Beyond the State

In many settings where the state neither collects taxes effectively nor is an instrument of redistribution or trusted governance, these other payments may appear more tax-like to the people engaged with them than the ‘official’ taxes. Kate Meagher (Reference Meagher2018) and several Africanist scholars (e.g. Guyer Reference Guyer1992; Kauppinen Reference Kauppinen2020; Olken & Singhal Reference Olken and Singhal2011; Owen Reference Owen2018; Prud’homme Reference Prud’homme1992) have described how informal fees, tithes, community levies, and even bribes all go towards financing public goods and even public sector salaries. Indeed, some of them have argued that in African countries, informal ‘taxes’ exceed formal tax payments, resulting in a fiscal burden on the poor, which is not only unduly large, but also goes unrecognised. Meagher argues that ‘fiscal essentialism’ – a narrow focus on solely state-levied and ‘formal’ taxes – blinkers us to how the ‘formal’ and ‘informal’ economy relate to each other, and importantly obscures the economic activity of the poor, including their substantial contribution to funding public goods (Reference Meagher2018: 4–6). This discussion evidences that the state does not have a monopoly on producing publics or public goods, and that these non-state collectives also pool and redistribute resources. It also illustrates the potential effects that definitions of tax can have in valuing or devaluing the economic activity of people.

Theorising these other kinds of payments, Kauppinen, writing about tithing in Ghana, argues that we need to interrogate the multiple ways that money is redistributed in society, and view taxes as part of a ‘universe of transfers’ where taxes gain their meaning, and their efficacy is assessed in relation to other payments, such as tithes (Reference Kauppinen2020: 41). In other words, not only do we need to recognise these non-tax transfers as tax-like, but we should also pay attention to how these other payments inform local understandings of what taxes are and should be – how they may, as in Kauppinen’s case, gain important meaning in relation to the exchange of sacrifices for divine miracles between a God and believers. Moving away from Africa, a similar argument has been made by Sheild Johansson (Reference Sheild Johansson2020) regarding payments to unions and neighbourhood associations in peri-urban Bolivia. Here, too, public goods are regularly financed and maintained by non-state actors. The supposed efficacy and value of a fiscal exchange with the state is always considered in light of these other payments and their ability to build ethical relationships and physical worlds to live within. In these examples, taxes to the state are not characterised only by their ability to produce public goods, but instead exist in constant comparison with other payments that do provide services, material, and immaterial benefits. Sheild Johansson continues this line of analysis in her chapter about the ‘ecology of payments’ in this volume. The conversation is also taken up by Eräsaari in his chapter on fundraising and tax in Fiji.

Recent scholarship on communities in Europe that create autonomous spaces of economic activity beyond the state’s purview illustrates further how people decentre the state in their fiscal lives and challenge the state to negotiate the definition of tax in its efforts to regain its primacy in extracting payment for economic activities. For instance, Bäumer Escobar (Reference Bäumer Escobar2020) introduces the concept of fiscal commons in the context of cooperatives in Catalonia to describe alternative and collective modes of being a taxpayer that circumvent tax collection as envisaged by the state. Eräsaari (Reference Eräsaari2020) investigates a Helsinki community that similarly is constructing alternative economic spaces, in this case a swapping favours economy, thereby demonetising labour and making it difficult, practically and ethically, to tax. Both show clearly that the object of tax is not a given, but rather a contested definition between citizens and the state.

All these explorations of economic activity beyond the state draw our focus to local understandings of how tax is culturally embedded, how the state labels certain economic activities as formal or not, and how, on a very fundamental level, the state decides what is taxable at all. Additionally, as Meagher’s work points to, ‘fiscal essentialism’, a narrow definition of what taxes are, diminishes the contribution that ‘informal workers’ make to public goods (2018), and also reinforces false divisions between informal and formal economies and economic action (Owen Reference Owen2018). Bracketing these payments off as informal also creates national narratives of contributors and dependents which cast ‘informal’ workers as the latter, when in fact they are, for most intents and purposes, the former. It is paramount that we pay attention to the political effects of this act of bracketing of some payments as taxes – how the naming of certain flows of resources as formal ones, attaching to them rights and privileges in the process, automatically renders other flows of money as disconnected from these rights and privileges. For instance, the receipt of a pension, access to health care, and even citizenship, can be conditional on taxes paid, as will be further addressed in the section ‘What Do Taxes Do’. Exploring tax-like payments, such as the varied roles of tithes in societies or the logics of payments to local neighbourhood associations, is simultaneously a matter of ethnographic rigour, analytical curiosity – as we stretch our definitions of taxes – and of equity, in that we recognise the hierarchies of money flows and how these overlay global structural inequalities.

Paying Attention to the State

While an anthropology of tax should aim to understand tax broadly, and counter any fiscal essentialism, we also suggest that it is crucial to pay attention to taxes as defined by states. For one, states can collect resources at scale and create large and costly bureaucratic structures to do so. Tax policies form part of a broader set of fiscal policies through which contemporary states have the ability, at least in theory, to promote and penalise different flows of money and to influence ‘the’ economy with the aim to promote ‘strong and sustainable growth’, ‘reduce poverty’, or to ‘increase welfare’ in their demarcated territory. Thus, taxation forms part of a set of economic tools (e.g. gross domestic product (GDP) per capita income) which both makes national economies intelligible and turns them into a seemingly clearly separable thing bounded by national borders with geopolitical effects for the upholding of colonial logics and the legitimisation of a radically unequal postcolonial order (Eckert & Mugler n.d.; Speich Reference Speich2011).

In addition, most people are stuck in state structures and have no choice regarding where or how much tax they pay, much less what they get for it in return, as they are constrained by their domestic laws, passports, and other countries’ legislation that restrict their mobility (see, for an exception, Gregory Rawlings’ contribution in this volume on the commodification of citizenship). Undoubtedly, certain institutions like churches or unions may be experienced as similarly impossible to exit, the impact of such choices profound. However, the combination of administrative infrastructures, the right to make laws, and a monopoly of legitimate violence ensures that states are powerfully positioned to move resources within society.

The state also matters because of its ability to define, in a narrow and legal sense, what counts as tax. This ability to define ‘official’ taxes becomes linked to the access of rights and privileges, as mentioned above, and also influences peoples’ imaginaries of money flows, such as how and where wealth is produced. This, in turn, creates categories of resources that are taxable, activities that produce value, and people who contribute and those who do not. The state is dominant in imaginations of how public goods are created and what the greater imagined collective is. This is sometimes even so in settings where states utterly fail to provide their citizens with access to things that sustain or add value to life.

Saying that, if we agree that there is something special about taxes levied by states and that the state matters (because many can do things that other institutions cannot), then we also must acknowledge the diversity of statehoods, their varying relationships to taxation, and the diverse evolution of states’ tax collection practices (Martin et al. Reference Martin, Mehrotra and Prasad2009). For instance, many early colonial states never intended for taxes to fund public goods; instead the aim was to fund an administration that created ‘order’ and protection for a select few (Meagher Reference Meagher2018). Only later, in the twentieth century, did British and French colonies in Africa extended promises of welfare provision when this became politically necessary and advantageous (Eckert Reference Eckert2006: 478; Park Reference Park, Bhambra and McClure2022: 91). Likewise, as discussed, the role of taxation in financing social security or reversing income and wealth inequality has regained prominence in policy debates in the past two decades.Footnote ⁵ As we acknowledge shifting fiscal practices, it is also crucial that we are precise in our analysis of the different kinds of transfers state taxes are. In efforts to move away from the impulse within tax studies of thinking of taxpayers as homo economicus, who calculate the reciprocal deal that taxes imply, it is useful to recognise that tax payments do not only imply a return, but can also enable sharing. In her chapter, Mugler provides us with this more precise analysis as she demonstrates that many tax payments are, in fact, unilateral and that a focus on taxes always offering something in return is perhaps not the most useful starting point if we want to conceptualise fiscal sociality with accuracy.

Alongside recognising the diversity of states, we also need to reckon with the issue of defining states, because as anthropologists have shown, the state is not a given entity (Bierschenk & de Sardan Reference Bierschenk and Olivier de Sardan2014; Gupta Reference Gupta2012; Hansen & Stepputat Reference Hansen and Stepputat2001; Mathur Reference Mathur2016). Instead it is better described as a ‘multi-layered, contradictory, translocal ensemble of institutions, practices, and people in a globalized context’ (Sharma & Gupta Reference Sharma and Gupta2006: 6), and ‘culturally embedded and discursively constructed’ (Sharma & Gupta Reference Sharma and Gupta2006: 27). A core argument in the scholarship on the state is that its ultimate power is its ability to bring itself into existence through myth, imagination, and border making – the ‘state effect’ (Mitchell Reference Mitchell and Steinmetz1999), or the-state-as-mask (Abrams [1977] Reference Abrams1988). This work on the role of imagination in the making of state–society relations feeds directly into many of the questions the anthropology of tax asks about the power of taxes to produce imagined relations and political fantasies, including the state itself. But importantly, these myths and imaginations are in constant engagement with state institutions, which whilst blurrily defined, make very sharp interventions in the life of taxpayers, and rigid laws which shape and curtail national and international fiscal relations. Exploring taxes narrowly and broadly are both anthropological imperatives – we need to look at how taxes are constructed beyond the state, but also what it is that states do. To take another step towards answering our question ‘what is tax?’, we continue by posing another one: ‘what and who is taxable?’

Ethics, Politics, and Logistics

The tax dispute between the Finnish Tax Authority and the timebank might be considered a small-scale example of an alternative economy, where people actively seek ways to exit capitalist systems or introduce more humane economic logic into their lives. But disputes around what is taxable also play a crucial role in mainstream economic life. This question has effects on competitive advantages and therefore prices and profits, as can be seen in recent debates around so-called ‘sin taxes’. These debates illustrate that what can be taxed, or when an issue of taxation might generate a heated debate, is not a given. Instead, the tax packages of countries are ethical, political, and logistical creations existing within specific histories and cultural spaces.

Denmark has, for instance, taxed sugary foods since the 1930s. So, paying taxes on chocolate, soft drinks, and confectionery stirs little controversy there today. However, a recent government plan to extend the ‘chocolate tax’ to more foods with added sugar, such as yoghurt, marmalade, pickles, and ketchup, and to bring in a separate ‘fat tax’ on foods high in saturated fats, had to be cancelled due to resistance from industry and political pressure. They warned that the new tax would lead to increases in food prices, raise the compliance costs of many companies, and put jobs at risk (Stafford Reference Stafford2012). Similarly, the United Kingdom’s 2018 ‘sugar tax’ on fizzy drinks also triggered debates. After its implementation, food and drink industry representatives complained that it had a limited scope and neglected the vast selection of natural or milk-based sugary drinks, as well as confectionery, which are also high in sugar. Public and political opposition to these new sin taxes emphasised people’s personal responsibility in health matters and freedom of consumption.

Tax systems are also partly effects of what revenue streams are within a state’s grasp – for example, rentier states can tax the export of natural resources or, in states where formal employment is low, Value Added Tax (VAT) becomes the main source of fiscal revenue. However, by virtue of being complex systems made up of a mix of different taxes and tax rates (income, sales, wealth, property, transactions, value-added, progressive, regressive, etc.), including tax exemptions, tax systems always involve political choices and always promote specific positions and conceptualisations of, for instance, property, value, citizenship, and statehood. In doing so, they prioritise some groups’ demands and needs over others.

This politics of choice becomes evident in research on how tax administrations decide which taxpaying practices they consider harmful – who is audited, and who can be trusted (Boll, this volume; see also Boll Reference Boll2014). It is also apparent in studies that focus on locations where tax laws and policies are created and decisions are made about whether specific rules are an intended fiscal privilege, or rather endanger the idea of taxpayer equality (Martin Reference Martin2008). Choices also rely on who has, and who is seen to have, the legal expertise to create and shape tax policy. In addition, access to lawmakers to make one’s demands heard is unevenly distributed between taxpayers. For instance, when it comes to taxing global firms, this expertise is clustered in a couple of wealthy countries and amongst corporate taxpayers (Mugler Reference Mugler2019, this volume). What is taxable, and who decides this, is thus partly an effect of existing relationships of power and influence and demonstrates how normative orders manifest in tax systems.

The debates around what is taxable, when taxes can be extracted, and what taxes people are willing to pay are intimately tied up in ethics because tax mobilises ideas about the good and right (Venkatesan Reference Venkatesan2020: 147). Ethics are also central to how tax systems are built and legitimised, and how they are contested. Is it right of Denmark to have taxes on sugar, thereby intervening in everyday choices about what people eat, and making injunctions about healthy or unhealthy bodies? Is it good that taxes create financial barriers for sugar drink producers with the aim of stemming obesity epidemics in children? The ethics around taxes in a society tend to reflect the existing values of a society or the goals of government for a future society. However, as with political choices, they will only reflect the value of some people within a society, which opens questions about priorities, differentiations between the deserving and the undeserving, and particular worldviews with their consequent politico-ethical positions (Venkatesan Reference Venkatesan2020: 142).

Inheritance or estate tax, including rules for the taxation of property mortis causa,Footnote ⁶ has been a major concern of social reformers since the Enlightenment (Beckert Reference Beckert2010) and one that often causes strong public feeling with accusations of it being a ‘death tax’. For thinkers and politicians such as Thomas Jefferson, Alexis de Tocqueville, Montesquieu, and Georg W. F. Hegel, the bequest of wealth from generation to generation was problematic because ‘effortless’ inheritance was associated with the feudal order and stood in conflict with fundamental ‘modern’ values of equality and meritocracy. Since the mid-twentieth century, the issue around the ‘unearned’ acquisition of wealth has lost much of its significance in public debates (Beckert and Arndt Reference Beckert and Arndt2017) and, instead, the figure of the undeserving poor has become dominant (see Vicol, this volume). Inheritance, estate, and gift taxes are less prevalent today, and due to the generous tax exemptions where they exist, raise very little revenue. Only recently have policymakers rediscovered them for their potential to reduce historically high levels of wealth concentration and enhance equality of opportunity (OECD 2018; World Bank 2022). The debates around the legitimacy of inheritance and estate taxes involve multiple ethical elements – is it good to break cycles of inherited wealth and privilege, is it right to intervene in ‘family affairs’ at the moment of death?

Taxpayers themselves sometimes frame their own engagement or disengagement with fiscal systems in terms of ethics. Ethnography from Sweden on the topic of small-scale evasion and notions of fairness illustrates this well (Björklund Larsen Reference Björklund Larsen2018). Here, research participants explained their occasional tax evasion as an ethical act which protected the fairness of the tax system. For instance, one of Björklund Larsen’s interlocutors, a self-employed plumber named Anders, explained that doing occasional jobs ‘off the books’ was a response to the frivolous spending of politicians – as he was not getting a fair return on his taxes, the state did not have the legitimacy to tax all his income. Anders argued that his evasion helped balance the tax system and so protected, rather than undermined, its moral integrity.

Ethicised objections, political concerns, and vested financial interests often overlap in discussions over what is taxable, and disentangling them is tricky. Jeremy Rayner’s chapter’s description of two distinct land taxes in Ecuador highlights a lack of consensus over the aims and subjects of taxation in the country, and the plurality of material and ideological interests at play in such debates. The debates concerned the tax status of land within urban communities, comunas (communes), and a proposed value-added land tax, the ley de plusvalías (officially titled the Law to Avoid Speculation on the Value of Land and the Establishment of Taxes). Rayner investigates how the two taxes were contested in distinct ways: the first appealed to Indigenous rights and the interests of preserving a distinct form of land tenure and community organisation; the second used a discourse of private property rights and economic rationality to advocate against an anti-speculative land tax.

From two different perspectives, Vinzenz Bäumer Escobar (Reference Bäumer Escobar2020) and Mireille Abelin (Reference Abelin2012), too, show how groups who refuse to pay taxes on ethical grounds also have financial motivations which dovetail with ethical and ideological ones. Bäumer Escobar (Reference Bäumer Escobar2020) describes how a cooperative became the single taxpayer on behalf of members, who under its umbrella could safely operate as autonomous economic actors in small-scale business pursuits – thus circumventing what in their view were the excessive taxes otherwise characterising small-business ownership in Catalonia. Bäumer Escobar shows how those who choose to become part of Catalonian cooperatives both understood their actions as a protest against the prevailing economic system, with their construction of an alternative ‘fiscal commons’, and as a way of getting along financially in the face of business rates which rendered their small companies unviable.

Abelin (Reference Abelin2012) writes how wealthy taxpayers in Argentina see tax as a threat to their individual autonomy. Despite their outstanding tax debt, they insist that something has been taken away from them, namely their absolute right to property. The fact that the protection of their private property is a cost the state has to bear, and therefore this protection relies on the common pooling of funds, is another contradiction that they are unwilling to recognise. Abelin’s work makes the point that the fiscal dimensions of being a member of a political community are, in liberal democratic theory— to which these Argentine taxpayers make reference, but also liberals in other contexts – less forcefully articulated than the emphasis on ‘natural’ rights (Abelin Reference Abelin2012: 334). The periodic tax amnesties in the country also resulted in a common practice amongst the elite to ‘finance themselves through the state’. In other words, it became financially attractive for them to accrue tax debt rather than take bank loans (Abelin Reference Abelin2012: 334). For these groups, not paying tax made sense through a complex web of ethical, financial, and political reasonings.

These ethnographic examples are also vivid reminders that current debates in Western countries about what is taxable, be it sugar, wealth, or favours, are quickly framed as ideological – if you are a socialist, you support higher taxes that can, for instance, finance a well-resourced public health or social security system, whereas if you are a libertarian, you do not, because you emphasise freedom, responsibility, and self-actualisation. However, such framings limit our understanding and analysis of fiscal systems and the social relations they create. Fiscal historians and sociologists have repeatedly shown that the common assumption that specific sectors of societies (e.g. ‘left’, ‘right’, ‘business’) support specific tax systems or that specific types of states (e.g. ‘welfare’, ‘capitalist’, ‘developmental’) and economies (e.g. ‘advanced’, ‘emerging’) lead to specific forms of taxation is too simplistic (Martin & Prasad Reference Martin and Prasad2014). Their studies have pointed to the often unexpected societal and political alliances in the tax-bargaining process and emphasise cultural sensitivities, administrative capacities, or contingent events that shape the peculiarities of different tax systems. So, the fact that these debates are often framed in terms of socialism versus liberalism, and the ethics attached to each political position, demands attention. They also demonstrate how this builds on an amnesia of previous logics used in tax debates (for instance, cross-party commitments to embedded liberalism in post-war Europe and the United States), and the extent to which these ideas limit contemporary debates around what can be taxed and who is allowed to tax both domestically and globally.

What is rendered taxable is, to a great extent, a question of what is logistically possible to tax, in terms of, for instance, the quantifiability of value, techniques of standardisation, and infrastructure to collect data on citizenry. Equally, and as will be discussed in the final section, ‘what do taxes do’, collecting taxes also grows the potential of these same things. In other words, population data are needed to efficiently enforce tax laws, and tax collection harvests new data sets. One technique of making things taxable is to create formal structures that ensure activities become taxable. For instance, by insisting that certain services come with professional accreditation, the informal version is devalued. If one’s house has been rewired by a non-certified electrician, perhaps a friend or family member who is self-taught, the house loses value. Through laws around insurance, safeguarding, and quality standards, the non-taxable favours lose their value and instead become a potential liability.

But things can only be taxed when they can be measured. And so, the often violent nature of our over-audited world busies itself making the immeasurable measurable. Eräsaari’s (Reference Eräsaari2020) work on Helsinki timebanks and how the tax authority needed to change the while into a taxable unit is a vivid example of this. The meeting of different registers of value and the process of transacting across them is something to which anthropologist Jane Guyer (Reference Guyer2004) has paid ongoing attention. Guyer argues that the economy of twentieth-century Atlantic Africa needs to be understood as a meeting between Western capitalism and local economic forms, instead of one or the other. It is in this meeting between disjunctive currencies and diverging value registers, and the asymmetrical exchanges between them, that financial actors can creatively produce profits and marginal gains. Both Guyer’s and Eräsaari’s works remind us how things are made taxable through value translation and of the measurement and calculation technologies needed to carry out such translations.

A further aspect of what is possible to tax is the question of when. As money circulates through society, at what moments is it logistically and politically possible to tax it? Is it always when value has been added, or at any point when money or resources move and change hands? Timing is a crucial element of paying tax, as Robin Smith (Reference Smith2020) demonstrates in her ethnography about the ill-timed extraction of tax on small businesses in Croatia. Her interlocutors challenged the adoption of a tax reform that digitised and automated VAT collection at the point of sale rather than point of payment of invoice. The reform assumed that sale equalled payment, when in practice this was often not the case, since arrears commonly lasted six months to one year. The result was a looming crisis of illiquidity, where businesses were paying VAT long before receiving payment on their accounts for a given sale. In this situation, the when was a larger question than the what, and the tax lost legitimacy as it was out of step with the local rhythm of money movement, not because people were unwilling to pay.

Finally, infrastructure and resource capacity are crucial elements to the logistics of tax collection. This point is illustrated by Sheild Johansson’s (Reference Sheild Johansson2020) work where she describes the Bolivian local government’s lacklustre collection efforts of commercial licences and property tax from informal workers in peri-urban zones. Local authorities lacked the personnel capacity to register new property for taxation purposes, which at times resulted in eager taxpayers being involuntarily rendered informal. In addition to the municipal office’s lack of available staff to do the work, the employees explicitly said they did not want to produce more taxpayers who could make legitimate claims on urban services and infrastructure, which the same authority was responsible for delivering, as this would add even more pressure to their already oversized workloads.

Karen Boll’s contribution to this volume is another illustration of how resource capacity is a key factor in what can be taxed. She shows furthermore that ideas of how much tax revenue collection is permitted to cost vary, and can be controversial. Best tax practices tend to be shaped by prominent tax researchers, think tanks, or intergovernmental organisations (such as the OECD), but also by globally circulating ideas around new public management that stress public sector efficiency and accountability. Boll argues that such practices do not necessarily concord with the experiences of the on-the-ground work of the Danish tax collectors she studied. Her interlocutors wrestled with the fact that their new working tools such as risk analysis and the differentiated treatment of taxpayers – which segments taxpayers as either opponents or co-players – were an insufficient substitute to deal with the drastic downsizing of tax inspectors, a cut that came with the new strategy demanded from politicians and the tax authority’s headquarters. They experienced the new strategy as damaging the public reputation of the Tax Authority, and as a threat to conducting its core task of collecting revenue.

In sum, what is taxable in any society is always a mix of ethics, politics, and logistics. Making an object, person, activity, or moment taxable requires techniques. We suggest that interrogating these techniques is a key area of focus for the anthropology of tax. These foci lead us to the questions: what is the effect of making something taxable or non-taxable, and how can taxing something change the character or value of that thing or activity? In the following section, we pick up this line of thought by asking what taxes do and how they are made to do it.

Imaginaries and Categories

Taxes are central to the stories we hear and tell about our economies, and the categories through which we understand our economies, such as where value and wealth is created, who is contributing and who is not, formality and informality, and the very notion of private and public spheres. Anthropologists of tax have found that a productive angle through which to analyse the power of tax to categorise people and activities is to examine the effects of not taxing something, of declaring something un-taxable. Nimmo Elmi (this volume) describes how great swathes of Kenya’s population were deemed ‘economically unavailable’ and as a result, both colonial and current governments have little interest in either collecting tax from these areas or making promises of state provisions. In a similar case, Maximilien Zahnd (Reference Zahnd2022) details how the Alaska school tax of 1919 was only applied to people identified as ‘civilised’, thereby using fiscal systems to exclude groups and create racialised categories of identity.

Taxpayers’ occasional resistance to a state’s exclusionary tax practices and demand for inclusion into a state’s fiscal system is explored by Dora-Olivia Vicol in this volume in her chapter on Romanian migrants in the UK. She describes how her interlocutors seek actively to become taxable subjects to gain legitimate access to state benefits and to raise the status of their work. They want to be taxed on their labour since they believe that this will both signify them as hard workers and help them shed the stigma attached to them as the ‘laggards of Europe’. Vicol’s case study illustrates that labour that is taxed becomes different to labour, such as care, household, or informal construction and agricultural work, that is not taxed, and often not remunerated. For instance, it can be argued that non-taxed labour does not contribute to public goods, despite the many ways such essential and intimate work clearly does so, such as through the raising of the next generation of labourers and taxpayers – children.Footnote ⁷

In some countries, people receive a ‘personal allowance’Footnote ⁸ or ‘basic personal amount’,Footnote ⁹ which is the amount of money a person can earn before it becomes taxable. Sometimes, this is extended only to those on lower incomes, while elsewhere it is a universal exemption. Many low earners therefore pay no income tax on their salaries. While the argument for the personal allowance claims to protect the income of these workers, it also arguably shifts the meaning of their labour and their status. In this way, tax systems create powerful realities and stories about ‘us’ and ‘them’, ‘work’ and ‘non-work’, ‘wealth creators’ and ‘the unproductive’. Tax imaginaries thus inscribe and perpetuate belonging and exclusion. As Venkatesan has argued, taxes and tax-like payments produce ideas about ‘publics’ (Reference Venkatesan2020: 149–150). They do this by, for instance, demarcating communities of sharing, or generalised reciprocity, such as the nation-state – setting its boundaries and the benefits of national citizenship (Bhambra & McClure Reference Bhambra, McClure, Bhambra and McClure2022: 6). Tax payments also produce publics by shaping class identity, with, for instance, middle-class professionals cast as the ‘backbone of society’ (Sheild Johansson Reference Sheild Johansson2022).

Using the size of peoples’ tax payments as a signifier of their contribution and value to society is also a discursive move with material consequences because it can provide legitimacy for the restructuring and reordering of welfare systems, for instance, when societal contributions and the deservingness of social transfers are being negotiated. The non-tax payment assists high-contributing taxpayers to present themselves as the pillars of society who pay for the rest and who should be granted a tax cut, or other fiscal advantages, otherwise their hard work is considered unrewarded and their willingness to pay tax for the rest decreases (Sloterdijk Reference Sloterdijk2010). Importantly, and as set out in the first section, the sizable tax contributions, in terms of consumption taxes made by low earners, are often underestimated or ignored in such debates (Williamson Reference Williamson2017). Also ignored in these stories around valued contribution and economic productivity is the fact that income gaps are widening dramatically in most countries due to the ‘new spirit of capitalism’ (Boltanski & Chiapello Reference Boltanski and Chiapello2007) that, since the 1980s, increasingly facilitates ‘winner takes it all’ scenarios (Haskel & Westlake Reference Haskel and Westlake2017), and values singular, special, and creative work more than general, routine, and standardised forms of labour (Reckwitz Reference Reckwitz2019). In addition, neat tales about a nation’s taxpaying contributors and the impressive public goods they fund, such as the construction of the British welfare state, obscure global extractive relations as sources of wealth for the funding of social welfare of powerful nations (Bhambra Reference Bhambra2022). In other words, simplified stories about tax, and the taxpayer, obscure the actual contributions that many groups make to society, while overvaluing those of others.

Sociologist Kyle Willmott (Reference Willmott2017) extends this line of analysis by arguing that the very idea of the taxpayer, the ‘taxpayer subject’, and taxpayer money leads to particular ways of thinking about the economy and supports and morally justifies a liberal state – and its associated limited public spending – as well as enables a fantasy of a social contract between equals (see Burnyeat & Sheild Johansson Reference Burnyeat and Sheild Johansson2022 for elaboration). They do so by posing as the scrutinising investor, monitoring public investments, denouncing overspending, and being invested in electing the most suitable leader. The critical assessment of the idea of a social contract is one area where our anthropology of tax differs from New Fiscal Sociology scholars who explicitly theorise taxation as a social contract that multiplies a society’s infrastructural power (Martin et al. Reference Martin, Mehrotra and Prasad2009: 14).

The ‘taxpayer’ also plays a crucial role in stories mobilised around national debt and austerity, where the complexity of national economics is obfuscated by simple stories about pluses and minuses on a ledger and the need to act responsibly with taxpayer money. These stories both hide issues of how a nation’s debt or credit relies on interest rates and inflation and the actual ways that fiscal policies play into this, such as raising revenue through taxation being central to a state’s ability to borrow at low interest on credit markets (Brautigam et al. Reference Bräutigam, Fjeldstad and Moore2008), and are used to serve electoral politics. Tax also opens a door to unpacking debt, the power of debtors in economies (Mauss [1925] Reference Mauss1954; Roitman Reference Roitman2003), and how money itself is legitimised (Graeber Reference Graeber2011; Minksy Reference Minksy1986).

Governmentality: Making States, Markets, and People

Tax as a mode of governmentality is a clear area of continued intervention when anthropologists explore what taxes do, and includes the way fiscal systems govern societies and citizens, make states and markets, inspire instances of resistance, produce bodies, and shape gender and race relations.

In this volume, Olly Owen’s chapter explores techniques of governance through his focus on big data and knowledge creation by linking it to fiscal infrastructure, showing how tax collection not only extracts wealth but also extracts data about a population. Owen’s work builds on James C. Scott’s (Reference Scott1998) classic volume, Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed, which sets out how modern states govern, or fail to govern, through making society legible by techniques of standardisation such as censuses, cadastral maps, urban planning, and identity cards. The combination of material practices, accounting and registration demands, moral and political narratives, and legal enforcements of which tax policy and practices consist, makes it a technology par excellence for rendering citizens legible.Footnote ¹⁰

In her chapter on a tax lottery in Slovakia, Nicolette Makovicky explores another side of the relationship between governance and taxes, that of how fiscal projects aim to impact behaviour on a population level. The tax lottery was meant to incentivise people to ask for receipts at the point of any purchase, and by extension ensure VAT was added to all transactions, thus creating collectors out of other taxpayers (see also Björklund Larsen Reference Björklund Larsen2023 on tax lotteries). Makovicky describes the lottery as a form of ‘speculative governance’: experimental, unorthodox, and future-oriented; it sought to anticipate and shape human behaviour and environments, rather than simply control them. This move introduces another logic at play in fiscal reasonings – that of speculation. Makovicky argues that while the governance of public resources through financial speculation has become increasingly common due to the privatisation of what were once state-delivered services, the lottery case is an example of how this drive to harness risk and chance can be built into governance. As Makovicky’s chapter traces the reception and ultimate failure of the scheme, it illustrates how any policy aimed to govern always unfolds in sociocultural contexts with multiple, and often unpredictable, consequences. In this volume, Lotta Björklund Larsen, and as mentioned, Karen Boll, also offer insight into the perspective of tax collectors and their efforts to govern and influence tax behaviour. Björklund Larsen focuses on discourse production through the mottos employed by the tax authorities, tracing how the argument for compliance has shifted over time. Makovicky, Boll, and Björklund Larsen’s chapters all demonstrate how tax authorities are populated by people, driven by particular organisational logics, and function in shifting cultural contexts, which demand our attention.

Taxes are also employed by governments to manage wider financial worlds, such as shaping markets and, just as with the Slovakian tax lottery, this can have unintended consequences. This discussion is dealt with head on in Robin Smith’s chapter in this volume on the Croatian government’s attempt to tax spirits, which intervenes in a pervasive farming family pastime. She sets out the impact of fiscal reforms on the spirits market over time to demonstrate not only how taxes unmake formal markets, but also how they may unintentionally encourage informal ones to thrive. She shows how new interdependencies may arise in the reorganisation of local markets that contribute to the perpetuation of informal business (here, bootlegging), and how shared economic values cohabitate with and challenge the profit-maximising ethos of the ‘free market capitalism’ business owners seek to navigate. In doing so, she illustrates how values and rules may reach an impasse – that the values of citizens may stymie the state’s taxation efforts.

Insights about how taxation defines state–citizen relations, for instance casting people as formal or informal actors, as in Smith’s chapter, have led to theorisations by anthropologists that fiscal relationships constitute a kind of economic or fiscal citizenship (Guano Reference Guano2010; Roitman Reference Roitman2007), arguing that questions of taxation equity and the allocation of state benefits define a relational category between state and society. This links up with our discussion in the first pages of this introduction of a ‘fiscal sociality’. Anna-Riikka Kauppinen’s chapter in this volume tells a story of ‘fiscal sociality’ between a government and a citizen in which we follow Vaida, a small Ghanaian business owner who begins paying taxes with the hope of building an intimate relationship with the state, a state she (wrongly) assumes will act as a patron and nurture her and her business through the direct care of government agents, or state ministries buying goods from her business over that of others. Kauppinen traces Vaida’s growing awareness to the reality that her fiscal commitment will not, in fact, result in the government-directed business or new high-level relationships for which she had hoped.

On the other end of the income scale, Greg Rawlings’ chapter on citizenship-by-investment schemes explores how individuals use tax to monetise categories of citizenship to protect wealth. By showing how transnational movement and the ability to make homes across the globe are factors in the complicated interplay between wealth and the fiscal system, where they are simultaneously at odds and complicit in each other’s needs, he demonstrates how tax can be used as a technology to move beyond states, again decentring the state in tax studies. Rawlings’ objects of analysis are the systems and relations which allow for the commodification of citizenship, and the inherent inequality of these same systems.

Another key area of work on tax and governmentality is the exploration of how taxes shape gender and kin relations. Fiscal sociology scholars have been at the forefront of this research. For instance, Edward McCaffery (Reference McCaffery, Martin, Mehrotra and Prasad2009) explores the consequences of tax policy for the intimate sphere of the family and argues that many tax systems have significant sexist elements and effects, including recent historical policies of systemic unwillingness to even communicate directly with women (217). In his work, McCaffery shows how US tax laws favour single-earner families over dual-income ones (2009: 219). This bias was deliberately written into the law at a critical juncture after World War II with the aim of encouraging women back into homemaker roles (219). Once in place, these types of structural biases reproduce themselves. He also demonstrates how the effects of this bias fall unduly on the shoulders of lower earners who cannot survive on solely one income (218).

This engagement of fiscal systems in intimate lives and diverse identities dovetail with the relationship between race and finance, an area which has been established as a growing field of interest and importance across disciplines (Baradaran Reference Baradaran2017; Dannreuther & Kessler Reference Dannreuther and Kessler2017). This work has shown, for instance, how banking systems create barriers for non-white citizens to access credit and accumulate wealth (Baradaran Reference Baradaran2017). It argues that processes of finance, such as the categorisation of risk and uncertainty, cannot be colour blind, as ‘the very quantitative rationale of risk presupposes and is stabilised by qualitative judgements rooted in the social fabric of groups’ (Dannreuther & Kessler Reference Dannreuther and Kessler2017: 362). In this way, societal racism becomes codified into supposedly neutral calculations.

Similar steps have been taken in the area of fiscal studies, where research has demonstrated that in locations where racial heterogeneity is higher, government spending is lower (Alesina, Baqir, & Easterly Reference Alesina, Baqir and Easterly1999; O’Brien Reference O’Brien2017). According to this work, support for higher taxes wanes when a majority group feels its position is threatened by the increasing size of a minority one. But fiscal and financial systems do not just mediate the extant racisms and power relations of a given society. They are also crucial to entrenching them, codifying them in law, and through the categorisation of identities, as mentioned above, even creating them. Indeed, Robin Einhorn (Reference Einhorn2006) demonstrates that the US tax and benefit system was largely shaped to ensure the right of white slave-holders to own black people as property. As she argues, the fiscal system and limited public spending was built not in the pursuit of liberty, but in fact the opposite: enslavement. This racist history lives on in the US tax system, as evidenced in Dorothy Brown’s (Reference Brown2022b) work on the contemporary fiscal production of white wealth.

Rules and Privileges beyond the Nation State

That taxes are fundamental to the construction of the modern state itself – in that they determine the capacity of states to emerge and to maintain their bureaucratic, political, and law enforcement functions, including the armed forces – is well established in the social scientific literature on taxation (Bourdieu Reference Bourdieu and Bourdieu1998; Schumpeter [1919] Reference Schumpeter and Swedberg1991; Tilly Reference Tilly, Martin, Mehrotra and Prasad2009). They also have, however, a representational role, as Angus Cameron argues. The fiscal state ‘was never, … , simply a reflection of the territory over which the state already held sovereign jurisdiction,’ rather, fiscal systems were also ‘a means through which the norms of the state form are actively imagined, created, imposed and reproduced’ (Cameron Reference Cameron2008: 1146). That fiscal codes contain an imaginary of the state and its corresponding ‘national economy’ is not only the case today but, as Cameron explores, was already imagined and theorised in the first half of the seventeenth century by political economists as a national fiscal state – an exclusive sovereign space that is territorially bounded. This was a century before publicly financed, tax-based fiscal states were first formally institutionalised through the rise of statistical and administrative technologies. Taxes then enable the materialisation of a state as well as cast imaginaries of exclusive nation-centred economies, with corresponding rights and obligations.

While many anthropological tax studies, as we have shown, pay close attention to the practical and representational role of taxes and how deeply intertwined they are in national fiscal systems, there is also a body of literature on international tax rules and financial regulation (Maurer Reference Maurer2005, Reference Maurer2008a, Reference Maurer, Eckert, von Benda Beckmann and von Benda Beckmann2008b; Mugler Reference Mugler2019, this volume; Mugler, forthcoming; Rawlings Reference Rawlings2007, this volume) which explicitly counters the common assumption that fiscal boundaries coeval with the legal boundaries of nation states. Their studies demonstrate the effect of fiscal systems being treated as a functional subsystem of the territorial state rather than as something that determines its reproduction and transformation. By examining, for instance, the negotiation of international tax norms that define where global businesses and other global players get taxed, as a dynamic and socially embedded process, these anthropologists demonstrate that these rules are neither natural nor inevitable, but rather the outcome of fierce and multilayered political contestation. Their arguments expand narrow conceptual parameters in fiscal conversations, and help us think of taxation as something that can operate in a spatiality beyond the state.

Bill Maurer’s (n.d., Reference Maurer, Eckert, von Benda Beckmann and von Benda Beckmann2008b) and Greg Rawlings’ (Reference Rawlings2007) works on the Harmful Tax Competition project of the OECD (1998) are a case in point. Maurer and Rawlings show that questions such as ‘who has the legitimacy to define what a “harmful” tax practice is?’ or ‘what is the correct level of transparency of a tax haven in a world where fiscal sovereignty applies?’ are fought over by various state and non-state actors in myriad meetings and committees at the OECD. The project was particularly controversial, criticised as a neocolonial imposition on the weakest players in the offshore world, because the initiative aimed to name and shame tax havens, many of them non-OECD countries, into stricter compliance with international tax standards with which some OECD members themselves were not compliant.

Maurer (n.d.), however, makes the important point that such a reading of international tax policy debates ignores the moral-political conundrums that anthropologists of tax should tackle. For instance, supporting the idea that tax competition between countries is harmful because it leads to a race to the bottom depends, as he states, ‘on a vision of the maintenance of the fiscal state’s integrity, not its evaporation’ (Maurer n.d.: 17). This contradicts the longstanding anthropological insistence that the unit of thinking around economic justice issues should not be the Westphalian political imaginary or the modern territorial state. A similar moral-political conundrum arises when one recognises that regulatory initiatives, such as the Harmful Tax Competition project, are a form of soft-law imperialism by powerful states and undemocratic neoliberal intergovernmental organisations on small island nation-states and non-OECD members. However, this position ignores that these initiatives are attempts by multilateral organisations – even when such institutions simultaneously promote the liberalisation of trade and capital movements – to curtail capital mobility and restrain the fiscal privileges of elite and large taxpayers, and politically well-connected people.

Johanna Mugler’s work illustrates in a similar manner that a transnational perspective is productive when exploring current tax justice debates, as it places such demands for a fairer share from multinational corporations within the context of larger global distributional conflicts. Her study on international tax law negotiations at the OECD during the Base Erosion and Profit Shifting (BEPS) project demonstrates that taxation in these debates is not only a matter of more or less revenue for states and large businesses. International laws and regulations also promote and perpetuate specific conceptualisations of property and value that are key to today’s global capitalist world order and thus form part of the ‘code of capitalism’ (Pistor Reference Pistor2019; Dann & Eckert Reference Dann, Eckert, Foblets, Goodale, Sapignoli and Zenker2022). She shows in her contribution to this volume that current international tax norms which define how countries share the taxing rights to multinational enterprises’ (MNEs) global profits prioritise decision-making, design, and the possession of capital and intellectual property over production and manufacturing.

The effect is that countries that host factories, and also increasingly contract research and design laboratories, are legally considered as sites of the mere execution of ideas and decisions created elsewhere. As a result, they receive only limited rights to tax MNEs’ global profits. Such an allocation of taxing rights reinforces, as she argues, racialised assumptions that portray these host nations as incapable of innovating, as copycats and lagging behind the centres of Western tech innovation, again demonstrating continued imperialist logics. Moreover, they deepen entrenched divisions and valorisations between repetitive, manual labour and creative, mental work that help to justify the wage differentials and inequalities among employees and contractors of which global markets are constituted.

This body of anthropological tax work shows how entangled tax systems are in countries’ economic, industrial, and competition policies and in large corporations’ business models. Not only do fiscal systems prioritise some taxpayer groups and tax authorities over others but, as these studies show, the power to tax and make tax laws is globally unequally distributed. In theory, countries act as sovereign agents within international organisations, irrespective of size and power. However, this obscures the limitations of national sovereignty in the capitalist world order, meaning some agents have more leverage than others. Thus, questions of what is taxable and by whom cannot always be sufficiently dealt with when we restrict our analysis to the boundary of the nation. When income and money, or goods and services cross borders, when supply and value chains are globally dispersed, who is entitled to tax and why become less clear. It is to be expected that this regulatory uncertainty, while it benefits mobile and powerful actors, will lead to more distributional conflicts in the future, especially since material inequality continues to intensify (World Bank 2022).

Taxes and Colonialism

The transnational issues discussed in the previous section connect directly to histories of empires and exploitation. Tax rules and fiscal privileges have long functioned beyond nation-states in the form of colonialism (Bhambra & McClure Reference Bhambra, McClure, Bhambra and McClure2022: 2; Bhambra Reference Bhambra2022). Bhambra and McClure argue that conversations about tax, states, and empires are regularly treated as separate, rather than co-constitutive entities, and that to understand present inequalities, we need to recognise and examine their transregional imperial dynamics (Reference Bhambra, McClure, Bhambra and McClure2022: 2).

In her work on the Spanish Imperial state, McClure (Reference McClure, Bhambra and McClure2022) sets out the fiscal strategies of the Spanish Crown to finance the colonisation of Latin America. For instance, ‘The Crown granted mercedes (rewards) such as tax exemptions to those leading military conquest and it granted towns the privilege of raising their own taxation. In order to finance expansion, the Crown effectively pawned sovereign powers, including privileges of taxation’ (McClure Reference McClure, Bhambra and McClure2022: 21–22). The role of taxes in empire building is also evident in the history of the British Empire. England’s first imperial project of the early modern period, the colonisation of Ireland, was in a large part paid for with a tax on the income and assets of ordinary taxpayers (Brown Reference Brown, Bhambra and McClure2022a: 23). Later, in 1671, Irish taxes and the mortgaging of Irish land bankrolled the formation of the Royal Africa Company; in this way, Irish produce financed the emerging trade in enslaved Africans, and the first colony became the fuel for its successors (Brown Reference Brown, Bhambra and McClure2022a: 31–32).

The character of European Imperialism and the experience of the invaded countries were greatly shaped by the amount and type of revenue colonial administrations could extract from different sources, for instance, taxes on large corporations, taxes on trade, or poll taxes collected from a broad section of the population (Gardner Reference Gardner2012). Leigh Gardner argues that colonial tax systems crucially shaped the economies that Africa inherited at independence, creating long-term consequences for the economic and political development of many countries (Reference Gardner2012: 2–3). Elmi explores this in detail in her chapter on how the current program of tax digitalisation in Kenya is profoundly shaped by the earlier colonial policy on infrastructural development.

The violent effects of these colonial fiscal systems have significant present-day effects that extend beyond postcolonial settings (e.g. Elmi, this volume; Sheild Johansson Reference Sheild Johansson2018), to ongoing settler colonialism, as set out by Kyle Willmott in his chapter on First Nations in Canada. Willmott promotes a decolonising approach to tax, a perspective that challenges hegemonic ideas about good governance and the centrality of tax to it. He brings our attention to the racism and classism inherent in many fiscal systems, and explores tax not just as nation-building, but as nation-eliminating. His chapter interrogates how the Canadian government’s First Nations Financial Transparency Act (FNFTA), which claims to further fiscal sovereignty amongst the First Nations, in fact uses discourses of transparency and audit practices to produce self-governing, individualised subjects, thus entrenching the power of the settler government rather than promoting any real self-determination, and eroding indigenous sovereignty from the inside.

Taxes do many things in our world. In this section, we have explored how fiscal systems create imaginaries about bounded publics and spaces, which often perpetuate belonging and exclusion as well as obfuscate understandings of global and historical relations of exploitations and interdependence. These bounded orders both cast non-taxpayers as non-contributors and project imaginaries of the nation-state as the producer of its own national wealth and attendant welfare provision. Taxes are also everyday tools used to govern society and behaviours, reaching intimate spaces, including our bodies and the very things that we eat and drink. Fiscal systems codify social biases and culturally contested categories into legal rigidity and crude valorisation, such as credit scores and hierarchies in global value chains, which has significant impacts on global equality as well as race and gender identities and relations.