The Politics of Taxation

Taxation has been the focal topic of economist for centuries. Yet, as states and markets are highly entrenched, we need to understand taxation not only from an efficiency perspective but also under the lens of its distributive consequences, moving the analysis of the politics of taxation to the core for political economists and political scientists. Tax revenue is vital for public goods provision and a defining element of democratic representation. But different types of tax instruments can create inequality and lead to distributive conflict, regime change or destroy fiscal solidarity. Countries in the Global South struggle with a narrow tax base and an extensive informal sector, whereas advanced economies face political contestation over fiscal austerity, green taxes, gender taxation and the viability of embedded liberalism. This Workshop brings together new evidence on the politics of taxation, taking stock of well-functioning tax instruments and discussing possibilities to improve fiscal solidarity and the social contract from a political science perspective. Starting with the micro-foundation and building upon the rich literature from behavioural economics, which factors increase tax compliance beyond deterrence and monetary incentives? What improves the social fiscal contract, especially in the Global South? From a historical and macro-comparative perspective, what explains the evolution of the modern tax state and why some tax systems are more progressive than others? From the perspective of domestic policymaking, what are the key determinants of tax reforms and new tax instruments such as green taxes? And finally, what are the distributive implications of new tax instruments?

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1: Why do people pay taxes beyond deterrence?
2: Which factors improve fiscal solidarity and foster the social fiscal contract?
3: What explains the development of the modern tax state and why some tax systems are more progressive than others?
4: What are the key determinants of tax reforms and the introduction of new tax instruments?
5: What are the distributive implications of new tax instruments (e.g. green taxes, gender taxes, etc.)?

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