Description

From 1996 to 2000, Microsoft Corporation, home to one of the richest men in the world paid 3 billion in taxes at the same time that it reaped the benefits of 12 billion in tax breaks. How could it have paid so little? What can be done to make the tax system more equitable?

In this sweeping comparative study of taxation in the United States and Australia, John Braithwaite shows that even as governments in the Western world have become increasingly sophisticated tax collectors, a competitive and ruthless market in advice on tax avoidance has developed. Tax avoidance, like any good, follows market logic: as the supply increases, so does demand. The same competitive forces in the late twentieth century which have driven down prices and sparked efficiencies in the production of fast food or computer parts have helped stimulate the markets for "bads" like tax shelters and problem gambling.

How can we change the course of a growing supply cycle for "bads"? Braithwaite draws the surprising conclusion that effective regulation could actually flip markets in vice to markets of virtue. By creating incentives for tax compliance and by regulating promoters of tax avoidance more assiduously, governments could stimulate suppliers of tax avoidance to become providers of legitimate tax advice. Advocacy of virtue coupled with effective regulation in a market society ensures that markets run to virtue and tax systems become more just.

Essential reading for anyone involved in policy, governance, and regulation, Markets in Vice, Markets in Virtue provides a blueprint for restoring the equity of Western tax systems and a breakthrough theory of how regulators can support markets in virtue and curtail markets in vice.

Reviews

"This is a lively book, full of insights and provocative ideas about regulation...It works at many levels: as empirical study of tax avoidance and regulation, as illustration of sophisticated application of social science theory, and as a vehicle for new theoretical ideas about regulation."--Bill Martin, Flinders University, Adelaide, for Contemporary Sociology

"With characteristic style and ebullience, John Braithwaite cuts through the complexities of tax avoidance, and drawing on extensive practical knowledge offers four key strategies for flipping 'markets in vice' into 'markets in virtue'. This highly readable book will be of interest both to tax specialists and to those concerned about the effectiveness of regulation, but who never thought that tax could be interesting. In Braithwaite's hands, it is."--Julia Black, Reader in Law, London School of Economics

"This outstanding book draws on a wide range of interviews to offer a compelling depiction of the growth of the tax shelter industry in both Australia and the United States, and of the ways it might effectively be combatted by sophisticated regulators. It should be required reading for anybody interested in the tax shelter problem and, more broadly, the problem of how contemporary competition is creating markets in vice and how they may be turned into markets in virtue."--Professor Reuven Avi-Yonah, University of Michigan

"Written in John Braithwaite's engagingly direct style, this book casts a bright light on some of the arcane practices that underlie one of the most crucial issues of the 21st century: whether tax systems can continue to provide funding for public services in ways that can be accepted as fair and just. Its penetrating analyses and practical proposals should be read not only by tax advisers and officials but by every concerned citizen."--Prof. Sol Picciotto, Lancaster University Law School

"Professor John Braithwaite, probably Australia's most internationally renowned social scientist has written an original, sparkling, readable analysis that opens our eyes to aggressive tax avoidance behaviour in the United States and Australia, and the only partly successful regulatory attempts to deal with it."--Professor Allan Fels, AO Foundation Dean, The Australia and New Zealand School of Government

"This is a lively book, full of insights and provocative ideas about regulation...It works at many levels: as empirical study of tax avoidance and regulation, as illustration of sophisticated application of social science theory, and as a vehicle for new theoretical ideas about regulation."--Bill Martin, Flinders University, Adelaide, for Contemporary Sociology

Product Details

252 pages; 18 line illus.; 6-1/8 x 9-1/4; ISBN13: 978-0-19-522201-2ISBN10: 0-19-522201-6

About the Author(s)