Taxing with Dictators and Democrats in Argentina
October 11, 2016
Latin American nations are notoriously poor tax collectors and Argentina is among the least effective. Despite a relatively high level of development, Argentina’s governments are unable or unwilling to extract at levels comparable even to the surrounding nations. One possible source of this weakness is Argentina’s political structure, including its fiscal federalism and the incentives provided by elections and national governance. Crucially, taxing is unpopular, so politicians that face reelection or can gain resources elsewhere will avoid it.