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This chapter reviews international practice in the administration of tax regimes and the implementation of tax collection. It analyses claims by investors that particular state actions in tax administration and enforcement have violated various treaty rights, including the guarantee of fair and equitable treatment, restrictions on expropriation, and the violation of particular commitments covered by treaty umbrellas clauses. It surveys general patterns in state practice to suggest a baseline of acceptable actions against which investor claims can be assessed.

This chapter provides unique evidence of substantial behavioral responses of wealthy taxpayers to charitable giving deductions in a very long time perspective, using original historical data collected from tax records. It then investigates the anatomy of this response. Using the tightening of the rules regulating private foundations implemented in 1969 as a natural experiment on tax enforcement in the US, it shows that tax cheating and tax optimization explain a large fraction of the elasticity of charitable giving of the very wealthy. The chapter develops a model of tax cheating and shows that tax cheating is a first-order phenomenon to assess optimal tax policies for charitable contributions.

This chapter reviews recent economic research in tax administration, compliance, and enforcement and discusses the implications of the results of this research for realistic policy options. It first discusses the methodologies being used to learn about these issues: randomized field experiments, bunching analysis with respect to kinks and notches in tax schedules and enforcement policies, regression discontinuity designs, and analysis of traces of true income and evasion, as well as the wider availability of administrative data. It then summarizes what we have learned about the extent and nature of evasion, including the impact of deterrence-based policies such as auditing and third-party information reporting, public disclosure, and non-deterrence policies aimed at reducing tax evasion. It concludes with some observations about tax policy based on the recent academic literature and policies in place in other countries.

How should we respond to the ethical challenge of tax competition? Some existing proposals, such as capital controls and unilateral measures to protect one’s tax base, including unilateral attempts to redefine the corporate tax base, fall short of being able to effectively protect fiscal autonomy. Instead, the chapter proposes two principles of international tax justice. First, the membership principle, which states that individuals and corporations should pay taxes in the state where they are members. Second, the fiscal policy constraint, ruling out fiscal arrangements that are both based on strategic intent and have a collectively negative outcome. An international tax organization (ITO) should be created to enforce these principles of global background justice, notably by harmonizing the tax rules—but not the tax rates—that different states use.

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.

Several decades of empirical research into the economic role of corporate social responsibility have yielded inconclusive results due to a lack of identification strategies. We propose the use of quasi-experiments to address fundamental questions such as how much of corporate social responsibility spending is agency related and how much is driven by strategic profit considerations. In contrast to field studies or experiments that are open to the critique of extrapolative relevance, we use the 2003 Dividend Tax Cut in a quasi-experiment to identify the portion of corporate goodness that is driven by agency motives. We then isolate a specific channel through which strategic corporate goodness works using the recent enforcement of the Foreign Corrupt Practices Act.