All governments require revenue, and domestic taxes are the primary means for generating it. Yet both the size and shape of taxation vary significantly across countries and have been transformed over time. What explains variation in domestic taxation? To answer this question, recent scholarship on taxation has focused on the politics of taxation as a tool for redistribution. This has led to a wide body of research on the fiscal impact of taxation and on the introduction, evolution, and variation in direct and progressive tax regimes, particularly the income tax. Yet the focus on taxation as a redistributive tool yields a puzzle, as more progressive tax systems tend to be found where redistribution is in fact the lowest. Explanations of this paradox often center on the impossibility of high and progressive taxes on capital in the context of international economic integration. Not as well studied are taxes other than the taxation of income, and the deliberate politics of nonfiscal, regulatory, and incentive effects of different tax choices. Methodologically, problems of endogeneity are ubiquitous in the study of tax policy choices, but more sophisticated experimental work is well underway in research on individual preferences for taxation.
Article
Tony Ingesson
Military service and political participation have links going back to Ancient Greece and the Roman Republic. While bearing arms was for most of history a privilege reserved for stakeholders in the state, universal conscription later turned this notion on its head in the late 19th and early 20th centuries. Instead of selecting stakeholders to serve as soldiers, the soldiers themselves became stakeholders as the right to vote was extended to include them in the democratic polity in several states. This quid pro quo arrangement paved the way for the extension of the franchise to large portions of the male population who had previously been excluded from voting by property qualifications. In some cases, it also resulted in limited franchise extensions for female voters.
For minorities, conscription can be a curse or a blessing, depending on their ability to leverage it as a bargaining tool for citizenship or increased status. Some, such as the Druze in Israel, have been relatively successful, while the same strategy was less fruitful for African American veterans of World War I.
While conscription has been criticized by economists, who tend to regard it as a form of taxation, for being unfair and inefficient as a recruitment tool for the armed forces, it has also been seen as a political instrument for promoting democracy, social cohesion, and as a safeguard against military coups. Many of these suggested benefits have failed to hold up to empirical scrutiny, but conscription remains a viable alternative for small states in urgent need of military manpower in times of heightened tensions, where some states have in the latter half of the 2010s reintroduced the draft after having suspended it.
The growing tensions and deteriorating security situation in some parts of the world, such as the Baltic Sea region, have once more put conscription on the agenda. Consequently, an understanding of conscription’s role in relation to citizenship and democracy is as relevant as ever.
Article
David Doyle
The battle over state redistribution, and the means to pay for welfare transfers, lies at the heart of contemporary political economy. This has been one of the central plinths of political science research on the advanced industrial democracies, and we now have a good understanding of the dynamics of spending and taxation in these countries, rooted in the power of the left and labor movements, together with the embedded liberal compromise. These explanations, however, struggle to explain tax and spending outcomes across Latin America. This is largely because the pressures of globalization, rather than embedded liberalism, drive efficiency concerns in Latin America; across the region, the left often behaves in unanticipated ways, and redistribution comes in many forms. These effects are compounded by the power of business interests across the region and the heterogeneity of voter preferences when it comes to spending and taxation. More research is needed on both the macro and micro level dynamics of taxation and social spending in Latin America.
Article
Ryan J. Tonkin
Taxation is perhaps the most important mechanism for realizing a conception of distributive justice. It also confronts citizens with the coercive power of the state in an immediate way. Yet there exists no widely accepted theory of tax justice. This is partly explained by the protean character of modern taxation: taxes allocate resources, create incentives, fund public goods, address collective action problems, and more. As well, claims about fair taxation always implicate technical and practical considerations alongside their normative dimensions. Historically, experts in the technical and practical (such as economists and policymakers) have more readily engaged this tangle of considerations than experts in normative theory (such as philosophers), although that is beginning to change. The results of the engagement are fragmentary and often inconsistent. However, the fragments can be roughly sorted into two broad approaches to questions of tax justice.
The first approach assesses taxation as an institutional interference with a pretax allocation of resource entitlements. It conceives of the collective tax burden as a social invoice that must be fairly distributed across that pretax allocation. Thus, various principles of distribution follow: the tax burden should be distributed according to ability to pay, or benefits received, and so on. But the second approach argues that the project of fairly distributing the tax burden is misconceived for two reasons. First, it is myopic in its assessment of particular taxes without considering how those taxes fit within the broader institutional arrangement. Second, it presumes an existing allocation of resource entitlements with which taxes interfere. In a modern state, however, taxes are antecedent to, and so already presumed by, any allocation of entitlements. Instead of attending to a fair distribution of an illusory tax burden, the second approach conceives of taxation as constructive social architecture. Accordingly, it holds that taxes should be assessed in terms of their contribution to a distribution that satisfies the appropriate principles of justice, whatever those principles may be.
Article
Omar Sanchez-Sibony
While Latin America has augmented its tax effort significantly since 2000, tax revenues remain below the global norm given the region’s income per capita. Indirect taxes constitute a disproportionate portion of overall revenues, a manifestation of the political and technical difficulties inherent to taxing Latin American elites. Several structural factors characterizing the region hamper revenue collection, including mediocre economic performance, a large informal sector, high income inequality, the rentier status of some economies, and weak state infrastructural power, alongside feeble tax administration agencies, among other factors.
Political scientists have deployed three main paradigms for understanding tax policy outcomes and tax reform: interest-based, ideational, and institutional accounts. Interest-based accounts, centered on the political power and resources that interest groups can wield, provide a useful first approximation to understanding tax outcomes; nevertheless, this theoretical lens under-predicts the prevalence of observed tax reform in Latin America. The ideational lens is indispensable to account for the overall contours of the taxation system in the region, because tax reform was informed by the neoliberal paradigm. In recent years, moderately progressive tax policy changes have been enacted by left- and right-wing governments alike, reflecting the increasing centrality of addressing inequality (the vertical equity objective) in the realm of ideas. Democracy, qua a system of institutions geared to enhance the public interest, has not spawned the taxation systems that the median-voter theory predicts in the context of high societal inequality, however. Democracy has not fulfilled the taxation and fiscal policy expectations placed upon it. Nonetheless, structural factors may yet produce a salutary fiscal result. The recent increase in the size of the region’s middle class has translated into greater societal pressures to enhance the quality and quantity of public services, which may portend the development of a more encompassing state–society fiscal pact.
