specified limits, and subject
to such limitations and restriction as it may impose, tariff rates, import and export quotas,
tonnage and wharfage dues, and other duties or imposts within the framework of the national
development program of the Government (Article VI, Section 28, paragraph 2) The President
shall have the power to veto any particular item or items in an appropriation, revenue or tariff
bill, but the veto shall not affect the item or items to which he does not object. (Article VI,
Section 27, second paragraph)

The Supreme Court shall have the power to review, revise, reverse, modify or affirm on
appeal or certiorari, as the law or the Rules of Court may provide, final judgments and orders
of lower courts in x x x all cases involving the legality of any tax, impost, assessment, or toll
or any penalty imposed in relation thereto. (Article VIII, Section 5, paragraph)

Tax exemptions are limited to those granted by law. However, no law granting any tax
exemption shall be passed without the concurrence of a majority of all the members of the
Congress. (Article VI, Section 28, par. 4). The Constitution expressly grants tax exemption on
certain entities/institutions such as (1) charitable institutions, churches, parsonages or
convents appurtenant thereto, mosques, and nonprofit cemeteries and all lands, buildings and
improvements actually, directly and exclusively used for religious, charitable or educational
purposes (Article VI, Section 28, paragraph 3); (2) non-stock non-profit educational
institutions used actually, directly and exclusively for educational purposes. (Article XVI,
Section 4(3))

In addition to national taxes, the Constitution provides for local government taxation. (Article
X, Section 5) (Article X, Section 6) Parenthetically, the Local Government Code provides
that all local government units are granted general tax powers, as well as other revenue-
raising powers like the imposition of service fees and charges, in addition to those specifically
granted to each of the local government units. But no such taxes, fees and charges shall be
imposed without a public hearing having been held prior to the enactment of the ordinance.
The levy must not be unjust excessive, oppressive, confiscatory or contrary to a declared
national economic policy (Section 186 and 187) Further, there are common limitations to the
grant of the power to tax to the local government, such that taxes like income tax,
documentary stamp tax, etc. cannot be imposed by the local government.

THEORY AND BASIS OF TAXATION

The power of taxation proceeds upon the theory that the existence of government is a
necessity; that it cannot continue without means to pay its expenses; and that for these means,
it has a right to compel all its citizens’ property within its limits to contribute. The basis of
taxation is found in the reciprocal duties of protection and support between the State and its
inhabitants. In return for his contribution, the taxpayer received benefits and protection from
the government. This is the so called “Benefits received principle”.
LIFEBLOOD DOCTRINE:
The lifeblood theory constitutes the theory of taxation, which provides that the existence of
government is a necessity; that government cannot continue without means to pay its
expenses; and that for these means it has a right to compel its citizens and property within its
limits to contribute.

BENEFITS RECEIVED PRINCIPLE:

This theory bases the power of the State to demand and receive taxes on the reciprocal duties
of support and protection. The citizen supports the State by paying the portion from his
property that is demanded in order that he may, by means thereof, be secured in the
enjoyment of the benefits of an organized society. Thus, the taxpayer cannot question the
validity of the tax law on the ground that payment of such tax will render him impoverished,
or lessen his financial or social standing, because the obligation to pay taxes is involuntary
and compulsory, in exchange for the protection and benefits one receives from the
government.

DOCTRINE OF SYMBIOTIC RELATIONSHIP:

This doctrine is enunciated in CIR v. Algue, Inc. [158 SCRA 9], which states that “Taxes are
what we pay for civilized society. Without taxes, the government would be paralyzed for lack
of the motive power to activate and operate it. Hence, despite the natural reluctance to
surrender part of one’s hard-earned income to the taxing authorities, every person who is able
must contribute his share in the burden of running the government. The government for its
part, is expected to respond in the form of tangible and intangible benefits intended to
improve the lives of the people and enhance their material and moral values.”