The Political Economy of Taxation: Power, Structure, Redistribution (original) (raw)
Related papers
2002
Does democracy affect taxation? Do varieties of democratic institutions affect levels of revenue, methods of collection, and distributions of tax burdens? Many political scientists believe so despite the currently mixed evidence. Moreover, prominent models of fiscal politics yield differing predictions about whether and how elections, parties, constitutions, and legislative and executive decision rules influence policy choices. This essay reviews recent works on taxation under democracy with a focus on how scholars derive hypotheses about institutional effects. It evaluates the leading theories’ main assumptions and implications, including the results of empirical tests so far. Many explanations focus mainly on electoral competition or on post-electoral governing, but not both, and draw their evidence from a small set of countries. Promising works develop more complete models of decision making, test hypotheses against a broader range of countries’ experiences, and point toward more persuasive answers to current research questions.
Feasible taxation in advanced democracies
International Review of Economics, 2016
One usually considers tax pressure as the result of the policymakers' efforts to increase public expenditure, while populism is resorted to in order to alleviate tensions among the taxpayers. This paper takes a different view. It assumes that populism is exogenous in the short run and defines the tolerable degree of tax pressure required to bring about redistribution; however, taxpayers also resent disappointing economic performances and low-quality public expenditure. Within this context, therefore, policymakers try to find a compromise between their desire to engage in rent-seeking and their electoral ambitions. This paper shows under which circumstances compromise is obtained, how tensions arise, and what outcomes the taxpayers' reactions may generate.
A Theory of Feasible Taxation in Advanced Democracies
2015
Tax pressure is usually considered the result of the policymakers’ efforts to maximise public expenditure, possibly by resorting to populism in order to alleviate tensions among the taxpayers. This paper offers a different and more articulated approach, following which populism is exogenous in the short run, but may change in the long run; taxpayers are sensitive to the quality of public expenditure; and policymakers try to find a compromise between their desire to engage in rent-seeking and their electoral ambitions. This paper shows under which circumstances compromise is obtained, how tensions arise, and illustrates the categories of outcomes that the taxpayers’ reactions may generate.
European Journal of Political Research
Echoing the call for 'no taxation without representation', the development of modern taxation went hand-in-hand with Western democratisation. However, taxation appears to have lost its role in the third wave of democratisation. Unlike early democratisers, contemporary autocracies tend to introduce a readymade modern taxation system before democratisation. With advice from international organisations, the value added tax (VAT), which mature democracies innovated, has been adopted for economic adjustment and development in globalised markets. Despite these divergences, it is argued in this article that a fundamental relationship between taxation and representation remains. Taxation inherently involves a social contract between revenue-seeking rulers and citizens, and thus involves their bargaining over representation. Therefore, the production of state revenue intervenes in contemporary democratisation as well. By factoring in the effect of the VAT in 143 developing countries between 1960 and 2007, an entropy-balancing analysis has confirmed its important role in contemporary democratisation. The taxation-democratisation linkage has travelled from early to contemporary democratisation.
Worlds of Taxation. The Political Economy of Taxing, Spending, and Redistribution since 1945
Worlds of Taxation. The Political Economy of Taxing, Spending, and Redistribution since 1945, 2018
The “Worlds of Taxation” volume responds to the need for scholarship analyzing the historical background of the challenges faced by governments of industrial nations as they attempt to devise fiscal policies that fund welfare states and address the growing inequality of wealth and income. The volume presents case studies of the varieties of fiscal welfarism since 1945, drawing on the framing methodologies developed in fiscal history scholarship since the 1990s. These studies focus on episodes of policy shifts in Denmark, Sweden, France, Greece, Spain, Switzerland, the United States, and Japan, enriched with data on other OECD nations. The studies feature comparative analysis of universalistic welfare states funded primarily by broad-based taxes with the history of less ambitious welfare states funded by more eclectic tax systems. Endorsements: ‘Deploying a concept of 'varieties of fiscal welfarism', the authors investigate 20th century tax policy from political, sociological and economic history perspectives. Current debates over fiscal policy and debt will benefit from the case studies, reminding us of the importance of historical research for understanding the endurance of national characteristics in a globalized economy.’ Catherine Schenk, Professor of Economic and Social History at the University of Oxford ‘Both taxation and welfare systems can be more or less redistributive, and the contributors in this excellent collection of essays explain the interrelationships between how revenue was raised and spent in a wide range of countries. The results are of great interest to anyone grappling with major issues of our time.’ Martin Daunton, Emeritus Professor of Economic History, University of Cambridge and author of Trusting Leviathan: The politics of taxation in Britain, 1799-1914 and Just Taxes: The Politics of Taxation in Britain, 1914-1979 ‘This excellent collection treats taxation as the truly global phenomenon that it is. With revisionary interpretations, this distinguished team of editors and authors has produced an compelling argument for the centrality of taxation in the shaping of the modern world - a welcomed addition to every library.’ Julia Laura Rischbieter, Junior Professor of Global Economic History, University of Konstanz ‘This timely, well-conceived volume brings together an impressive array of studies on the political and economic forces that have shaped the evolution of fiscal systems across the developed world since 1945. Particularly recommended for its attention to lesser-known cases such as Denmark, Spain, and Switzerland that add significant analytical power.’ Carl-Henry Geschwind, author of A Comparative History of Motor Fuels Taxation, 1909-2009 Disclaimer: The uploaded document contains the volume's front matters and table of contents.
Politics and the Normative Analysis of Taxation
Taxation has been a much-discussed subject in the literature on economics and in writings on the role and meaning of the state. Over the centuries, many authors have put forward views of what qualifies as "good" taxation and what constitutes undesirable tax policy. Consensus on these issues has changed over time, depending on historical circumstances and prevailing modes of economic thinking.
Representation with Regressive Taxation: State Revenue Production and Democratization Revisited
The literature maintains that in the history of mature democracies, a progressive income tax evolved with a demand for equality, as reflected in the phrase "no taxation without representation." Starting in the mid-1970s, international economic pressure led to the introduction of regressive consumption taxes in countries that have been democratizing and are yet to democratize. However, little attention has been paid to the emerging link between regressive taxation and representation. Redistributive politics is a critical intervening factor. Although elites accept modern taxation without fearing redistribution, with its regressive effect, citizens increase their demand for equality. We conduct a quantitative analysis of 160 countries from 1960 to 2008 and confirm a positive effect of regressive taxes on democratization. We also find that economic growth alleviates the negative effect of tax inequality on democratization. This study illuminates the new tax-democratization lin...
Do Institutions Really Matter?: Taxation in Industrialized Democracies
Comparative Political Studies, 1998
New institutionalism has emerged as one of the most prominent research agendas in the field of comparative politics, political economy, and public policy. This article examines the role of institutional variation in political/economic regimes in shaping tax burdens in industrialized democracies. An institutionalist model for tax policy variation is tested across the Organization for Economic Cooperation and Development (OECD) democracies. Countries are conceptualized and statistically modeled in terms of majoritarian, shifting coalition, and dominant coalition governments. Regression analysis and cluster analysis are used to statistically model crossnational tax burdens relative to the strength of labor organization and party dominance in parliament. This study finds that political and economic institutions are important in explaining tax policy variation. Specifying the structure of political and economic institutions helps to explain the size of the state in modern capitalist democracies. This article specifies and demonstrates which institutions matter and how much they matter.
2006
Governments that wish to redistribute through budgetary policy do so mostly on the spending side, not on the taxation side of the budget. The taxation side is nevertheless important, partly because less efficient tax structures seem to be associated with lower taxation and spending levels. Hence political conflicts over spending levels may partly be fought as conflicts over tax structure. The paper provides a coherent perspective on the politics of tax structure. Specific topics include the (ir-)relevance of tax mixes, policy change in income taxation, the importance of tax competition, and the role of political institutions. -- Wenn der staatliche Haushalt zur Umverteilung genutzt wird, so geschieht dies vor allem auf der Ausgabenseite und nicht auf der Einnahmenseite. Die Einnahmeseite ist trotzdem bedeutsam, weil es offenbar einen Zusammenhang gibt zwischen der Effizienz der Steuerstruktur und dem Steuerniveau. Daraus folgt, dass politische Auseinandersetzungen über Ausgabennivea...