Marcelo Bergman and Sven H. Steinmo
- Published in print:
- 2018
- Published Online:
- September 2018
- ISBN:
- 9780198796817
- eISBN:
- 9780191838484
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198796817.003.0012
- Subject:
- Political Science, Comparative Politics, Political Economy
This policy-oriented chapter draws specific lessons from the historical narratives of previous chapters that should be of interest to tax policymakers and policy activists in developing nations ...
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This policy-oriented chapter draws specific lessons from the historical narratives of previous chapters that should be of interest to tax policymakers and policy activists in developing nations today. The chapter attempts to answer the “So What?” question by drawing on the historical analyses of previous chapters. The chapter highlights what has worked well in different countries and the tax policies that have been less successful at generating taxpayer consent. It also examines why some policies have been less successful over time in different countries. It argues that states which have been most successful in generating high levels of compliance (1) develop strong administrative capacities, (2) treat taxpayers equitably, (3) generate a common sense of purpose or identity, and (4) do not discriminate in favor or against specific segments of society.Less
This policy-oriented chapter draws specific lessons from the historical narratives of previous chapters that should be of interest to tax policymakers and policy activists in developing nations today. The chapter attempts to answer the “So What?” question by drawing on the historical analyses of previous chapters. The chapter highlights what has worked well in different countries and the tax policies that have been less successful at generating taxpayer consent. It also examines why some policies have been less successful over time in different countries. It argues that states which have been most successful in generating high levels of compliance (1) develop strong administrative capacities, (2) treat taxpayers equitably, (3) generate a common sense of purpose or identity, and (4) do not discriminate in favor or against specific segments of society.
Sven H. Steinmo
- Published in print:
- 2018
- Published Online:
- September 2018
- ISBN:
- 9780198796817
- eISBN:
- 9780191838484
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198796817.003.0001
- Subject:
- Political Science, Comparative Politics, Political Economy
Why are some people more willing to pay their taxes than others? In some countries the government is able to collect more than 90% of the taxes it is owed, while in other countries more than 30% of ...
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Why are some people more willing to pay their taxes than others? In some countries the government is able to collect more than 90% of the taxes it is owed, while in other countries more than 30% of tax revenue goes missing due to tax evasion. This book explores this question by examining the fiscal history of five different democratic nations: Sweden, Britain, Italy, the United States, and Romania. This chapter introduces the book and draws out the central themes introduced in the substantive chapters. Drawing on these rich historical chapters, the introduction shows that successful states have developed strong administrative capacities, treat all taxpayers fairly, and deliver value for the monies they collect. This chapter argues that differences in tax compliance across countries is not explained by different political cultures, but is instead explained by differences in the efficacy of state institutions and the ways they have interacted with their citizens.Less
Why are some people more willing to pay their taxes than others? In some countries the government is able to collect more than 90% of the taxes it is owed, while in other countries more than 30% of tax revenue goes missing due to tax evasion. This book explores this question by examining the fiscal history of five different democratic nations: Sweden, Britain, Italy, the United States, and Romania. This chapter introduces the book and draws out the central themes introduced in the substantive chapters. Drawing on these rich historical chapters, the introduction shows that successful states have developed strong administrative capacities, treat all taxpayers fairly, and deliver value for the monies they collect. This chapter argues that differences in tax compliance across countries is not explained by different political cultures, but is instead explained by differences in the efficacy of state institutions and the ways they have interacted with their citizens.
John D’Attoma
- Published in print:
- 2018
- Published Online:
- September 2018
- ISBN:
- 9780198796817
- eISBN:
- 9780191838484
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198796817.003.0005
- Subject:
- Political Science, Comparative Politics, Political Economy
It is well known that tax compliance is low in Italy. Many scholars have examined Italian taxpayer behavior, mainly using experiments and surveys. However, little attention has been given to the ...
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It is well known that tax compliance is low in Italy. Many scholars have examined Italian taxpayer behavior, mainly using experiments and surveys. However, little attention has been given to the historical circumstances that have shaped divergent taxpayer behavior in Italy. This chapter uses historical data from Italian unification through the Second Republic to assess the effects of Italy’s major formal institutions (the Church, state, and political parties) and informal institutions (clientelism) on Italian tax behavior. It argues that nineteenth-century unification and Fascism had significant repercussions for the Italian state and how Italians perceive the state. Because of this, Italians lack trust in their government and their fellow citizens, which inhibits a willingness to pay taxes. The implication then is a low-trust/low-compliance equilibrium that becomes increasingly difficult to reverse.Less
It is well known that tax compliance is low in Italy. Many scholars have examined Italian taxpayer behavior, mainly using experiments and surveys. However, little attention has been given to the historical circumstances that have shaped divergent taxpayer behavior in Italy. This chapter uses historical data from Italian unification through the Second Republic to assess the effects of Italy’s major formal institutions (the Church, state, and political parties) and informal institutions (clientelism) on Italian tax behavior. It argues that nineteenth-century unification and Fascism had significant repercussions for the Italian state and how Italians perceive the state. Because of this, Italians lack trust in their government and their fellow citizens, which inhibits a willingness to pay taxes. The implication then is a low-trust/low-compliance equilibrium that becomes increasingly difficult to reverse.
Eyal Zamir and Doron Teichman
- Published in print:
- 2018
- Published Online:
- June 2018
- ISBN:
- 9780190901349
- eISBN:
- 9780190901387
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780190901349.003.0014
- Subject:
- Law, Philosophy of Law
This chapter examines the implications of behavioral insights for tax design, taxpayers’ decision-making, and tax compliance. With regard to tax design, the chapter discusses policymakers’ own ...
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This chapter examines the implications of behavioral insights for tax design, taxpayers’ decision-making, and tax compliance. With regard to tax design, the chapter discusses policymakers’ own heuristics and biases, and their catering to (or exploitation of) the biased judgments of the public at large. Regarding economic decision-making, the chapter explores the dark and bright sides of tax saliency. With regard to compliance, it explains why people pay taxes, and how this compliance might be further enhanced. Finally, the chapter explains how cognitive factors affect taxpayers’ inclination to challenge tax liability. Additionally, the chapter describes the behavioral contribution to positive and normative analyses of redistribution, by shedding new light on how people form judgments about tax progressivity; the cognitive ramifications of poverty; wealth and subjective well-being; and the choice between methods and objects of redistribution. The chapter also comments on the use of taxes as a means of modifying human behavior.Less
This chapter examines the implications of behavioral insights for tax design, taxpayers’ decision-making, and tax compliance. With regard to tax design, the chapter discusses policymakers’ own heuristics and biases, and their catering to (or exploitation of) the biased judgments of the public at large. Regarding economic decision-making, the chapter explores the dark and bright sides of tax saliency. With regard to compliance, it explains why people pay taxes, and how this compliance might be further enhanced. Finally, the chapter explains how cognitive factors affect taxpayers’ inclination to challenge tax liability. Additionally, the chapter describes the behavioral contribution to positive and normative analyses of redistribution, by shedding new light on how people form judgments about tax progressivity; the cognitive ramifications of poverty; wealth and subjective well-being; and the choice between methods and objects of redistribution. The chapter also comments on the use of taxes as a means of modifying human behavior.
Jenny Jansson
- Published in print:
- 2018
- Published Online:
- September 2018
- ISBN:
- 9780198796817
- eISBN:
- 9780191838484
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198796817.003.0003
- Subject:
- Political Science, Comparative Politics, Political Economy
In the twentieth century, Sweden developed into a high-tax-rate country with extraordinary tax compliance—a unique combination. The Social Democratic Party played a crucial role in this ...
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In the twentieth century, Sweden developed into a high-tax-rate country with extraordinary tax compliance—a unique combination. The Social Democratic Party played a crucial role in this transformation and this chapter explores how the Social Democrats created and maintained the social contract in the postwar period. It is suggested that a precondition for tax compliance is the perception of being treated fairly by the state and fairness can take two forms: fairness in the tax collection procedure, and fairness in the redistribution of collected taxes. This chapter shows how the Social Democrats nurtured the perception of fairness both through the creation of a comprehensive welfare state and through gradually improving and simplifying the tax collection procedure.Less
In the twentieth century, Sweden developed into a high-tax-rate country with extraordinary tax compliance—a unique combination. The Social Democratic Party played a crucial role in this transformation and this chapter explores how the Social Democrats created and maintained the social contract in the postwar period. It is suggested that a precondition for tax compliance is the perception of being treated fairly by the state and fairness can take two forms: fairness in the tax collection procedure, and fairness in the redistribution of collected taxes. This chapter shows how the Social Democrats nurtured the perception of fairness both through the creation of a comprehensive welfare state and through gradually improving and simplifying the tax collection procedure.
Joshua D. Blank
- Published in print:
- 2019
- Published Online:
- May 2019
- ISBN:
- 9780190882228
- eISBN:
- 9780190882266
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780190882228.003.0013
- Subject:
- Law, Human Rights and Immigration
This chapter examines the relationship of corporate tax privacy and tax compliance from a new vantage point, which is called the “intercorporate perspective.” In the United States, all tax returns ...
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This chapter examines the relationship of corporate tax privacy and tax compliance from a new vantage point, which is called the “intercorporate perspective.” In the United States, all tax returns and return information of corporations are confidential. An unappreciated value of corporate tax privacy is that it can limit the pressure to pursue aggressive tax planning and reporting that corporate tax directors often face from significant shareholders, nontax managers, and even themselves. Corporate tax privacy provides the government with valuable strategic defenses by restraining the ability of a corporation’s stakeholders and agents to engage in “benchmarking” and “reverse engineering,” behaviors that would likely cause some tax directors to pursue more aggressive tax planning and reporting. Yet, at the same time, increased public access to certain corporate tax return information could enable the public to participate in informed debate and discussion of the corporate tax law and to question whether the governments is applying the tax law to corporate taxpayers effectively and fairly.Less
This chapter examines the relationship of corporate tax privacy and tax compliance from a new vantage point, which is called the “intercorporate perspective.” In the United States, all tax returns and return information of corporations are confidential. An unappreciated value of corporate tax privacy is that it can limit the pressure to pursue aggressive tax planning and reporting that corporate tax directors often face from significant shareholders, nontax managers, and even themselves. Corporate tax privacy provides the government with valuable strategic defenses by restraining the ability of a corporation’s stakeholders and agents to engage in “benchmarking” and “reverse engineering,” behaviors that would likely cause some tax directors to pursue more aggressive tax planning and reporting. Yet, at the same time, increased public access to certain corporate tax return information could enable the public to participate in informed debate and discussion of the corporate tax law and to question whether the governments is applying the tax law to corporate taxpayers effectively and fairly.
Miranda Stewart
- Published in print:
- 2019
- Published Online:
- May 2019
- ISBN:
- 9780190882228
- eISBN:
- 9780190882266
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780190882228.003.0011
- Subject:
- Law, Human Rights and Immigration
This chapter explores tax transparency in the context of previous governmental, private, and civil society initiatives about transparency of the last thirty years. There has been a particular focus ...
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This chapter explores tax transparency in the context of previous governmental, private, and civil society initiatives about transparency of the last thirty years. There has been a particular focus on transparency as a mechanism to enforce taxation of large multinational enterprises (MNEs) and to ensure tax compliance by high wealth individuals, with a specific goal of addressing tax avoidance and evasion especially through the hiding by such taxpayers of income and assets in tax havens. In addition to the promotion of transparency as a key strategy for global tax enforcement, transparency has also been aimed variously at ending corruption and abuse of power by private and public agents or entities; disciplining the fiscal actions and processes of governments by constraining spending or reducing taxes; strengthening financial and other markets; building participatory democracy; protecting human rights; supporting economic development and good governance in general; and ensuring compliance with environmental and other global policies.Less
This chapter explores tax transparency in the context of previous governmental, private, and civil society initiatives about transparency of the last thirty years. There has been a particular focus on transparency as a mechanism to enforce taxation of large multinational enterprises (MNEs) and to ensure tax compliance by high wealth individuals, with a specific goal of addressing tax avoidance and evasion especially through the hiding by such taxpayers of income and assets in tax havens. In addition to the promotion of transparency as a key strategy for global tax enforcement, transparency has also been aimed variously at ending corruption and abuse of power by private and public agents or entities; disciplining the fiscal actions and processes of governments by constraining spending or reducing taxes; strengthening financial and other markets; building participatory democracy; protecting human rights; supporting economic development and good governance in general; and ensuring compliance with environmental and other global policies.
Pierre-Hugues Verdier
- Published in print:
- 2020
- Published Online:
- April 2020
- ISBN:
- 9780190675776
- eISBN:
- 9780190675806
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780190675776.003.0003
- Subject:
- Law, Private International Law, Criminal Law and Criminology
This chapter examines the U.S. enforcement campaign against Swiss banks that facilitated tax evasion by U.S. customers and its impact on the global regime for tax information sharing. After reviewing ...
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This chapter examines the U.S. enforcement campaign against Swiss banks that facilitated tax evasion by U.S. customers and its impact on the global regime for tax information sharing. After reviewing the legal and policy issues raised by offshore tax evasion, the chapter examines how the U.S. criminal prosecution of UBS led to the release of tens of thousands of U.S. customer names to the IRS, opening an unprecedented breach in Swiss bank secrecy. The UBS case opened the way for prosecutions of other Swiss banks; negotiations with Switzerland on tax disclosure; and U.S. adoption of the Foreign Account Tax Compliance Act (FATCA), which penalizes foreign banks that fail to disclose U.S. customer accounts. While the U.S. approach initially encountered significant resistance, many countries, including major offshore centers, concluded bilateral information-sharing agreements with the United States, while some onshore jurisdictions adopted FATCA-like legislation to fight offshore tax evasion. Eventually, the U.S. approach provided a model for multilateral reform through the OECD’s Common Reporting Standard (CRS), which provides automatic exchange of account information among numerous jurisdictions.Less
This chapter examines the U.S. enforcement campaign against Swiss banks that facilitated tax evasion by U.S. customers and its impact on the global regime for tax information sharing. After reviewing the legal and policy issues raised by offshore tax evasion, the chapter examines how the U.S. criminal prosecution of UBS led to the release of tens of thousands of U.S. customer names to the IRS, opening an unprecedented breach in Swiss bank secrecy. The UBS case opened the way for prosecutions of other Swiss banks; negotiations with Switzerland on tax disclosure; and U.S. adoption of the Foreign Account Tax Compliance Act (FATCA), which penalizes foreign banks that fail to disclose U.S. customer accounts. While the U.S. approach initially encountered significant resistance, many countries, including major offshore centers, concluded bilateral information-sharing agreements with the United States, while some onshore jurisdictions adopted FATCA-like legislation to fight offshore tax evasion. Eventually, the U.S. approach provided a model for multilateral reform through the OECD’s Common Reporting Standard (CRS), which provides automatic exchange of account information among numerous jurisdictions.
Robert Mason and Safaa Amer
- Published in print:
- 2006
- Published Online:
- March 2012
- ISBN:
- 9780199211395
- eISBN:
- 9780191695803
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199211395.003.0024
- Subject:
- Law, Philosophy of Law
This chapter compares the persuasive impact of a media Sanction Threat and a Moral Appeal in order to extend the early findings of Schwartz and Orleans (1967) to learn how taxpayers process media ...
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This chapter compares the persuasive impact of a media Sanction Threat and a Moral Appeal in order to extend the early findings of Schwartz and Orleans (1967) to learn how taxpayers process media messages and what effect the information has on their thinking about tax compliance. It shows that the persuasive force of a sanction threat is undermined because people interpret the message as being there to influence others rather than themselves.Less
This chapter compares the persuasive impact of a media Sanction Threat and a Moral Appeal in order to extend the early findings of Schwartz and Orleans (1967) to learn how taxpayers process media messages and what effect the information has on their thinking about tax compliance. It shows that the persuasive force of a sanction threat is undermined because people interpret the message as being there to influence others rather than themselves.
Sven H. Steinmo (ed.)
- Published in print:
- 2018
- Published Online:
- September 2018
- ISBN:
- 9780198796817
- eISBN:
- 9780191838484
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198796817.001.0001
- Subject:
- Political Science, Comparative Politics, Political Economy
This book examines the evolution of the relationship between taxpayers and their states in Sweden, Italy, the United Kingdom, the United States, and Romania, and asks why tax compliance is so much ...
More
This book examines the evolution of the relationship between taxpayers and their states in Sweden, Italy, the United Kingdom, the United States, and Romania, and asks why tax compliance is so much higher in some countries than others. The book shows that successful states have built strong administrative capacities, tax citizens fairly and equitably, and deliver public services that are tangible to taxpayers. The main substantive chapters explore the history of a particular country demonstrating how and why these capacities were developed (or not). The book is part of a larger project entitled “Willing to Pay?” which brings together historical institutional analysis with experimental methods. A series of articles as well as a subsequent book elaborate the specific findings from the experiments undertaken in each country. These experiments, however, cannot tell us why compliance behavior differs so much across societies. The Leap of Faith offers just such an explanation by showing the history of the relationship between taxpayers and their states over time in several countries, allowing an answer to the question: Why are some countries more successful at implementation than others? The book concludes with a policy-oriented chapter written specifically with tax and revenue administrators in the developing world in mind. Drawing on lessons from the historical chapters it is argued that effective administration and equitable distribution of both taxes and public spending are keys to generating taxpayer consent.Less
This book examines the evolution of the relationship between taxpayers and their states in Sweden, Italy, the United Kingdom, the United States, and Romania, and asks why tax compliance is so much higher in some countries than others. The book shows that successful states have built strong administrative capacities, tax citizens fairly and equitably, and deliver public services that are tangible to taxpayers. The main substantive chapters explore the history of a particular country demonstrating how and why these capacities were developed (or not). The book is part of a larger project entitled “Willing to Pay?” which brings together historical institutional analysis with experimental methods. A series of articles as well as a subsequent book elaborate the specific findings from the experiments undertaken in each country. These experiments, however, cannot tell us why compliance behavior differs so much across societies. The Leap of Faith offers just such an explanation by showing the history of the relationship between taxpayers and their states over time in several countries, allowing an answer to the question: Why are some countries more successful at implementation than others? The book concludes with a policy-oriented chapter written specifically with tax and revenue administrators in the developing world in mind. Drawing on lessons from the historical chapters it is argued that effective administration and equitable distribution of both taxes and public spending are keys to generating taxpayer consent.
Vito Tanzi
- Published in print:
- 2020
- Published Online:
- November 2020
- ISBN:
- 9780198866428
- eISBN:
- 9780191898563
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198866428.003.0010
- Subject:
- Economics and Finance, Financial Economics, Public and Welfare
This chapter explores the various links that exist between growing complexity, corruption, and tax evasion. Over the past three decades corruption and tax evasion seem to have increased in many ...
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This chapter explores the various links that exist between growing complexity, corruption, and tax evasion. Over the past three decades corruption and tax evasion seem to have increased in many countries. The growing complexity of tax systems that now require thousands of pages of laws and regulations has clearly been a determining factor. Tax laws have become increasingly difficult to interpret and to comply with. This has created an important asymmetry between clever and rich individuals who have the means to hire tax experts to prepare their tax returns and the rest. This asymmetry has also convinced many taxpayers, especially in Anglo-Saxon countries, that their taxes are higher than they actually are. The complexity and its impact on the taxpayers is likely to have been a contributing factors to the growing income inequality that has characterized recent years.Less
This chapter explores the various links that exist between growing complexity, corruption, and tax evasion. Over the past three decades corruption and tax evasion seem to have increased in many countries. The growing complexity of tax systems that now require thousands of pages of laws and regulations has clearly been a determining factor. Tax laws have become increasingly difficult to interpret and to comply with. This has created an important asymmetry between clever and rich individuals who have the means to hire tax experts to prepare their tax returns and the rest. This asymmetry has also convinced many taxpayers, especially in Anglo-Saxon countries, that their taxes are higher than they actually are. The complexity and its impact on the taxpayers is likely to have been a contributing factors to the growing income inequality that has characterized recent years.