This paper debates whether former civil servants should be taxed differentially. It argues that whenever public officials’ post-retirement income in the private sector is derived from their previous office, an additional tax should be levied on them since, in such situations, the ability-to-pay principle is an insufficient horizontal equity criterion. This idea is grounded in equity propositions and may be justified by various liberal theories of equal opportunities and utilitarianism.

Although, as a rule, the paper supports the ability-to-pay principle given the common shortcomings underlining the benefit principle, it challenges the perception that all individuals with the same ability to pay should be taxed equally. It argues that a normative principle, such as the ability to pay, is
apparently insufficient for horizontal equity where one’s ability to earn is based on the benefit he obtained from using public resources inaccessible to other individuals.