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Fiscal Policy in Chile: Promoting Faustian Growth?

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  • Lopez, Ramon E.

Abstract

We show that the tax system in Chile is insufficient, inefficient and inequitable. Insufficient because it does not yield enough revenues for the state to promote human capital development and to face poverty in a more comprehensive way; inefficient because it is highly unbalanced causing most of the tax burden to be concentrated in very few taxes while neglecting the use of the least distortion-prone tax mechanisms available; inequitable because it forces the middle and low income groups to shoulder most of the tax burden while allowing the super rich to get away paying one of the lowest tax rates among middle income and advanced countries.

Suggested Citation

  • Lopez, Ramon E., 2011. "Fiscal Policy in Chile: Promoting Faustian Growth?," Working Papers 143326, University of Maryland, Department of Agricultural and Resource Economics.
    • Handle: RePEc:ags:umdrwp:143326
    DOI: 10.22004/ag.econ.143326
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    References listed on IDEAS

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