📚 Michael Keen and Joel Slemrod wrote one of the most interesting books of 2021 about the history of taxation. The book is titled “Rebellion, Rascals, and Revenue: Tax Follies and Wisdom through the Ages” and it describes the ways in which rulers/elected figures used – and use – taxes to fund private and/or public expenses around the world.
Here are a few interesting passages of the book relating to LatAm countries:
💔 “In Argentina, circa 1900s, [a statute that provided a tax exemption to bachelors who had proposed marriage to a woman but been rejected] gave rise to one of history’s more bizarre forms of tax avoidance. For a small fee, ‘professional lady rejecters’ agreed to swear to the authorities that a particular man had indeed proposed to them and that they had declined the offer.” (p. 175)
💲 The War of the Pacific, also known as the “Ten Cents War”, was an armed conflict between Chile and an alliance between Bolivia and Peru from 1879 to 1884. The core of the dispute was the Chilean claim over the Atacama desert, which in the 1840s “was discovered to be rich in guano and nitrates.” The war ended with Bolivia guaranteeing that it “would not raise the tax rate on Chilean companies operating within its borders.” (p. 16)
📣 Requesting third parties to share information on target taxpayers is one of the many initiatives local governments use to monitor and stimulate tax compliance. That said, in Ecuador it was found that, “[a]fter the introduction of third-party information on sales, some firms did indeed report increased revenues – but they also increased their reported deductions, not subject to information reporting, by almost as much.” (p. 302)
🥤 “Mexico, where consumption of soft drinks is extraordinarily high and obesity has skyrocketed, imposed a [10%] tax on non-alcoholic drinks with added sugar in 2014. And the tax seems to have had some success. Purchases of sugary drinks fell by 10 percent in the following year, although other factors, such as slow economic growth and shifting consumer tastes, may also have played a role.” (p. 194)
The book is available for purchase on Amazon via this affiliate link: https://amzn.to/48aWzOR
