Taxation in the 21st Century

Taxation is a core function of the state. It is a crucial lever in the fight against income inequality, and politically highly salient as shown by the recent wave of tax scandals. In the public eye, who pays or doesn’t pay is a crucial indicator for social equity. Yet, governments in the developed world struggle to ensure that everyone pays their fair share. The taxation of capital, in particular, illustrates how globalization puts the prerogatives of the nation-state under stress. While corporations control worldwide value chains, the taxman’s reach ends at the border. In response, developed and emerging economies increasingly cooperate to fight tax abuse. At the same time, developing countries struggle to implement basic tax policies. Informality, low state capacity, and political institutions biased towards elites limit their ability to raise revenue for basic public goods. Despite the importance of taxation in political conflict, when compared to the number of studies focusing on the spending side of public budgets, the state's revenue remains an understudied topic in political science. From a theoretical perspective, this amounts to woeful neglect. In fact, the analysis of tax policy and politics allows for important theoretical insights in international and comparative political economy, political sociology, and political theory. For instance, scholars in the field debate the respective importance of expertise and state power in international organizations. They apply historical institutionalist and evolutionary theory to identify path dependencies and transformative change in national and international tax systems. A growing literature strand studies how norms of fairness and reciprocity influence the behavior of taxpayers and tax professionals, while political theorists draw on the field to identify normatively desirable international institutions. From an empirical perspective, we see the emergence of new datasets measuring tax policies or outcomes historically or globally as well as exciting new micro data. Against this background, this Section shall provide the growing community of tax policy scholars with an opportunity to forge tighter links, discuss the field’s current state, and define its future research agenda. Moreover, the Section shall present the field’s many theoretical, empirical, and methodological contributions to a wider political science audience and enable further debate across research areas.