The discrepancy between "ideal" and "real world" international tax rules. What drives politicians when making the rules?

Julia Braun

Publication: Working/Discussion PaperWU Working Paper

Abstract

The current international tax system diverges greatly from a theoretically "optimal" tax
system. One reason for this discrepancy may be that politicians strive for other objectives rather than
making tax rules that comply with the theoretical concepts of optimal taxation. In this article, I
overview the approaches used in the economic and legal literature to explain the motivations of the
people making international tax policy and contrast them with observations from the "real world".
This article illustrates that the making of international tax policy is affected by many different factors:
domestic pressure groups and the structure of the international tax system, along with selfinterested
politicians and bureaucrats. Considering the complexity of the conditions under which
international tax policy is made, it is not astonishing that international tax law deviates from the
principles characterizing ideal taxation. (author's abstract)
Original languageEnglish
Place of PublicationVienna
PublisherWU Vienna University of Economics and Business
Publication statusPublished - 25 Oct 2012

Publication series

NameWU International Taxation Research Paper Series
No.2012-10

WU Working Paper Series

  • WU International Taxation Research Paper Series

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