This Article explains why international trade and tax arrangements should advance global wealth redistribution in a world of enhanced economic integration. Despite the indisputable importance of global poverty and inequality, contemporary political philosophy stagnates in the attempt to determine whether distributive justice obligations should extend beyond the political framework of the nation-state. This results from the difficulty of reconciling liberal impartiality with notions of state sovereignty and accountability. This Article offers an alternative approach that bypasses the controversy of the current debate. It argues that international trade creates “relational-distributive” duties when domestic parties engage in transactions with foreign parties that suffer from an endowed vulnerability, such as the extreme poverty prevalent in the developing world. These relational duties differ from “traditional” distributive justice claims because they rely on actual economic relationships rather than hypothetical social-contract scenarios. In a competitive market, however, private parties cannot address these relational-distributive duties by themselves because doing so would put them at a competitive disadvantage. This Article therefore argues that the only collective action solution to this systemic problem in the current geopolitical setting is the transfer of wealth among states.
This Article then suggests some policy implications of this normative analysis in the field of international tax law. It points out that the allocation of taxing rights is a form of wealth allocation that divides globalization’s revenue proceeds among nations. As such, tax allocation arrangements should help “correct” international trade relationships that fail to meet relational-distributive standards. This discussion stresses a point frequently neglected in both the tax and political philosophy literature: Real-world attempts to promote a more just distribution of global wealth could benefit greatly from the integration of distributive considerations and tax allocation arrangements.
