Foreword xv

Acknowledgments xix

About the Authors xxi

Overview xxiii

Abbreviations xxxix

Part I Setting the Stage 1

1 A Framework for the Fiscal Frontier 3

  A simple framework for how tax systems balance revenue, efficiency, and equity 3

  Mapping countries to the fiscal frontier 13

  References 19

2 Efficiency and Equity in Current Tax Systems 21

  Introduction 21

  Tax mix across development levels 22

  Efficiency shortcomings in domestic revenue mobilization 30

  Equity shortcomings in domestic revenue mobilization 42

  Efficiency meets equity: Priorities for reform 49

  Annex 2A Efficiency of the main tax instruments 53

  Notes 57

  References 59

Part II A New Path to the Fiscal Frontier: Technology, Transparency, and Trust 69

3 Technology in Tax Administration 71

  Introduction 71

  Growing use of technology for taxation 72

  Use of technology for core tax functions 80

  Essential ingredients for successful technology reforms 93

  Policy lessons 97

  Annex 3A Sources for figure 3.6 99

  Notes 101

  References 102

4 Transparency and Taxation of Top Economic Actors 109

  Introduction 109

  Top economic actors 111

  The ABCD of international taxation 122

  Opportunities to tax top economic actors 137

  Notes 151

  References 151

5 Trust and the Political Economy of Taxation 163

  Introduction 163

  Politicians and citizens 168

  Politicians and bureaucrats 181

  Bureaucrats and citizens 187

  Policy lessons for property tax reform 191

  Notes 194

  References 194

Part III Toolkit and Applications 207

6 Taxation for Environmental and Industrial Goals 209

  Introduction 209

  Environmental taxes 210

  Tax policy for industrial goals 228

  Notes 252

  References 255

7 How Much Tax Revenue to Collect and How? A Marginal Value of Public Funds Approach 265

  Introduction 265

  The WMVPF framework: Choosing how to raise revenue 267

  Calculating WMVPFs: Three tax policy examples 269

  Should a government raise additional revenue at all? 275

  Moving away from optimal tax-to-GDP ratios 277

  Annex 7A The Welfare-Weighted Marginal Value of Public Funds 280

  Notes 297

  References 298

8 Administrative Tax Data for Policy 301

  Introduction 301

  Innovative data to learn about the economy 304

  Building collaborations: Practical models for every need 312

  Analytical tools for big administrative data 322

  Lurking in the shadows: What are we missing? 331

  From tax records to data-driven policy making: A roadmap for strengthening tax data use 335

  Note 337

  References 337

9 Policy Guidance 343

  Introduction 343

  How can countries identify tax reforms that are feasible and appropriate? 343

  Linking feasibility and performance: The reform space 346

  How can the 3Ts strengthen core tax instruments? 350

  How should countries balance the tax mix? 358

  How can countries build the tax systems of the future? 359

  References 360