The politics of tax reform
THE DYNAMICS OF TAX POLICY: AN ANALYTICAL PUZZLE
Exploring policy change in tax policy presents a double challenge to comparative public policy. First, an explanation of domestic dynamics of tax reform is called for. The second analytical step consists of the explanation of the international diffusion of tax reform. Considered together, these two steps require dynamic models of tax policy as the first step highlights innovation and the second emphasises policy diffusion (or policy transfer, see Dolowitz and Marsh 1996). However, the study of tax policy has traditionally illustrated the inertial characteristics of this policy area, not its dynamism (Robinson and Sandford 1983; Rose and Karran 1987). Indeed, Witte examined the long-term dynamics of US federal tax policy only to conclude that radical policy change was most unlikely (Witte 1985: 380). Presumably, until the end of the 1980s the single most renowned theme of the tax policy literature was the quasi-impossibility of tax reform; during the same decade, this thesis had to be overhauled in view of the extraordinary diffusion of tax reform throughout the world. Accordingly, a second generation of policy
studies appeared, this time more concerned with the explanation of change than with the thesis of policy inertia.