The discrepancy between "ideal" and "real world" international tax rules. What drives politicians when making the rules?
AbstractThe current international tax system diverges greatly from a theoretically ‘‘optimal’’ tax system. One reason for this discrepancy may be that politicians strive for other objectives rather than making tax rules that comply with the theoretical concepts of optimal taxation. In this article, I overview the approaches used in the economic and legal literature to explain the motivations of policymakers involved in international taxation and contrast them with ‘real world’ observations. The article illustrates that the making of international tax policy is affected by various factors: the structure of the international tax system, domestic pressure groups, along with self-interested politicians and bureaucrats. Considering the complexity of the conditions under which international tax policy is made, it is not astonishing that international tax law deviates significantly from the principles characterizing ‘‘ideal’’ taxation.
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Bibliographic InfoArticle provided by Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore in its journal Rivista Internazionale di Scienze Sociali.
Volume (Year): 120 (2012)
Issue (Month): 4 ()
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international taxation; efficiency norms; Public Choice; Game Theory;
Find related papers by JEL classification:
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
- K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
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