Taxation

A Fieldwork Research Handbook

Lynne Oats

• Publisher: Routledge
• Year: 2012
• ISBN:
  9781136333675
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Taxation is a subject of enquiry that cuts across a range of disciplines, including law, economics, politics, psychology, history and accountancy, to name a few. However, research into taxation as a social and institutional phenomenon – rather than as abstraction from the real world – is largely neglected.

Taxation: A Fieldwork Research Handbook opens up new avenues of enquiry in the research of taxation by offering suggestions on how research might be conducted into actual tax practice, rather than abstract models. This book:

• Introduces tax as a field of enormous potential for research to all social scientists
• Explains the methodological issues relating to tax research
• Provides new opportunities for tax researchers to widen the scope of their enquiries
• Encourages researchers to think differently about this subject

Given the importance of taxation to modern society, not only as a revenue raising mechanism, but also as a tool of governance used to influence social actors, this unique text is a vital read for any social science researcher interested in this subject.

Part I

Researching Tax

Tax research is not known for its reflexivity, and methodology is something we tend not to talk about much, even in work where it assumes central importance such as the capital markets based work within tax accounting scholarship. Tax researchers come from a variety of disciplinary backgrounds, and may have some research training acquired from that particular disciplinary perspective. What we often lack is an understanding of research approaches and methods from other disciplines, and so the purpose of Part I is to begin to think about some broad issues relating to actually doing tax research, from whatever disciplinary background we come, followed by some more specific discussions of particular methodological approaches.

Although some of the chapters contained in this part reflect positivist approaches (Chapters 5, 6 and 8 in particular), the overall leaning of the book is towards interpretive work, and this is reflected in the choice of contributions, not only here but in later parts also. This part is not intended to be a ‘research methods’ discussion, although some methods are discussed in some detail. Most of us have ready access to generic methods texts that help with specific research design. Rather, this part of the book is designed to introduce the reader to some broad issues in a tax specific context; in particular it will introduce some social research concepts to those whose previous training may have omitted this, for example legal scholars and those who have entered research from a background in tax practice.

1

Tax as a Social and Institutional Practice

Lynne Oats

Introduction

It is without doubt currently an exciting time to be a tax researcher, notwithstanding the institutional pressures in terms of measurement of research output (which is particularly acute in the UK). The past decade has witnessed important advances in tax research across the various disciplines for which it is an area of interest. In addition to numerous journal articles across the spectrum of disciplines, a number of books and edited collections have appeared that indicate a burgeoning interest in tax scholarship. To canvass some recent contributions (with apologies for any missed):

In law, the publication in 2002 of Mumford’s book Taxing Culture enhanced a growing acknowledgement of the need to step outside of traditional black letter, formalistic, modes of enquiry and draw on historical analyses and cultural theories in understanding how tax works in practice.

This was followed closely by Valery Braithwaite’s Taxing Democracy in 2003, which showcased the work of the Centre for Tax System Integrity in Australia. Braithwaite’s later (2008) work Defiance in Taxation and Governance highlights the interconnections between her research findings and those of her colleagues in a tax-specific context and the broader governance arena. In furthering the debates on tax regulation, the 2007 special issue of Law and Society also brought together a set of papers that contribute to raising the profile of tax regulation as an important avenue for enquiry.

In 2004, Lamb et al.’s Taxation: An Interdisciplinary Approach to Research illustrated how tax is analysed from a range of disciplinary perspectives and those perspectives can be usefully integrated, although often are not. Without underestimating the difficulties entailed, Lamb and her co-authors argue the case for complementing multidisciplinary perspectives: that is approaching tax as an object of inquiry from the viewpoint of single disciplines, with truly interdisciplinary work that adopts perspectives and approaches from at least two disciplines. John Braithwaite’s 2005 Markets in Vice, Markets in Virtue is a good example of how we can draw on a variety of disciplinary lenses coupled with fieldwork to add to our understanding of, in this case, US and Australian tax-shelter activity in practice.

More recently, Infanti and Crawford’s Critical Tax Theory, published in 2009, brings together abridged versions of some 50 previously published tax law articles, primarily from the US, which push the boundaries of analysis and open up tax as an important object of critical scrutiny. This work is particularly important in gathering together in one place work that would potentially be overlooked by scholars from outside the close circle of US tax law professors, having been published in sometimes difficult-to-find places. In accounting, the more modest 2010 special issue of Critical Perspectives on Accounting brought together a group of papers further illustrating the richness of tax as a field of inquiry for critical scholarship.

A resurgence of interest in fiscal sociology saw the publication of Martin et al.’s The New Fiscal Sociology in 2009, a collection of papers from authors across a variety of backgrounds exploring tax from a variety of sociological perspectives. This work serves to remind us of the importance of thinking about tax phenomena not only diachronically, but also contextually.

In history, the collections published by the Cambridge Centre for Tax Law under the title Studies in Tax Law History, demonstrate the breadth of interest in tax as an object of historical inquiry, as does Nehring and Schui’s (2007) Global Debates About Taxation. Peter Harris’ (2006) Income Tax in Common Law Jurisdictions to 1820 meticulously traces the historical emergence of income tax and its spread across a variety of jurisdictions. Economic historian Martin Daunton’s (2001, 2002) two works provide an authoritative history of British taxation from 1799.

In the behavioural sciences, work done by Kirchler (2007) The Economic Psychology of Tax Behaviour, and Valery Braithwaite’s (2008) Defiance in Taxation and Governance exemplifies new understandings emerging from psychological analyses. Torgler (2007) has popularised the concept of tax morale, and Alm et al. bring together a set of essays dealing with tax compliance in their 2010 book Developing Alternative Frameworks for Explaining Tax Compliance, and demonstrate the current move to improve our understanding of compliance motivations beyond the traditional deterrence models.

In political science, Steinmo’s (1996) Taxation and Democracy demonstrates the value of institutional theory (historical institutionalism) as well as comparative work. Rixen’s (2008) The Political Economy of International Tax Governance showcases developments in rational choice institutionalism as applied to the international tax arena. Stephen Ganghoff (2006) The Politics of Income Taxation is another example of the value of comparative work, underscoring the similarities and differences between income tax systems in different jurisdictions.

Brautigam et al. (2008) Taxation and State Building in Developing Countries brings together a collection of papers that consider taxation as a key element of the statecitizen relationship. This collection shines a light on aspects of tax and development, a theme that is attracting increasing attention, not least through the work of non-governmental organisations (NGOs) and various polemicists such as those associated with the Tax Justice Network.

In economics, Slemrod and Bakija’s (2008) Taxing Ourselves attempts to popularise, with considerable success, current economic debates and developments in tax policy. The substantial work of the Mirrlees Review¹ in the UK brings together a series of papers exploring prospective developments in tax policy, primarily from an economic viewpoint. The first volume is Dimensions of Tax Design and the second is Tax by Design, both available online.

The attention of feminist scholars to tax issues is reflected in McCaffery’s (1997) Taxing Women, and more recently Mumford’s (2010) Tax Policy, Women and the Law: UK and Comparative Perspectives, which, together with numerous individual articles, some of which are included in Infanti and Crawford (2009), demonstrates the power of feminist critique to undermine taken-for-granted assumptions about how tax policy affects us all.

Yet tax research remains paradoxical. Its inherent interdisciplinarity brings depth in terms of the variety of lenses through which it can be viewed (Lamb et al. 2004), but as the inevitable omissions from the previous discussion of recent scholarship show, it is very difficult to keep abreast of developments across a wide range of disciplines, and so interdisciplinarity is a double-edged sword: fragmentation arguably leads to dilution in terms of the wider impact of our scholarship.

There is also evidence of a systematic, if to some extent inadvertent, dismissal of tax from academic debate across a range of disciplines, which is cause for considerable concern, perhaps arising from a mistaken assumption that tax as a field of enquiry is being dealt with adequately in other disciplines. As Clemens (1999: 518) astutely observed in her review of McCaffery (1997) and Howard (1997), ‘[t]axation has been ignored for precisely the same reason that it turns out to be so fascinating: taxes are obscenely complex’ and further ‘[c]loaked in an appearance of technical rationality, the politics of taxation are deeply structured by imperfect information, institutional embeddedness, and ideological commitments’ (ibid.).

The neglect of tax is then compounded by dominance of positivist approaches in those areas where tax is accepted as a valid field of inquiry. The dead hand of positivism pervades tax research in a variety of ways that contribute to the perception of tax as a highly technical endeavour, dealt with by a cadre of specialised experts not to be scrutinised by lay concerns (Boden et al. 2010). Importantly, and partly because of our research training, often the implications of unstated positivist assumptions are not fully acknowledged, or even appreciated, and the limitations of work done under this banner are often overlooked. This is not to say that positivist enquiry does not add to the body of tax knowledge: indeed, it produces some significant and important insights. However, tax is very much a social and institutional practice and this needs to be recognised as such to a much greater extent. Despite the recent inclusion of ‘the social’ (for example, in the guise of social capital) in recent behavioural work, such as on tax compliance (see Alm et al. 2010), arguably there is still not enough attention paid to this important aspect of tax as an institution. The other important aspect of tax as a social and institutional practice is the word practice. Armchair theorising is an important endeavour and not to be discouraged; however, a neglected aspect of tax scholarship is what actually happens in the real world when tax rules and regulations are put into play.

The title of this chapter is adapted from an influential piece in accounting scholarship. In 1994 Hopwood and Miller produced a book entitled Accounting as Social and Institutional Practice, which was the first major collection of critical and socio-historical analyses of accounting, all of which challenged the conventional view of accounting as a mere technical practice. This, amongst other calls for diversity, led to a wide and growing range of accounting scholarship that calls into question the positivist mainstream. It is in the same spirit that this current volume is offered.

One of the purposes of this book is to showcase the potential for more interpretive fieldwork research in tax, as an extension of and complement to existing research approaches. Interpretivism is a broad church with a growing influence in the wider social sciences, although not without difficulties as a result of methodological and epistemological confusion (see Chapter 2). In part, this is attributable to the difficulties in establishing criteria for the adequacy of knowledge claims produced within an interpretive tradition, which links back to the two points made earlier. We need to become more reflexive and receptive to methodological and philosophical debates taking place in other disciplines. However, we also need to challenge the hegemony of positivist approaches.

This book is divided into three parts. The first of these deals with questions of methodology, in a selective review of particular forms of inquiry following an initial discussion of the questions we need to ask in order to begin to be more reflexive about our research efforts. Two of these chapters demonstrate more practical aspects of implementing methodology: Boll in her discussion of ethnography, and Doyle, Frecknall Hughes and Summers in their description of the development of a survey instrument. These two are, of course, poles apart in their respective philosophical approaches, but are nonetheless illustrative of the rich possibilities available to us to draw from other areas of the social sciences in studying tax phenomena.

Part II of this book introduces a variety of social theories that can be used fruitfully to help us to think differently about tax. Similarly to the previous part, it does not purport to give exhaustive coverage of possible theoretical frameworks, and is to some extent an eclectic mix. There are some notable omissions, for example feminism and legal philosophy: these are not covered as they are dealt with admirably in other works and here will only be referred to in passing.

Part III of the book is entitled ‘Tales from the field’, and is designed to present some recent fieldwork studies from different traditions. Some, but not all, draw on the social theories discussed in Part II. The aim is to provide some inspiration for future tax research and to foster a spirit of creativity in the way we approach the important task of improving our knowledge of tax in all its myriad guises.

Note

1 www.ifs.org.uk/mirrleesReview

References

Alm, J., Martinez-Vazquez, J. and Torgler, B. (2010) Developing Alternative Frameworks for Explaining Tax Compliance, Abingdon: Routledge.

Avery Jones, J., Harris, P. and Oliver, D. (eds) (2008) Comparative Perspectives on Revenue Law: Essays in Honour of John Tiley, Cambridge: Cambridge University Press.

Boden, R., Killian, S., Mulligan, E. and Oats, L. (2010) ‘Critical perspectives on taxation’, Critical Perspectives on Accounting 21(7): 541–544.

Braithwaite, J. (2005) Markets in Vice, Markets in Virtue, Oxford: Oxford University Press.

Braithwaite, V. (2003) Taxing Democracy. Understanding Tax Avoidance and Evasion, Aldershot: Ashgate.

Braithwaite, J. (2007) ‘Responsive regulation and taxation: Introduction’, Law & Policy 29(1), January: 3–10.

Braithwaite, J. (2008) Defiance in Taxation and Governance, Cheltenham: Edward Elgar.

Brautigam, D., Fjedlstad, O. and Moore, M. (2008) Taxation and State Building in Developing Countries, Cambridge: Cambridge University Press.

Clemens, E.S. (1999) ‘Good reasons to stop avoiding taxes’ (review), Law & Social...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright
• Table of Contents
• List of illustrations
• Notes on contributors
• Preface
• Part I: Researching tax
• Part II: Possibilities of social theory
• Part III: Tales from the field
• Index