Introduction

This book examines the enduring yet increasingly obscured relationship between taxation and public expenditure within democratic societies, framing it as a foundational element of the social contract. It challenges the contemporary political and economic narrative that equates taxation with wasteful public spending, instead reaffirming its role as a structural mechanism for fostering distributive justice within a cooperative democracy. Drawing on the contractarian tradition from Rousseau to Rawls, the book situates taxation within the broader institutional framework necessary for a fiscal democracy, grounded in the principles of mutuality and reciprocity. It proposes the Democratic Welfare State as a pragmatic approximation of Rawls’s property-owning democracy, designed to restore the fiscal contract and counteract market capture of democratic institutions. The proposed model includes restoring comprehensive income taxation, reasserting the taxation–spending link, integrating the benefit principle into fiscal policy, supporting universal access to welfare programmes, and reconsidering the international dimensions of fiscal justice.