IDEAS home Printed from https://ideas.repec.org/a/taf/rripxx/v23y2016i2p208-231.html
   My bibliography  Save this article

Trade liberalization and the global expansion of modern taxes

Author

Listed:
  • Laura Seelkopf
  • Hanna Lierse
  • Carina Schmitt

Abstract

For a long time, governments relied heavily on trade taxes as the main source of public finance, and for some countries, mainly less developed ones, they still account for a large share of revenue. Yet, with trade liberalization, governments have been forced to abandon these easy-to-collect taxes and to adopt modern hard-to-collect taxes, mainly internal income and consumption taxes. Surprisingly, we know little about how governments across the world have addressed this common challenge. In this paper, we analyze the rise of the most important present taxes: the personal and corporate income tax, the general sales tax and the value-added tax. Based on a self-coded dataset, we provide a historical-descriptive outline of the expansion of modern taxes since 1842 and test the effect of trade liberalization on the probability to adopt hard(er)-to-collect taxes. While trade is an important determinant for the legislation of modern taxes, we find that its influence is not universal but depends on the tax type. Only the personal income tax and the value-added tax have served as a revenue substitution to trade taxes, while the general sales tax and the corporate income tax were rather fueled by other factors such as spending pressures.

Suggested Citation

  • Laura Seelkopf & Hanna Lierse & Carina Schmitt, 2016. "Trade liberalization and the global expansion of modern taxes," Review of International Political Economy, Taylor & Francis Journals, vol. 23(2), pages 208-231, April.
  • Handle: RePEc:taf:rripxx:v:23:y:2016:i:2:p:208-231
    DOI: 10.1080/09692290.2015.1125937
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09692290.2015.1125937
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/09692290.2015.1125937?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Laura Seelkopf & Moritz Bubek & Edgars Eihmanis & Joseph Ganderson & Julian Limberg & Youssef Mnaili & Paula Zuluaga & Philipp Genschel, 2021. "The rise of modern taxation: A new comprehensive dataset of tax introductions worldwide," The Review of International Organizations, Springer, vol. 16(1), pages 239-263, January.
    2. Limberg, Julian, 2022. "Building a tax state in the 21st century: Fiscal pressure, political regimes, and consumption taxation," World Development, Elsevier, vol. 154(C).
    3. Andersson, Jens, 2018. "Tax Stabilisation, Trade and Political Transitions in Francophone West Africa over 120 Years," African Economic History Working Paper 41/2018, African Economic History Network.
    4. Ravil Akhmadeev & Tatiana Morozova & Olga Yurievna Voronkova & Alexey A. Sitnov, 2019. "Targets determination model for VAT risks mitigation at B2B marketplaces," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 7(2), pages 1197-1216, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rripxx:v:23:y:2016:i:2:p:208-231. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rrip20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.