Ability to Pay in Tax Law

Why This Book?

This volume contains the proceedings of the IBFD Academic Tax Conference (ATC), held at IBFD’s headquarters in Amsterdam on 21–22 May 2026, devoted to the theme Ability to Pay in Tax Law. This conference convened leading experts from around the world to examine the ability-to-pay concept, widely considered the cornerstone of fair taxation yet marked by striking diversity in interpretation and application.

Ability to pay is widely regarded as the foundational idea of modern (income) taxation, commonly understood to require that tax burdens reflect a taxpayer’s economic capacity. However, this convergence conceals deep and persistent divergences in interpretation, implementation and legal effect. By exploring the convergences and differences, this book shows that ability to pay is not a one-size-fits-all axiom but a complex, evolving standard at the heart of tax justice controversies.

The book is structured in five parts, each grouping chapters around a thematic focus. Part I surveys the concept’s historical and philosophical foundations, tracing its evolution from classical ideas of justice to modern tax theory. Part II investigates the constitutional and legal underpinnings of ability to pay, examining how it functions as a principle in fundamental law and judicial review across different countries. Part III focuses on (personal) income taxation, analysing how the ideal of taxing according to capacity is implemented in practice and what challenges and compromises arise. Part IV considers the principle beyond income tax (namely, in social security contributions, consumption and wealth taxes), highlighting both its potential applications and inherent limitations in those domains. Part V addresses international dimensions, asking whether ability to pay can or should inform supranational tax norms in contexts such as EU law or bilateral tax treaties.

Despite broad rhetorical endorsement, ability to pay remains a contested concept. The perspectives collected in this volume reveal how its meaning is shaped by different legal traditions and policy choices, and why it continues to spur debate in tax scholarship and practice. Aimed at advanced tax scholars, judges, legislators and practitioners, this book provides a thorough mapping of the ability-to-pay principle’s many facets in tax law. By clarifying how the principle is articulated, operationalized and adjudicated across jurisdictions, it offers a durable reference point for future discussions on fairness and equity in taxation.