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1 Jeffrey Owens, Fundamental Tax Reform: The Experience of OECD Countries 1 (2005)

handle is hein.taxfoundation/bpehxz0001 and id is 1 raw text is: Feh,-,,,v 20Ni mhep nce the mid-198( ive engaged in fui x systems. These the need to proN cal environment: Lvestment, risk-tal id which provide , d lL-- - --- ndar refoi vide : onc king Is inc I OECD countri( iental reforms of Ms have been dri a more competiti which encourag, and entrepreneuw reased work incet rates were rarely less than 4) per cc today most are below 35 per centa increasing number fall below 25 pc These reforms, however, did n, recently, lead to a fall in the overall (measured by the tax-to-GDP ratic 1975 to 2000, most OECD countj the same time, governments are aware or e need to maintain taxpayers' faith in the tegrity of their tax systems. Fairness and nplicity have become the bywords of Formers. Fairness requires that taxpayers in nilar circumstances pay similar amounts of Simplicity requires that paying your taxe, ,comes as painless as possible (not some- ing easily achieved in modern societies) an( at the administrative and compliance costs collecting taxes are kept at a minimum. Almost all the tax reforms of the last two ,cades can be characterized as rate reducing d base broadening reforms, following the id given by the United Kingdom in 1984 d the United States in 1986. In the mid- 80s, most OECD countries had top arginal income tax rates in excess of 65 per nt. Today it is rare to find top rates above Iper cent and most OECD countries find emselves around or below 40 per cent. milarly, top statutory corporate income tax experienced an increase in this ratio. Som like Finland and France, saw the tax burd increase by almost a third. A small numbi countries - notably the United Kingdor F and the United States - experienced a st tax burden. It does appear, however, that s long-term upward trend peaked in 2000; d the latest figures available to the OECD d suggest that most countries are now beloN peak 2000 level. This paper provides a brief summary S major tax reforms, both in policy and adt istration, in OECD countries, with parti( emphasis on changes since the year 2000. Section 2 documents the general trend of reductions in both tax revenues and rates, Section 3 examines the diversity in tax policies across OECD countries, reflectin diversity in both economic circumstances policy objectives. Section 4 deals with developments in tax administration. Fina section 5 looks at some of the challenges ey Owens, C OECD's CG :fo r Policy and LOt, 1.11 .1 tax bt o). Froi -ries I-it th( int sin ref sin tax- be( thi th-C of deo am lea am rd