Introduction

As Benjamin Franklin had intended to say, there are three things in life about which one can be certain: death, taxes and tax reform. Rare is the government that does not make numerous annual modifications to its tax system. Almost as rare are tax changes that are fully comprehensible to the average person in the street. Amendments typically concern the definition of ‘allowable expenses’ for investments, the standard of handwritten receipts acceptable for sales tax administration or the cut-off dates for appeal against income tax assessments. Dramatic changes in systems or rates are the exception. To the worm's eye, tax reform is a continuous stream of small, technical modifications to law and procedure that reflect specific national circumstances, the lobbying of diverse local interest groups, and the continual efforts of public finance specialists to reconcile the competing objectives of governments' fiscal activities.

The bird's-eye view is very different: there are global patterns of tax reform. Public finance has always been one of those domains where governments generously borrow ideas and institutional technologies from one another. Social welfare systems, for example, differ widely from one country to the next. By contrast, national tax systems, like central banks, seem more like members of a distinct global family. Their family resemblances have become stronger over the past two or three decades. Most governments have participated in a genuinely global process of tax reform, affecting rich and poor countries alike.