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No Taxation without Efficiency? Elite Perceptions of Redistribution and Progressivity in Chile

Published online by Cambridge University Press:  21 October 2022

Jorge Atria Open the ORCID record for Jorge Atria [Opens in a new window]
Jorge Atria*
Affiliation:
Department of Sociology, Universidad Diego Portales / Centre for Social Conflict and Cohesion Studies (COES)
*
*Corresponding author. Email: jorge.atria@mail.udp.cl
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Abstract

Even though a vast literature has addressed perceptions and beliefs on taxes, progressivity and redistribution, few studies have specifically studied the perceptions of economic elites in this regard. This group is relevant for its affluence and influence, and therefore elites’ ideas and preferences have a major impact on tax-policy configuration. This study analyses the perceptions of the economic elite on redistribution and progressivity in Chile. Based on in-depth interviews and historical documents, such notions are examined by mixing concrete evaluations of income tax and value-added tax (VAT) and more general attitudes towards the role of the tax system in economic development. Results show that redistribution is negatively evaluated, which coexists with a strong willingness to contribute to poverty relief through social initiatives outside the state. Additionally, progressivity is sidelined while highlighting growth, tax neutrality, and incentives to entrepreneurship as the main priorities of tax design. The historical analysis shows that although the Chilean tax regime has always been based on indirect taxes and levies on natural resources, neoliberal reforms and ideological renovation during the Pinochet dictatorship narrowed the general framework of tax ideas among business and political sectors and reversed progressive advances in inequality reduction and direct taxation that had been made during the previous decades.

¿sin eficiencia no hay impuestos? percepciones de la elite sobre redistribución y progresividad en chile: spanish abstract

¿Sin eficiencia no hay impuestos? Percepciones de la elite sobre redistribución y progresividad en Chile: Spanish abstract

Aun cuando una vasta literatura se ha referido a las percepciones y creencias sobre los impuestos, la progresividad y la redistribución, pocos estudios han analizado específicamente las percepciones de las elites económicas al respecto. Este grupo es relevante por su afluencia e influencia y, por lo tanto, las ideas de las elites y sus preferencias tienen un gran impacto en la configuración de la política tributaria. Este estudio analiza las percepciones de la elite económica sobre redistribución y progresividad en Chile. En base a entrevistas a profundidad y documentos históricos, dichas nociones son examinadas combinando evaluaciones concretas del impuesto sobre la renta y el impuesto sobre el valor añadido (IVA) con actitudes más generales acerca del papel del sistema impositivo en el desarrollo económico. Los resultados muestran que la redistribución es evaluada negativamente, lo que coexiste con un fuerte deseo de contribuir al alivio de la pobreza a través de iniciativas sociales fuera del Estado. Adicionalmente, la progresividad es débilmente considerada mientras se subraya el crecimiento, la neutralidad impositiva y los incentivos a las empresas como las prioridades principales del diseño tributario. El análisis histórico muestra que aunque el régimen impositivo chileno siempre ha estado basado en impuestos indirectos y gravámenes sobre los recursos naturales, las reformas neoliberales y la renovación ideológica durante la dictadura de Pinochet disminuyeron el marco general de ideas sobre impuestos dentro de los sectores empresariales y políticos y revirtieron avances progresistas relacionados con la reducción de desigualdad y el establecimiento de impuestos directos que se habían hecho durante las décadas previas.

Sem eficiência, sem taxação? percepções da elite sobre redistribuição e progressividade no chile: portuguese abstract

Sem eficiência, sem taxação? Percepções da elite sobre redistribuição e progressividade no Chile: Portuguese abstract

Embora uma vasta literatura tenha abordado percepções e crenças sobre impostos, progressividade e redistribuição, poucos estudos estudaram especificamente as percepções das elites econômicas a esse respeito. Esse grupo é relevante por sua afluência e sua influência e, portanto, as ideias e preferências das elites têm grande impacto na configuração da política tributária. Este estudo analisa as percepções da elite econômica sobre redistribuição e progressividade no Chile. Com base em entrevistas em profundidade e documentos históricos, tais noções são examinadas misturando avaliações concretas de imposto de renda e imposto sobre o valor acrescentado (IVA) e atitudes mais gerais em relação ao papel do sistema tributário no desenvolvimento econômico. Os resultados mostram que a redistribuição é avaliada negativamente, o que coexiste com uma forte disposição de contribuir para o alívio da pobreza por meio de iniciativas sociais fora do estado. Além disso, a progressividade é deixada de lado, ao mesmo tempo em que destaca o crescimento, a neutralidade tributária e os incentivos ao empreendedorismo como as principais prioridades do desenho tributário. A análise histórica mostra que, embora o regime tributário chileno sempre tenha sido baseado em impostos indiretos e impostos sobre recursos naturais, as reformas neoliberais e a renovação ideológica durante a ditadura de Pinochet estreitaram o quadro geral de ideias tributárias entre setores empresariais e políticos e reverteram avanços progressivos em redução da desigualdade e tributação direta que haviam sido feitos durante as décadas anteriores.

Keywords

taxationredistributionprogressivityelitesinequalityimpuestosredistribuciónprogresividadelitesdesigualdadtributaçãoredistribuiçãoprogressividadeelitesdesigualdade
Type
Research Article
Information
Journal of Latin American Studies , Volume 55 , Issue 1 , February 2023 , pp. 103 - 128
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Copyright
Copyright © The Author(s), 2022. Published by Cambridge University Press

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94 The respondents had to fill out a brief questionnaire that did not include questions of wealth. Thus, this position is only based on income information. Though it is not possible to check under-reporting, previous research has also trusted in respondents’ information. See Berens, Sarah and von Schiller, Armin, ‘Taxing Higher Incomes: What Makes the High-Income Earners Consent to More Progressive Taxation in Latin America’, Political Behavior, 39: 3 (2017), pp. 703–29CrossRefGoogle Scholar.

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99 Tasha Fairfield, ‘Going Where the Money Is: Strategies for Taxing Economic Elites in Unequal Democracies’, World Development, 47 (April 2013), p. 45.

100 Kalati and Manor, ‘Elite Perceptions of Poverty’.

101 See, for example, ‘Una reforma tributaria con objetivos políticos’, newspaper editorial, La Tercera, 29 April 2012, p. 39.

102 Friedrich A. Hayek, ‘Los principios de un orden social liberal’, Estudios Públicos, 6 (March 1982), pp. 179–202.

103 Hayek, ‘Los principios’, p. 183.

104 Friedrich A. Hayek, ‘El atavismo de la justicia social’, Estudios Públicos, 36 (Sept. 1989), pp. 181–93.

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112 Angélica Thumala, ‘El error de Milton Friedman: Justificaciones religiosas y morales de la empresa en Chile’, in Ossandón and Tironi (eds.), Adaptación, pp. 223–48.

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114 Ibid., p. 502.

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116 That is, a tax that imposes the same relative burden on all taxpayers. See Walter J. Blum and Harry Kalven Jr., ‘The Uneasy Case for Progressive Taxation’, University of Chicago Law Review, 19: 3 (1952), pp. 417–520.

117 Murphy and Nagel, The Myth of Ownership.

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122 Cheyre, ‘Análisis de las reformas’.

123 Berens and von Schiller, ‘Taxing Higher Incomes’.

124 Jorge Atria, Julius Duran and Simón Ramírez, ‘Business Elite Attitudes toward Taxation and the State: The Case of Chile’, United Nations Research Institute for Social Development (UNRISD) Occasional Paper No. 13 (Feb. 2021).

125 Fairfield, ‘Going Where the Money Is’, p. 45.

126 See, for instance, María José Pérez, ‘Interview with Mary Anastasia O'Grady’, Pulso newspaper, 6 May 2014, pp. 4–5.

127 Steinmo, ‘The Evolution of Policy Ideas’, p. 229.

128 Marta Lagos, ‘Chile al desnudo’, Latinobarómetro, available online at www.cooperativa.cl/noticias/site/artic/20111028/asocfile/20111028111806/chile_al_desnudo.pdf, last access 15 Sept. 2022.

129 Sánchez-Ancochea, ‘The Political Economy of Inequality’, p. 358.

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