Miranda Stewart

Global Trajectories of Tax Reform: Mapping Tax Reform in Developing and Transition Countries

Tax reform has been a significant part of economic development and structural adjustment projects for developing and transition countries since World War II. While much work has been done critiquing these programs and in particular the work of institutions such as the International Monetary Fund and the World Bank, there has not been a detailed examination of the content and role of tax reform projects. This article aims to begin to fill that gap. It examines tax reform projects in developing and transition countries in the context of the history of economic development and the contemporary context of economic globalization. The first goal of the article is descriptive: to map the processes and agencies engaged in tax reform since World War II. The second goal is analytical: to begin a critical examination of the discourse of tax reform. The article examines the changing way in which tax reform discourse has viewed the role of the state in economic development of its people. It also examines the changing way in which tax reform discourse has addressed issues of poverty, inequality and redistribution. It concludes with some suggestions for a new direction for tax reform in developing and transition countries.

Tax, Law and Development

Comprising original essays written by top legal scholars, this innovative volume is the most comprehensive collection to date of independent academic work exploring the relationship between tax, law and development. Contributors cover a range of tax issues, drawing on economic, political, social, and institutional perspectives to offer a comprehensive view of how tax laws affect and are affected by human economic development.

Tax Policy Transfer to Developing Countries: Politics, Institutions and Experts

Tax ideas have always been transferred across borders. However, since the early 1980s, the transfer of tax ideas has had an increased global significance. Many have identified the 1980s as a global ‘decade of tax reform’.3 To some, this signalled the generation of global tax norms,4 or a ‘remarkable consensus’ of experts reflecting a ‘virtual revolution in applied tax policies in developed, developing and transition economies’.5 Others have suggested that ‘the tax systems of the major developed countries, if not all countries, will increasingly tend to resemble each other’.6 These global developments in tax reform were spurred by two significant shifts in the broader economic context. First, the 1980s was ‘a decade of economic crisis for many developing countries and slow growth for industrialized countries’.7 Second, and partly in response to this crisis, the 1980s saw the ascendance of a neo-liberal paradigm which advocated export-led growth and a free market economy, understood as a reduction of the engagement of the state in economic development. Many developing countries undertook structural adjustment reforms under this new paradigm, as a condition of loans and aid from the International Monetary Fund (IMF), World Bank and major country donors such as the United Kingdom.

Introduction: Tax, Law and Development

This book is the first collection of independent legal scholarship exploring the relationship between tax, law and the quest for human development. While acknowledging fully the challenge of tax competition in a global economy, this book rejects calls to end taxation of mobile capital even if this may be perceived to be a theoretical economic inevitability due to the difficulty of collection in an uncooperative environment. New approaches to economic development suggest we must abandon – or significantly downplay – the dominant normative approaches to tax policy, replacing these with contextualized, diverse, partial and incremental tax law reform approaches that take seriously the legal, social and political context. The innovative scholars who contribute to this book examine the role of law in national and international tax regimes across a range of topical tax issues, from the perspective of countries including China, Brazil, South Africa, India and the United States. Chapters discuss the reform of tax laws that are central to economic globalization, including tax incentives for foreign direct investment, their relationship with tax treaties and other international tax law, the problem of how to address fundamental equity concerns, and institutions of budgeting, tax law making and administration in a global era.

Gender Equity in Australia's Tax System

In 2008, the Australian Labor government announced a review of Australia’s Future Tax System which reports at the end of 2009. The Review has a broad remit to examine Australia’s federal and state tax and transfer (welfare) systems. Gender issues are at play in some crucial parts of the Review analysis, but are absent from other parts. The Review’s discussion of workforce participation seems to take seriously the impact of the tax-transfer system on women’s work choices. However, its analysis of the taxation of capital and savings largely ignores gender. This paper analyses the gendered dynamics of tax policy in the Review with a focus on the income tax. In particular, it examines the Review’s approach to efficiency and equity in respect of two issues that have important implications for women: the well-known debate about the appropriate tax-transfer unit and the less-visible issue of women’s ability to accumulate assets over their lifetime.

Redistribution between Rich and Poor Countries

The topic of redistribution between rich and poor countries opens a can of worms. This paper first inquires into what we mean by some of these words and second, considers the role of taxation in redistribution. It briefly considers the various modes of redistribution to address poverty and inequality, including the role of taxation, within a country before turning to consider modes of redistribution between rich and poor countries. The paper then turns to consider whether we are asking the right question. Should the question, really, be about redistribution between rich and poor people? In an increasingly global and digital era, how might we reconsider the role of taxation in achieving this? The paper briefly touches on state-based and cosmopolitan theories of international distributive justice, before considering whether we need to unpack the very concept of the country, nation-state, or government to achieve the transnational provision of public goods and redistribution between rich and poor.

Tax, Social Policy and Gender: Rethinking equality and efficiency

With female labour force participation having increased substantially over the past few decades, and continuing concerns about population ageing in the future, policies with positive labour supply incentives, aimed at increasing participation further for women, remain high on the agenda. Thus, an important question among policymakers should be: how well are the policies that are currently in place in Australia performing with regard to encouraging labour force participation? Rather than investigate the different policies in place in isolation, this chapter sets out to examine all social policies and tax and transfer policies together. An important question is whether policy goals and policy design are consistent, and whether these are consistent across the range of policies in the relevant policy area. To give an example, are family payment policies, child care subsidy policies and income tax policies working together to achieve the same aims, or are they encouraging families in different directions?Tax, Social Policy and Gender presents new research on entrenched gender inequality in a comparative framework of human rights and fiscal sustainability. Ground-breaking empirical studies examine unequal returns to education for women and men, decision-making about child care by fathers and mothers, the history and gendered effects of the income tax and family payments, and women in the top 1 per cent. Contributors demonstrate how Australia’s tax, social security, child care, parental leave, education, work and retirement income policies intersect to compound gender inequality.

Gender inequality in Australia’s tax-transfer system

During the 2016 Australian federal election, leaders on both sides of politics sought the ‘women’s vote’. Prime Minister-elect Malcolm Turnbull for the Liberal–National Coalition Party (LNP) declared himself a feminist, affirming equal opportunity for women and acknowledging that ‘women hold up half the sky’ (Grattan 2016). Opposition Leader Bill Shorten, of the Australian Labor Party (ALP), said on the eve of the election campaign that a Labor Government would champion ‘the march of women to equality’ (Shorten 2016).1 Yet, in spite of these political commitments, there remain significant tensions and contradictions in core federal economic and fiscal policy affecting women and gender equality.

The Tax State, Benefit and Legitimacy

This Working Paper traces the discursive history of the principles of benefit and legitimacy of taxation from the late eighteenth century to the present day. Drawing on the work of scholars from Adam Smith through Richard Musgrave to public choice theorists, it is observed that successful tax states – especially democratic states – seem to depend on both an acceptance by taxpayers of benefits derived under government and a fiscal constitution that limits taxing power. The benefit theory in the context of legitimate government has strengths that are lost if a purely technocratic, narrow economic analysis of public goods is taken. However, both benefit and legitimacy of government are important concepts in the current era of globalisation and fiscal authority, which pose significant challenges to democratic governments. The author argues for a renewed focus on principles of benefit and legitimacy of taxation to fund successful democratic tax states in the global era.

Taxation Policy and Housing

The taxation of housing is complex because housing may be included in a number of different tax bases. Housing is also a complex good accessed by individuals in differing capacities: as homeowners, landlords, and tenants. Taxes that impact on housing include income tax, consumption taxes such as value added tax, wealth and inheritance taxes, land tax, rates or property tax, conveyance duties, and developer levies. Important factors determining the impact of these taxes include the definition of the tax base, the tax rate or schedule, and the valuation method used. There are a variety of tax expenditures (exemptions or concessions) for some housing tenures in most jurisdictions. The mix of taxes and tax expenditures can affect the housing tenure choices of households and the availability, affordability, and environmental sustainability of housing. The key tax policy criteria for assessing tax laws in the area of housing are equity, efficiency, simplicity, and sustainability.