ABSTRACT
This chapter explores the way in which the fiscal structure of the major Latin American economies has developed since the Second World War in response to the expansion of state activities during the industrialisation process. It examines four sub-hypotheses derived from O’Connor: that with industrialisation state expenditure inevitably increases; that tax increases to finance this are borne by labour rather than by capital; that these increases are inadequate to finance the expansion; and that the means of covering the fiscal deficit tend to destabilise the economy. The chapter suggests that there is a substantive ‘fiscal crisis of the state’ in Latin America which seriously limits the viability of dependent capitalist development in the area. Indirect taxation is the main single tax category in Latin America.
