Taxation & Democracy

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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 ...

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Since the U.S., Sweden and Britain are representative democracies, they are presented with the dilemma of linking the wishes, desires and preferences of those who they represent with the decisions of the "political elite," even when the public may be ignorant to the facts and the government must enact policies out of absolute necessities. This is a key variable in understanding why the nations have developed such contrary policies regarding taxation. The characters of all the countries' systems of taxation and public revenue are a result of their own institutional structures. With Constitutions of most countries either being either vague or unwritten, every country has had to adapt ...

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