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Maximizing Tax Revenue While Minimizing Political Costs

Published online by Cambridge University Press:  28 November 2008

Richard Rose
Richard Rose
Affiliation:
Public Policy, University of Strathclyde
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Abstract

Tax revenue is a function of laws and administration as well as economic activity. Four different theories purport to explain revenue-raising in contemporary Western nations: universal abstractions about economic systems; national culture: tax-specific characteristics; avoiding political costs through political inertia. OECD data on taxation in Western nations since 1955 show that national tax systems do not have sufficient in common to validate universalistic generalizations Tax-specific influences can be identified only for a few major sources of revenue. The inertia persistence of substantial national distinctiveness reflects a non-decision making approach to tax policy by politicians. The strategy is to rely primarily upon revenue-buoyant taxes authorized by past legislation rather than risk the political blame for introducing new taxes to raise large amounts of needed additional revenue.

Type
Articles
Information
Journal of Public Policy , Volume 5 , Issue 3 , August 1985 , pp. 289 - 320
Copyright
Copyright © Cambridge University Press 1985

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