Social Science Research Council

"The Distributional Politics of Tax Reform in Argentina, Bolivia and Chile"

Latin America is the most unequal region in the world, yet economic elites are under-taxed. Improving the region's weak tax systems and enhancing state resources for investment in human capital and poverty alleviation depend significantly on extracting more revenue from upper income groups. However, taxing Latin American elites is a difficult challenge, given the power they exercise and their resistance to redistribution. This project explores the distributional politics of taxation in Latin America. Through what kinds of political processes are decisions made to allocate the tax burden across society? When will politicians propose measures to increase taxation of elites, and when might they succeed? Which groups mobilize in response to different tax measures, and how do they attempt to influence tax policy? These questions will be addressed through research on Argentina, Bolivia, and Chile, countries chosen for variation on theoretically important institutional and organizational variables, and in types and fates of proposed progressive tax measures. In each country, a subset of major tax initiatives since about 1990, along with an additional set of proposed measures that would increase elite tax burdens, will be studied in detail. Process-tracing and comparisons of tax measures over time within and across countries will provide leverage for causal assessment. By identifying mechanisms perpetuating under-taxation of elites and factors that may facilitate change, this project seeks to contribute to an interdisciplinary research program addressing Latin America's persistent inequality, a problem that hinders prospects for both growth and democratic stability throughout the region.