Laura Seelkopf

Happy taxation: increasing tax compliance through positive rewards?

Can governments increase tax compliance by rewarding honest taxpayers? We conducted a controlled laboratory experiment comparing tax compliance under a “deterrence†baseline with tax compliance under two “reward†treatments: a “donation†treatment giving taxpayers a say in the spending purposes of their payments and a “lucky†treatment giving taxpayers the (highly unlikely) chance of winning a lottery. The reward treatments significantly affected tax behaviour but not in a straightforward manner. Although female participants altered their behaviour as expected and complied somewhat more, men strongly reacted in the opposite manner: they evaded a much higher percentage of taxes than under the baseline. Apparently, there is no one-size-fits-all approach to boost tax compliance.

Did they learn to tax? Taxation trends outside the OECD

ABSTRACT We map trends of tax policy change in developing countries and transition economies since the 1980s, compare them to tax trends in the advanced Western democracies and review some of the explanations offered by the contributions to this volume. We find that non-Western countries follow the lead of Western countries in some important respects but not in others. While non-Western countries brought their general revenues closer to Western levels and copied important features of Western consumption taxation including higher value added tax revenues and lower revenues from trade taxation, they failed to emulate the hallmark of 20th-century Western taxation: a strong and progressive personal income tax. The taxation trends are closely associated with socio-economic changes (as summarized by GDP per capita) and structural factors (as summarized by country size). Yet the impact of political institutions on taxation is non-linear and complex.

The Global Emergence of Social Protection

Comparative welfare state research is directed mainly toward the development of welfare states in advanced democracies, although the majority of people live outside the OECD and often face graver social risks arising from poverty and starvation. To secure a minimum standard of living, nearly all countries have introduced social programs to protect their citizens. Yet the timing of when governments take on the responsibility of providing social protection varies decisively across the world. Using data for 177 territories and independent states over the period from 1820 to 2013, we illustrate how social security legislation has emerged throughout the world. Although we find that the patterns and pathways vary strongly between different regions, the evidence shows that the proliferation of social protection is a transnational event: regional diffusion and membership in the International Labour Organization matter irrespective of the regional and temporal context.

Dictators Don't Compete: Autocracy, Democracy and Tax Competition

ABSTRACT It pays to be a tax haven. Ireland has become rich that way. Why do not all countries cut their capital taxes to get wealthy? One reason is structural. As the standard model of tax competition explains, small countries gain from competitive tax cuts while large countries suffer. Yet not all small (large) countries have low (high) capital taxes. Why? The reason, we argue, is political. While the standard model assumes governments to be democratic, more than a third of countries worldwide are non-democratic. We explain theoretically why autocracies are less likely to adjust to competitive constraints and test our argument empirically against data on the corporate tax policy of 99 countries from 1999 to 2011.

Trade liberalization and the global expansion of modern taxes

ABSTRACT For a long time, governments relied heavily on trade taxes as the main source of public finance, and for some countries, mainly less developed ones, they still account for a large share of revenue. Yet, with trade liberalization, governments have been forced to abandon these easy-to-collect taxes and to adopt modern hard-to-collect taxes, mainly internal income and consumption taxes. Surprisingly, we know little about how governments across the world have addressed this common challenge. In this paper, we analyze the rise of the most important present taxes: the personal and corporate income tax, the general sales tax and the value-added tax. Based on a self-coded dataset, we provide a historical-descriptive outline of the expansion of modern taxes since 1842 and test the effect of trade liberalization on the probability to adopt hard(er)-to-collect taxes. While trade is an important determinant for the legislation of modern taxes, we find that its influence is not universal but depends on the tax type. Only the personal income tax and the value-added tax have served as a revenue substitution to trade taxes, while the general sales tax and the corporate income tax were rather fueled by other factors such as spending pressures.

Did the Competition State Rise? Globalization, International Tax Competition, and National Welfare

Does economic globalization erase domestic policy autonomy? Globalization theorists argue that it does, globalization-skeptics counter that it doesn’t. Reality, of course, is more nuanced. Analyzing tax policy in three country groups – OECD member states, tax havens, and least developed countries – we show that the process of economic integration has indeed constrained national policy autonomy as assumed by globalization theory. Across all three country groups, governments have adjusted – to varying degrees – to international tax competition by de-taxing capital. However, in contrast to globalization theory, we find that tax competition has ambiguous effects on welfare state capacity, lowering it in big and poorly governed countries, yet increasing it in small, well-governed ones. Finally, we show that the group of OECD member states is least affected by tax competition. The main beneficiaries and victims of economic globalization are non-OECD countries.

Taxation and inequality : how tax competition has changed the redistributive capacity of nation-states in the OECD

Tax policy is of central importance to every state. Without tax revenue, all other government policies, including welfare policies, are bound to fail. In addition to providing the financial basis for the welfare state, the tax system is potentially the most powerful instrument for income redistribution. In this contribution we shed light on the effects of tax competition on economic inequality by mapping the co-development of the changing tax systems and income (re)distribution since the 1980s. We argue that governments’ tax strategies and their effect on inequality are much more complex and heterogeneous than is often acknowledged. Despite the common constraint emanating from global capital markets, governments still have room to manoeuver. The extent to which OECD governments have used this room, however, varies considerably.

Steuern in der Vergleichenden Politikwissenschaft

Dieser Beitrag erortert Grundlagen der Steuerpolitik. Er definiert die Zwecke der Besteuerung, unterscheidet die wichtigsten Steuertypen, diskutiert generelle steuerpolitische Entwicklungen der letzten 50 Jahre und vergleicht die nationalen Steuersysteme von Landern innerhalb und auserhalb der OECD. Weitere Themen sind die Bestimmungsfaktoren nationaler Steuerpolitik und die Auswirkungen der Besteuerung auf Umverteilung und Wirtschaftswachstum.