Tax Evasion And The Rule Of Law In Latin America

"Compares the tax systems in Argentina and Chile. Examines differences in law abidance between the two countries and the effectiveness of legal enforcement"--Provided by publisher.

Few tasks are as crucial for the future of democracy in Latin America—and, indeed, in other underdeveloped areas of the world—as strengthening the rule of law and reforming the system of taxation. In this book, Marcelo Bergman shows how success in getting citizens to pay their taxes is related intimately to the social norms that undergird the rule of law. The threat of legal sanctions is itself insufficient to motivate compliance, he argues. That kind of deterrence works best when citizens already have other reasons to want to comply, based on their beliefs about what is fair and about how their fellow citizens are behaving. The problem of "free riding," which arises when cheaters can count on enough suckers to pay their taxes so they can avoid doing so and still benefit from the government’s supply of public goods, cannot be reversed just by stringent law, because the success of governmental enforcement ultimately depends on the social equilibrium that predominates in each country. Culture and state effectiveness are inherently linked. Using a wealth of new data drawn from his own multidimensional research involving game theory, statistical models, surveys, and simulations, Bergman compares Argentina and Chile to show how, in two societies that otherwise share much in common, the differing traditions of rule of law explain why so many citizens evade paying taxes in Argentina—and why, in Chile, most citizens comply with the law. In the concluding chapter, he draws implications for public policy from the empirical findings and generalizes his argument to other societies in Africa, Asia, and Eastern Europe.

Inequality and taxation are fundamental problems of modern times. How and when can democracies tax economic elites? This book develops a theoretical framework that refines and integrates the classic concepts of business's instrumental (political) power and structural (investment) power to explain the scope and fate of tax initiatives targeting economic elites in Latin America after economic liberalization. In Chile, business's multiple sources of instrumental power, including cohesion and ties to right parties, kept substantial tax increases off the agenda. In Argentina, weaker business power facilitated significant reform, although specific sectors, including finance and agriculture, occasionally had instrumental and/or structural power to defend their interests. In Bolivia, popular mobilization counterbalanced the power of economic elites, who were much stronger than in Argentina but weaker than in Chile. The book's in-depth, medium-N case analysis and close attention to policymaking processes contribute insights on business power and prospects for redistribution in unequal democracies.

The Latin American countries are introducing anti-avoidance rules to follow the global trend of tackling tax avoidance: similarities and differences in the approach taken by different countries are considered here. This analysis provides a summary of the main topics identified in connection with the establishment of tax anti-avoidance rules in Latin American countries, considering the situation in a representative group of countries such as Argentina, Brazil, Chile, Colombia, Mexico and Peru.

Challenges the distorted hegemonic accounts of Latin American law and reveals their geopolitical and economic consequences in the world today.

Analysis of the principles which form the basis of the development of tax legislation in Latin American countries and a detailed review, with numerous theoretical comments, of the constitutional and theoretical framework of tax litigation in Latin America.

An analysis of how respect of the rule of law varies across countries that share a common historical heritage and similar socio-economic challenges. >