Inequality and the Evolution of Institutions of Taxation

Kenneth L. Sokoloff and Eric M. Zolt

in The Decline of Latin American Economies

Published by University of Chicago Press

Published in print August 2007 | ISBN: 9780226185002
Published online February 2013 | e-ISBN: 9780226185033 | DOI:
Inequality and the Evolution of Institutions of Taxation

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This chapter examines whether the extreme differences in inequality that were present across the economies of the Americas soon after colonization also affected the ways tax institutions evolved. It sets forth a brief history of the emergence of extreme differences in inequality across the Americas not long after the Europeans began to colonize the hemisphere, examining the tax systems in Latin America and North America in the nineteenth century. The chapter discusses how these tax structures evolved over the twentieth century. It offers some tentative conclusions about what the legacy of extreme inequality in Latin America meant for the long-run pattern of tax design and expenditure policy in that region, and several salient patterns emerge. The United States and Canada (like Britain, France, Germany, and even Spain) were much more inclined to tax wealth and income during their early stages of growth, and into the twentieth century, than were their neighbors to the south.

Keywords: inequality; Americas; colonization; tax institutions; tax systems; tax structures; expenditure policy; United States; Canada; tax wealth

Chapter.  24283 words.  Illustrated.

Subjects: International Economics

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