Direct Taxation and State–Society Relations in Lagos,Nigeria

Existing research suggests that external sources of finance, such as foreign aid and natural resource rents, allow states to generate revenue independently of their societies, disincentivizing them from forming close links with their citizens and severely problematizing the notion of a social contract. In Lagos, Nigeria's commercial capital, a series of personal income tax reforms have seen an increase in taxpayer compliance. Considering Lagosians’ perceptions of their relation with the state government, this study examines whether the state had to ‘earn’ its revenue by developing a closer relationship with its citizens, and whether citizens responded through a greater willingness to pay tax. It explores how citizens understand this relationship, what role they perceive themselves to fulfil, and what their expectations are for the future of state–society relations. The study shows how, through efforts to visibly link tax to service delivery, a social contract is emerging between Lagos State and its citizens — but that this relationship differs among groups, in that it is shaped by pre‐existing concepts of public organization and modes of political engagement.     

PUBLIC SECTOR UNIONISM AND TAX BURDENS: ARE THEY RELATED?*

One factor that has affected state and local politics since the 1960's is the growth of public sector unionism. Conventional wisdom assumes that the “fist generation” of public unionism has been a major cause of the fiscal problems faced by many state and local governments in the 1970's. State level cross-sectional analysis (1960–71) questions this widely held assumption with respect to the impact of strike activity and collective bargaining legislation on the tax burden across the states.     

INFLATION, PROGRESSIVITY, AND STATE INCOME TAX REVENUES

The combination of progressive income tax structures and inflation has led to significant increases in state income tax revenues. While the federal government has de facto indexed the federal personal income tax, states have generated large relative and absolute increases in their income tax revenues. This paper shows that the ratio of income tax revenues to personal income has grown significantly more in states with progressive income tax structures than those with proportional tax structures. Almost half of such increases may be attributed to inflation. The increase in the relative share of income tax as a source of state revenues has recently run into resistance in some states which have installed income tax indexation measures. This may suggest that the marginal cost of raising revenue through inflation, relative to other means (taxes), is reaching its limits.     

Taxing the Poor: The Politics of Income Taxation in Ireland

Income tax is the largest single means of generating revenue in modern states, and its impact is felt by virtually all members of society. How it is levied is therefore a matter of the highest political significance. Yet countries vary greatly in the manner in which they allocate the burden of paying income tax. In Ireland, the profile of income tax has changed dramatically throughout the course of economic modernization, since about 1960. By 1980 it was generally agreed that employees were carrying too much of the burden, especially those on fairly low incomes. Steady growth in recent years has enabled governments to cut tax rates while still bringing in rising revenue. But shifting the distribution of tax has proved very difficult, and tax reform has tended to favor the wealthy most. This article draws on comparative political science literature to highlight the political and institutional variables relevant to explaining these trends.
"The Chancellor of the Exchequer is a man whose duties make him more or less of a taxing machine. He is entrusted with a certain amount of misery which it is his duty to distribute as fairly as he can" (Robert Lowe, Viscount Sherbrooke, (Liberal), Hansard, 1870, April 11, col. 1639).     

TOTAL FACTOR PRODUCTIVITY GROWTH IN MANUFACTURING FURTHER EVIDENCE FROM THE STATES*

In this paper, we first develop a measure of total factor productivity (TFP) growth and summarize a source-of-growth analysis for the manufacturing sector of 48 states. As have others, we find little association between TFP growth differentials and output growth differentials for census regions. At the staterather than the regional level, however, we find a positive association between TFP growth and output growth. We use cross-sectional data to estimate the determinants of the variation in TFP growth. Two results emerge that are important for regional policy and for understanding national productivity trends. First, state investments in education and in transportation infrastructure may affect TFP growth. Second, energy price increases in the early 1970s had no differential effects on productivity growth across states. We also explore the determinants of manufacturing output growth and find that TFP growth, demand growth, wage growth, wage levels, and state corporate income tax rates are significant.     

KNOWLEDGE MATTERS: THE LONG‐RUN DETERMINANTS OF STATE INCOME GROWTH*

ABSTRACT State per capita income differences narrowed considerably between 1939 and 1976. However, this convergence has been incomplete. We examined the sources of relative per capita income growth using an augmented growth model and a panel of the 48 contiguous states from 1939 to 2004. We explored the effect of tax burdens, public infrastructure, size of private financial markets, rates of business failure, industry structure, climate, educational attainment, and technology production. Our results show that a state's technology and its college attainment rates are the main factors that allow some state's per capita income to remain above those of other states.     

THE LONG-RUN ECONOMIC IMPACTS OF FEDERAL,STATE, AND LOCAL FISCAL POLICIES IN METROPOLITAN AREAS*

ABSTRACT. This paper uses new estimates of metropolitan factor demand and output supply functions to study how federal, state, and local fiscal policies affect metropolitan economies. We illustrate our work with findings for ten metropolitan areas in five states for changes in state corporate income taxes, local property taxes, the federal corporate income tax, an investment tax credit, interest rates, public capital stocks, output prices, and tax and regulatory policies affecting gross wages. It is clear from these simulations that a policy that is nominally the same everywhere will have repercussions that vary widely across regions and cities.     

Cultural Tourism: Marketing Challenges and Opportunities for German Cultural Heritage

Because of the generally precarious state of public finance in Germany, at federal, state and community levels, expenditure for cultural purposes is being reduced constantly. Therefore, cultural institutions such as heritage sites are virtually compelled to find additional sources of funding to improve their financial situation and ensure their long‐term survival. One of the more suitable means of increasing the revenue situation on an ongoing basis is to improve and expand the cultural tourism offerings. Despite this significance of cultural tourism, an empirical study established that German heritage sites have by no means exploited the real potential of cultural tourism in a comprehensive manner. Thus, the objective of this paper is, on the basis of a well‐founded delineation of the concept and demand‐side situation, to demonstrate the potential success factors for developing cultural tourism and to do so from a marketing perspective.     

Decentralization,Local Taxation and Citizenship in Senegal

This article deals with the politics of revenue collection in a framework of decentralization, democratization and multiparty politics as experienced in the small village of Barkedji in the pastoral region of Senegal. In Senegal, revenue collection has recently been transferred from state administrators to locally elected councillors. Contrary to the assumption of the ‘good governance’ doctrine, this transfer of responsibility has not resulted in a strengthening of democratic structures where taxpayers demand (and gain) public services and more political representation in exchange for increasing taxes. In Barkedji, as elsewhere in Senegal, tax‐compliance hit rock‐bottom after tax collection became the responsibility of local councillors. Meanwhile other types of local institutions, with less clear state relations, are able to mobilize large amounts of revenue outside the normal tax channels for the provision of goods and service. These non‐state institutions seem to have taken over as providers of political representation as well as suppliers of public goods and of access or rights to crucial local resources. The article explores the motivation among first‐comers and newcomer populations to adopt or reject tax requirements to different types of organizations, and discusses the implications of this parallel tax collection for the exercise of public authority and the crafting of state and citizenry.     

Tax Havens and Global Capitalism: Vanuatu and the Australian Connection

The growth of tax haven activities has been a feature of recent global capitalist development, yet geographical analysis of these activities has been limited. Vanuatu has become the South Pacific's major tax haven, expanding through its ability to capture (mainly) Australian and Asian investment in the 1970s and 1980s. Tax haven activities in Vanuatu have increasingly contributed to local employment and income generation, despite the growth of competition from newer tax havens in the region. Vanuatu is not used by major Australian public companies to the extent that either Hong Kong or the Caribbean tax havens are used, and it is suggested that activities from Asia are increasingly dominating Vanuatu's finance centre. Recent Australian taxation legislation may reduce Australia's role in the Vanuatu tax haven further, although it is apparent that there are limitations to the legislation's effectiveness in stopping tax haven activities.     

Beveridge’s rival: Juliet Rhys-Williams and the campaign for basic income, 1942–55

Historians of Britain’s post-war welfare state have long been aware of the shortcomings of the social insurance model, but the political impact of the Beveridge report has tended to obscure the alternative visions of welfare canvassed in the 1940s and 1950s. This article examines the social activist Juliet Rhys-Williams’ campaign for the integration of the tax and benefit systems and the provision of a universal basic income, which attracted wide interest from economists, journalists, and Liberal and Conservative politicians during and after the Second World War. Though Rhys-Williams’ proposals were not adopted, they helped establish a distinctive ‘social market’ perspective on welfare provision which has become central to British social policy debates since the 1960s and 1970s.     

Population density and the accuracy of the land valuations in the 1798 federal direct tax

Abstract

The peculiar operation of the 1798 federal direct tax has led scholars to question whether tax officials reported the land valuations from their districts faithfully. Peter Lindert and Jeffrey Williamson argue that southern tax assessors systemically under reported the value of southern real estate, and they adjust their income estimates to account for the likelihood of corruption. This paper affirms the reliability of the tax returns by demonstrating that population density, rather than corruption or lax enforcement, can explain nearly all of the variation between the assessment districts. Accepting the tax valuations as accurate would lower Lindert and Williamson’s income estimates, imply slower growth rate between 1774 and 1800, and suggest a higher growth rate between 1800 and 1850.     

GOVERNMENT AND THE CANADIAN URBAN SYSTEM: INCOME TAX,TRANSFER PAYMENTS,AND EMPLOYMENT

The impact of government on the Canadian urban system is explored using Revenue Canada data from personal income tax returns. Variations in taxes and in certain forms of government expenditure among urban places are linked with city size, economic base, per capita income, and rate of growth. It is found that many locations are heavily dependent on the public sector and that, overall, government programmes redistribute income toward smaller and less prosperous places. The most significant effect, however, is the stabilization of local economies by means of a large and relatively constant public sector. L'impact du gouvernement sur le système urbain canadien est étudié en utilisant des données de Revenu Canada qui proviennent des déclarations d'impǒt sur le revenu des particuliers. Les variations de taxes et de certains types de dépenses publiques parmi les régions urbaines sont associés avec les variables de taille urbaine, base économique, revenu per capita, et taux de croissance. Il est démontré que plusieurs régions sont fortement dépendantes du secteur public et que, globalement, les programmes gouvernementaux redistribuent le revenue vers les régions les plus petites et les moins prospères. Mais l'effet le plus significatif est celui de la stabilisation des économies locales par le biais d'un large et relativement constant secteur public.     

INCOME INEQUALITY,ECONOMIC GROWTH,AND THE DISTRIBUTION OF INCOME GAINS: EVIDENCE FROM THE U.S. STATES*

ABSTRACT This paper first investigates a relationship between economic growth and income inequality using U.S. states data, a state cost‐of‐living deflator, and nonlinearity. It then explores the distribution of income gains among different income groups. We find that the impact of inequality on growth is nonlinear. Lowering inequality or increasing it substantially reduces growth; thus stable inequality may be good for growth. Economic growth affects incomes of the poor, the middle‐income group, and the rich similarly with the elasticity of one. Education and labor market policies become important in promoting growth and improving income gains of the poor.     

IMPACT OF POPULATION AGEING ON INDIA'S PUBLIC FINANCE

This paper integrates the methodology of the National Transfer Accounts and Budget Forecasting Model to compute and forecast the impact of population ageing on India's public finance from 2005 through 2050, based on the fiscal structure in 2004–2005. The empirical results are new and have useful policy implications. The forecasted increase in the share of total public expenditure on elderly individuals is largely accounted for by expenditure on civilian pensions and other cash transfers, government services, and poverty and other social protection. Elderly individuals are found to be not very expensive in terms of public health expenditure. Tax revenues increase and result in a decline of debt-to-GDP ratio because population ageing does not lower tax buoyancy in the long run. Overall, the increasing total budget surplus and fiscal support ratio implies that the long-term impact of population ageing may be fiscally sustainable.     

Police and Political Violence in the 1960s and 1970s: Germany and Italy in a Comparative Perspective

Notwithstanding the significant differences between the German and Italian police models (federal and civil vs. centralised and militarised), in both countries the confrontation with the protest movements of the 1960s and 1970s had a profound impact on police conceptions and public order strategies. Police forces in some German federal states (West Berlin) followed a hard line until the late 1960s, while in others (Munich, Hamburg) reforms to the Weimar-centred police intervention tactics took place beginning in the early to mid-1960s. In Italy, traditional police conceptions and strategies remained largely unchanged and re-emerged in 1968. Here, a movement from within the police led to the demilitarisation and unionisation of the state police in 1981. In both countries, fighting left-wing terrorism in the 1970s stimulated technical modernisation and enhanced the centralisation of the police. In critical response to police tactics, in the late 1970s Germany police matters were increasingly perceived as a concern not only of the state but of civil society—even if policing remained a highly contested terrain. In Italy, such matters largely remained state concerns in which only politicians and internal security specialists were entitled to intervene.     

Neo-Colonialism Reconsidered: A Case Study of East Africa in the 1960s and 1970s

A former major base of British colonialism, East Africa, has served as one of the testing grounds for what has been referred to as neo-colonialism. According to Kwame Nkrumah, neo-colonialism indicates that although ‘in theory’, a colony attains independence, ‘[i]n reality its economic system and thus its political policy is directed from outside’ (Neo-Colonialism: The Last Stage of Imperialism. London: Panaf Books, 2004 [1965]). This article challenges this image of neo-colonialism. Based on British documents of the late 1960s and early 1970s, most of which have become available to the public only in the last decade, and sources in East African libraries, it casts new light on British external relations with East Africa in the heady days of independence. These documents demonstrate that the new states of East Africa enjoyed a substantial degree of autonomy, that Britain's development aid was inconsistent and that Britain's involvement in the affairs of its former colonies was reluctant. These accounts reveal that the impact of British policy on newly independent states was actually limited, and thus the nature of Britain's relationship with its ex-colonies and the discourse of neo-colonialism are debatable.     

Financing Decentralized Development in a Low‐Income Country: Raising Revenue for Local Government in Uganda

Uganda has been engaged for a number of years in an ambitious programme of political and financial decentralization involving significantly expanded expenditure and service delivery responsibilities for local governments in what are now forty‐five districts. Fiscal decentralization has involved allocation of block grants from the centre to complement increased local tax revenue‐raising efforts by districts and municipalities. This article is concerned with the financial side of decentralization and in particular with an examination of district government efforts to raise revenue with the tax instruments which have been assigned to them. These are found to be deficient in a number of ways and their tax raising potential not to be commensurate with the responsibilities being devolved. Achievement of the decentralization aims laid down, therefore, must depend either on the identification of new or modified methods of raising revenue locally, or increased commitment to transfer of financial resources from the centre, or both.     

THE EFFECTS OF LOCAL TAXES AND PUBLIC SERVICES ON RESIDENTIAL DEVELOPMENT PATTERNS*

ABSTRACT. This paper incorporates an exogenous taxing and service-providing public sector into a dynamic residential land-use model in order to examine how local-government fiscal policies alter the pace and pattern of residential development. The model is used to derive the comparative-dynamic responses to variations in the income, sales, and property taxes and public-service time paths. The results show how tax and expenditure effects systematically depend upon the anticipated relative growth rates in rents to alternative uses and vary across locations within a given urban area as well as across urban areas themselves.     

A BENEFIT-COST ANALYSIS OF A REGIONAL DEVELOPMENT INCENTIVE: STATE LOANS*

The luster of economic growth, the existence of depressed regions, and the fear of competition from giveaway programs in other states have all resulted in state governments adopting a rash of programs designed to encourage a strong manufacturing base for their economy. Many economists feel uneasy about the rapid spread of such industrial incentive programs as tax breaks, government loans, and industrial revenue bonds.¹ The literature of public finance, development, and regional economics contains many interesting studies examining the wisdom of these undertakings. This paper hopes to contribute by developing a method of benefit-cost analysis for appraisal of industrial incentive programs. Even though the model is constructed for and applied to the analysis of state government industrial development loans, the principles formulated should be easily adaptable to the assessment of other types of regional development programs. A secondary objective of the paper is to discuss the first empirical application of a model which accounts for possible differences between the social opportunity cost of foregone investment and that of foregone consumption.²