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Recent tax scholarship has embraced the idea of individual endowment taxation, or taxation of human abilities, as an approach to ideal tax theory. Under endowment taxation, individuals are taxed according to their native ability to command resources, rather than according to any actual index of goods or expenditures, such as income, consumption or wealth, that otherwise might be thought relevant to the assignment of tax burdens. This Article argues that endowment taxation is generally incompatible with political theories that might broadly be described as "liberal," whether or not these theories authorize what is called "redistribution." The Article also suggests that under a wide array of assumptions, lump-sum taxes such as an endowment tax are not optimally efficient. Lastly, it argues that even where they represent the most efficient available alternative, lump-sum taxes generate social costs if they compel individuals to work in order to meet tax obligations.



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