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Going Where the Money Is: Strategies for Taxing Economic Elites in Unequal Democracies

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  • Fairfield, Tasha

Abstract

How can policymakers circumvent obstacles to taxing economic elites? This question is critical for developing countries, especially in Latin America where strengthening tax capacity depends significantly on tapping under-taxed, highly-concentrated income and profits. Drawing on diverse literatures and extensive fieldwork, the paper identifies six strategies that facilitate enactment of modest tax increases by mobilizing popular support and/or tempering elite antagonism. Case studies from Chile, Argentina, and Bolivia illustrate the effect of these strategies on the fate of tax reform initiatives. The analysis builds theory on tax politics and yields implications for research on reform coalitions and gradual institutional change.

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  • Fairfield, Tasha, 2013. "Going Where the Money Is: Strategies for Taxing Economic Elites in Unequal Democracies," Working Papers 13735, Institute of Development Studies, International Centre for Tax and Development.
    • Handle: RePEc:idq:ictduk:13735
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    2. von Schiller, Armin, 2015. "Party System Institutionalization and Reliance on Personal Income Tax in Developing Countries," IDB Publications (Working Papers) 7351, Inter-American Development Bank.
    3. Tasha Fairfield, 2015. "La economía política de la reforma tributaria progresiva en Chile," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 17(32), pages 129-156, January-J.
    4. Post, Alison E. & Murillo, María Victoria, 2016. "How Investor Portfolios Shape Regulatory Outcomes: Privatized Infrastructure After Crises," World Development, Elsevier, vol. 77(C), pages 328-345.
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    6. Hochachka, Gail, 2021. "Integrating the four faces of climate change adaptation: Towards transformative change in Guatemalan coffee communities," World Development, Elsevier, vol. 140(C).
    7. von Haldenwang, Christian, 2020. "Digitalising the fiscal contract: An interdisciplinary framework for empirical inquiry," IDOS Discussion Papers 20/2020, German Institute of Development and Sustainability (IDOS).
    8. Flores-Macías, Gustavo A., 2018. "Building support for taxation in developing countries: Experimental evidence from Mexico," World Development, Elsevier, vol. 105(C), pages 13-24.
    9. Jonathan L. Weigel & Elie Kabue Ngindu, 2023. "The taxman cometh: Pathways out of a low‐capacity trap in the Democratic Republic of the Congo," Economica, London School of Economics and Political Science, vol. 90(360), pages 1362-1396, October.
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