THE EQUITY-COMPLEXITY TRADE-OFF IN TAX POLICY: LESSONS FROM THE GOODS AND SERVICES TAX IN INDIA

IF 0.3 4区 哲学 Q4 ETHICS Social Philosophy & Policy Pub Date : 2022-01-01 DOI:10.1017/S0265052523000122
S. Rajagopalan
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Abstract

Abstract Developing countries often rely on consumption taxes, because these are broad, easy to administer, and harder to evade. However, the taxation system becomes inherently regressive. To counter this problem of the regressive nature of consumption taxes, there is a temptation among policymakers to address equity concerns through a multiplicity of rates, making the consumption tax system complex. Here, complexity is considered the by-product, or companion, to pursuing goals of equity. Complex tax systems, however, pose a different problem relating to equity. Assuming a minimum fixed cost of compliance imposed by a complex tax system, smaller firms and individuals face a much higher cost of compliance relative to larger firms and richer individuals. Oligarchic sectors dominated by a few large firms also find it easier to organize and lobby to get favorable rates compared to competitive sectors with small firms. Though complexity is considered a by-product of several equity-enhancing measures, the Indian experience with its Goods and Services Tax reform serves demonstrates the opposite, that there is a trade-off between equity and complexity.
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税收政策中的股权与复杂性权衡:来自印度商品和服务税的教训
发展中国家通常依赖于消费税,因为这些税范围广,易于管理,而且更难逃避。然而,税收制度本质上是递减的。为了解决消费税累退性的问题,政策制定者倾向于通过多种税率来解决公平问题,从而使消费税体系变得复杂。在这里,复杂性被认为是追求公平目标的副产品或伴侣。然而,复杂的税收制度带来了与公平相关的另一个问题。假设一个复杂的税收制度强加的最低固定成本,相对于大公司和富有的个人,小公司和个人面临的合规成本要高得多。由少数大公司主导的寡头行业也发现,与小企业主导的竞争行业相比,组织和游说获得优惠利率更容易。虽然复杂性被认为是一些提高公平措施的副产品,但印度的商品和服务税改革的经验表明,情况恰恰相反,在公平和复杂性之间存在权衡。
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来源期刊
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期刊介绍: Social Philosophy and Policy is an interdisciplinary journal with an emphasis on the philosophical underpinnings of enduring social policy debates. The issues are thematic in format, examining a specific area of concern with contributions from scholars in different disciplines, especially philosophy, economics, political science and law. While not primarily a journal of policy prescriptions, some articles in each issue will typically connect theory with practice. The 2006 issues are "Justice and Global Politics" and "Taxation, Economic Prosperity, and Distributive Justice". The 2007 issues will be "Liberalism: Old and New" and "Ancient Greek Political Theory".
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A LIMITED DEFENSE OF EFFICIENCY AGAINST CHARGES OF INCOHERENCY AND BIAS WHO SHOULD TAX MULTINATIONALS? PREDISTRIBUTION AGAINST RENT-SEEKING: THE BENEFIT PRINCIPLE’S ALTERNATIVE TO REDISTRIBUTIVE TAXATION REALIZATION AND RECOGNITION UNDER THE INTERNAL REVENUE CODE JUSTIFYING TAXATION
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