1st Edition

Reducing Inequality in Latin America The Role of Tax Policy

    170 Pages
    by Routledge

    170 Pages 20 B/W Illustrations
    by Routledge

    This book examines the role of tax policy in the incidence of socio-economic inequality. With a focus on Latin American, the author demonstrates that while inequality has decreased remarkably in the last decade – during the very period in which inequality was increasing almost everywhere else in the world – this reduction cannot be attributed to a better use of tax policy. Offering both quantitative and qualitative reviews of tax policies pursued by Argentina, Chile, Colombia, Mexico and Peru over the last two decades, Reducing Inequality in Latin America contends that these countries continue to make insufficient use taxation measures in combating startlingly high levels of inequality. Drawing on legal texts, interviews with researchers and experts in the field, and official monetary statistics to obtain a complete picture of how discretionary tax policy has been pursued in the region, this volume engages with a range of recent economic theories to argue for the importance of using the tax system to reduce inequalities, whilst also offering new methods for measuring tax policy in subsequent research. As such, it will appeal both to scholars of social science and policy makers with interests in economics, social inequality, public policy and international political economy.

    List of Figures

    List of Tables

    List of Annexes

    Part I: Taxation and the inequality decline in Latin America

    1. Introduction. Taxation and the inequality decline in Latin America

    Part II: The Taxation and Inequality Link

    2. The empirics of taxation and inequality

    3. Public finance, taxation and inequality

    4. Macroeconomics, taxation and inequality

    5. Political economy, taxation and inequality

    Part III: A methodological approach to measuring pro-equity tax policy

    6. Measuring tax policy over time

    7. My approach: a structural tax revenue analysis

    8. A quantitative investigation of taxation in five Latin American countries

    9. The narrative approach towards five Latin American countries

    Part V: Tax policy before, during and beyond the Latin American inequality

    10. Conclusion




    Maria Fernanda Valdés Valencia is an independent researcher and program coordinator for the Friedrich Ebert Stiftung in Bogotá.

    'This book addresses a key topic for Latin America. Despite progress, inequality remains very high and tax policy could play a more prominent role in improving the income distribution. Those interested in the technical and political dimensions of this debate, will find herein a comprehensive and passionate view of how taxation can become a more effective development tool in the region.' - Christian Daude, Senior Economist - Adviser to the Chief Economist, Organisation for Economic Co-operation and Development, France

    'This book addresses in a clear and innovative way critical questions that have concerned for a long time those interested in Latin American inequality: what role has tax policy played to mitigate inequality, and how can we enhance that role going forward. Maria Fernanda Valdés has created an important resource for policy analysts, professors and researchers, civil society and students alike. For those interested in this topic, this is a must read.' - José Antonio Ocampo, Professor, Columbia University, U.S.A

    'This book addresses two key questions: if tax policy contributed to the recent decline in inequality observed in several countries in Latin America and if equity considerations have played a role in the design of tax policies in the region. Its negative answer to both questions is a call of attention to policy makers that are now facing the need to enact tax reforms to partially compensate for the reduction of commodity-driven fiscal revenues. The book is also a rich source of information on theories about potential impacts of taxation on inequality and empirical studies relating taxation to inequality in the region and elsewhere.' - Guillermo Perry, Universidad de Los Andes, Colombia and Center for Global Development, U.S.A