Taxation
Taxation & DemocracyBy: Sal Frisco
Taxation & Democracy by Sven Steinmo "The politics of taxation is one of the most important policy concerns in the modern industrial state; yet we know very little about it," author Sven Steinmo states at the opening of Taxation & Democracy, a publication detailing the politics and development of tax systems of the United States, Great Britain and Sweden. The three nations discussed are prime examples of "industrial democracies," and Steinmo looks at each in comparative fashion, showing many differences but more abundantly the similarities between the three. In his introductory chapter, Steinmo discusses how taxes are looked upon by us. "Indeed, not only do we know little about tax policy, but what we think we know is often wrong." As an example, he states that it is commonly assumed that the U.S. and Great Britain have had much more progressive tax systems than "socialist" Sweden, where the system leans much more to the regressive side. In addition, it is widely misconstrued what taxes are actually used for; it is usually thought of that taxes are simply a means to generate revenue and redistributing wealth. Within the hundreds of goals of taxation are "raising revenue, redistributing income, encouraging savings, stimulating growth, penalizing consumption, directing investment, and rewarding certain values while penalizing others. . .indeed, taxation is a major instrument, if not the major instrument through which governments try to affect the private sector," as the author explains. Steinmo offers three explanations as to give insight into the "wide divergences" between the public policies of different nations and cultures. The first is the interests explanation that argues that "policy outcomes vary because the distribution of power among political interests differs from one polity to another." The interests theory also assumes that groups will always primarily pursue their self-interests and try to displace the burden of tax away from themselves. However, the explanation of why these public policies vary does not explain taxation policy, and tends to treat self-interest as a given. The second explanation provided is the values explanation, which looks into the fact that different publics want different public policies. A major weakness of this explanation is that because political values are very broad and vague, they don't specifically translate into policy alternatives. "In sum, the values explanation fails to link general ideas to specific policies," Steinmo states. Thirdly, the state explanation looks at the role of the state and how it effects the role of public policies in different societies. This explanation provides little in helping understand why "state actors have certain preferences and why these preferences vary. . . in sum, values, interests, and state-centered theories fail to explain how preferences and interests are, on the one hand, shaped and, on the other hand, translated into specific policy choices." Next, Steinmo offers a sociological view by looking at the institutional level and how the institutions profoundly affect how interest groups, politicians and bureaucrats develop their own policy preferences. This approach focuses on...
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