¹ On the concept of neoliberalism, see Biebricher, Thomas, Neoliberalism and Law: The Case of the constitutional Balanced-Budget Amendment, in this issue.Google Scholar

² David Harvey, A Brief History of Neoliberalism Introduction (2005); Wendy Brown, Undoing the Demos. Neoliberalism's Stealth Revolution 20–21 (2015); Raymond Plant, The Neoliberal State Ch. 9 (2009). On the general characteristics of neoliberal political economy see Jessop, Bob, The Future of the Capitalist State 95–139 (2002). Leo Panitch, perhaps with extreme optimism considered that the initial regulation of markets after the 2008 subprime crisis meant the end of neoliberalism understood as the opposition between states and markets. See his “Introduction” to Ralph Miliband, The State in Capitalist Society (2009).Google Scholar

³ Wolfgang Streeck, Buying Time. The Delayed Crisis of Democratic Capitalism 6–26 (2014).Google Scholar

⁴ Id. at 47–96.Google Scholar

⁵ Id. at 97–164.Google Scholar

⁶ Id. at 5.Google Scholar

⁷ For an argument showing how neoliberal policy brings economic growth, see Paus, A., Economic Growth Through Neoliberal Restructuring? Insights from the Chilean Experience, 28 J. of Devel. Areas 31–56 (1994).Google Scholar

⁸ Colin Crouch, Making Capitalism Fit for Society 23 (2013).Google Scholar

⁹ Id. at 24.Google Scholar

¹⁰ Id. Google Scholar

¹¹ David Harvey, Spaces of Global Capitalism 29 (2006) [hereinafter Harvey, Global Capitalism]. See also Harvey, David, A Brief History of Neoliberalism (2005).Google Scholar

¹² See Harvey, Global Capitalism, supra note 11, at 43.Google Scholar

¹³ See also Crouch, Colin, Post-Democracy 31–69 (2004) [hereinafter Crouch, Post-Democracy]; Colin Crouch, The Strange Non-Death of Neoliberalism (2011).Google Scholar

¹⁴ See Crouch, Post-Democracy, supra note 13, at 31.Google Scholar

¹⁵ Id. at 32.Google Scholar

¹⁶ Many countries finance their public expenditure with a combination of tax revenue and public debt. This is not the case of a consistent neoliberal country as Chile, where public debt has been strictly controlled through a structural balance rule. According to this rule public expenditure cannot exceed tax revenue. This rule, nevertheless, has not been constitutionally adopted.Google Scholar

¹⁷ For an exposition of the neoliberal argument, as an economic argument, according to which taxes “become inconsequential,” see Kleinbard, Edward D., We Are Better Than This. How Government Should Spend Our Money 37–41 (2014).Google Scholar

¹⁸ See Brown, supra note 2, at 9–10, ch. 1.Google Scholar

¹⁹ Id. at 31.Google Scholar

²⁰ Id. at 33.Google Scholar

²¹ Id. at 35.Google Scholar

²² Id. Google Scholar

²³ Wolfgang Streeck, Citizens as Consumers, 76 New Left Rev. 27, 41 (2012).Google Scholar

²⁴ Id. at 42.Google Scholar

²⁵ Id. Google Scholar

²⁶ See Saffie, Francisco, Taxes as Practices of Mutual Recognition: Towards a General Theory of Tax Law Ch.3 (July 2, 2014) (unpublished Ph.D. thesis, Edinburgh University) (on file with author).Google Scholar

²⁷ See generally Harberger, Arnold C., The Incidence of the Corporation Income Tax, 70 J. of Polit. Econ. 3 (1962); Kyle Pomerleau, Eliminating Double Taxation Through Corporate Integration, Tax Found. (Feb. 23, 2015).Google Scholar

²⁸ See generally Goldberg, Daniel S., The Death of the Income Tax (2013).Google Scholar

²⁹ This is not strange as progressive income taxes were only established around the beginning of the twentieth century. See Piketty, Thomas, Capital in the Twenty-first Century 498–508 (2014).Google Scholar

³⁰ Quoted in Michael Stolleis & Thomas Dunlap, A History of Public law in Germany 1914–1945 224 (2004).Google Scholar

³¹ Id. at 219.Google Scholar

³² Judith Freedman, Taxation as Legal Research, in Taxation an Interdisciplinary Approach 15 (Margaret Lamb, Andrew Lymer, Judith Freedman & Simon James eds., 2004).Google Scholar

³³ According to Hensel, the legal duty to pay taxes is “born with the realization of the taxable event.” Albert Hensel, Derecho Tributario 154 (2005).Google Scholar

³⁴ For further details of this argument, see Saffie, Francisco, Taxes as Practices of Mutual Recognition: Towards a General Theory of Tax Law Ch.2 (July 2, 2014) (unpublished Ph.D. thesis, Edinburgh University) (on file with author). For another way of putting this point but from a different conception of tax law, Kleinbard argues that the structure of the legal duty to pay taxes raises avoidance as a moral and not a legal problem, even if he recognizes that “for every real-life action in the commercial sphere, one finds a tax description and a tax operator, that together yield a tax consequence.” Edward Kleinbard, Stateless Income and Its Remedies, in Global Tax Fairness 132 (Thomas Pogge & Krishen Mehta eds., 2016). For Kleinbard, therefore, there is no underlying substance to the artificiality upon which the legislature structures tax obligations.Google Scholar

³⁵ For details of this process see generally Juan Gabriel Valdés, Pinochet's Economists. The Chicago School in Chile (1995).Google Scholar

³⁶ This is not the place to analyze why it failed, though there are good reasons to believe that the U.S. and Chilean capitalists had responsibility in the failure of the economic system by generating the economic crisis. What happened in Chile is a dramatic case that illustrates Streeck's point about the way in which capital can control democracy.Google Scholar

³⁷ Harberger's work, supra note 27, was particularly influential on this issue.Google Scholar

³⁸ In the words of IMF No. 14/219, “Chile's full integration system is probably one of the purest in design.” International Monetary Fund, Chile: Selected Issues Paper, IMF Report No. 14/219 (July 2014).Google Scholar

³⁹ Id. Google Scholar

⁴⁰ In Chile there is no corporate tax. As I explain in the main text, the income tax is fully integrated so that tax paid by firms is nothing but an advance of the shareholders or partners' income tax.Google Scholar

⁴¹ Generally, it is understood that a tax is regressive when those who have less income end up paying proportionally more taxes than those who have more income. For an argument according to which saying of a particular tax that it is progressive or regressive is myopic for not considering public expenditure, see generally Liam Murphy & Thomas Nagel, The Myth of Ownership. Taxes and Justice (2004).Google Scholar

⁴² Fairfield, Tasha A. & Michael Jorrat, Top Income Shares, Business Profits, and Effective Tax Rates in Contemporary Chile, 62 Rev. of Income and Wealth 1 (2016). The Gini coefficient “is a way of comparing how distribution of income in a society compares with a similar society in which everyone earned exactly the same account. Inequality on the Gini scale is measured between 0, where everybody is equal, and 1, where all the country's income is earned by a single person” (http://www.bbc.com/news/blogs-magazine-monitor-31847943).Google Scholar

⁴³ See generally Fairfield, Tasha A., Business Power and Tax Reform: Taxing Income and Profits in Chile and Argentina, 52 Latin Amer. Pol. and Soc'y 2 (2010); see also Fairfield, Tasha A., Private Wealth and Public Revenue in Latin America. Business Power and Tax Politics (2015).Google Scholar

⁴⁴ Kleinbard, supra note 34, at 3.Google Scholar

⁴⁵ For a particularly interesting argument on these lines, see Dietsch, Peter, Catching Capital. The Ethics of Tax Competition 23–25 (2015).Google Scholar

⁴⁶ See generally Reuven Avi-Yonah, International Tax as International Law (2007).Google Scholar

⁴⁷ Id. at 3.Google Scholar

⁴⁸ Jeffrey Owens & Mary Bennett, OECD Model Tax Convention, OECD Observer (Oct. 2008), http://www.oecdobserver.org/news/archivestory.php/aid/2756/OECD_Model_Tax_Convention.html (showing more than 3,000). Double Tax Treaties, ICAEW, http://www.icaew.com/en/library/key-resources/double-tax-treaties (showing over 1,300). According to Rixen, “in 2004, 90.6 per cent of all possible bilateral treaties among OECD members were in place.” See Rixen, Thomas, The Political Economy of International Tax Governance 115 (2008).Google Scholar

⁴⁹ Tax Treaties, Tax Justice Network, http://www.taxjustice.net/topics/corporate-tax/tax-treaties/. See also the description of the political resistance of the initial proposals for a financial tax before the 2008 financial crisis in Peter Wahl, More Than Just Another Tax, in Pogge and Mehta, supra note 34, at 205–07.Google Scholar

⁵⁰ Henry, James S., Let's Tax Anonymous Wealth, in Pogge & Mehta, supra note 34, at 37.Google Scholar

⁵¹ Krishen Mehta & Erika Dayle Siu, Ten Ways Developing Countries Can Take Control, in Pogge & Mehta, supra note 34, at 340.Google Scholar

⁵² Lee Corrick, The Taxation of Multinational Enterprises, in Pogge & Mehta, supra note 34, at 175.Google Scholar

⁵³ Kleinbard, supra note 34, at 129.Google Scholar

⁵⁴ Kleinbard makes a similar point, supra note 34, at 144. Nevertheless, I do not share his view that this is only, or mainly, a problem of the system being designed over non-commercial and noneconomic premises, id. at 145, and hence of the connection principle to tax MNC—in his argument a “territorial tax model”—for the reasons given in the last Section of this Article.Google Scholar

⁵⁵ Nicholas Shaxson & John Christensen, Tax Competitiveness – A Dangerous Obsession, in Pogge & Mehta, supra note 34, at 266.Google Scholar

⁵⁶ Kleinbard, supra note 34, at 132. When finalizing this Article the European Commission ruled that Apple has to pay €13 billion plus interest in taxes because of illegal tax benefits given by Ireland, as reported by Sean Farrell & Henry McDonald, Apple Ordered to Pay €13bn After EU Rules Ireland Broke State Aid Laws, Guardian (Aug. 30, 2016), https://www.theguardian.com/business/2016/aug/30/apple-pay-back-taxes-eu-ruling-ireland-state-aid.Google Scholar

⁵⁷ Wahl, supra note 49, at 208.Google Scholar

⁵⁸ In Chile, for example, a tax reform was recently passed to increase revenue to finance the public education reform. A reform that could be read as the triumph of the 2011 student movement. As the tax reform will only be put into effect in 2018, however, there has been space to increase the opposition to it and some are strongly lobbying to abolish it.Google Scholar

⁵⁹ See all the proposals contained in the recently published book edited by Pogge & Mehta, supra note 34.Google Scholar

⁶⁰ First Steps Towards Implementation of OECD/G20 Efforts Against Tax Avoidance by Multinationals, OECD (Feb. 6, 2015), http://www.oecd.org/ctp/first-steps-towards-implementation-of-oecd-g20-efforts-against-tax-avoidance-by-multinationals.htm.Google Scholar

⁶¹ OECD/G20 Base Erosion and Profit Shifting Project, Explanatory Statement 4, http://www.oecd.org/ctp/beps-explanatory-statement-2015.pdf.Google Scholar

⁶² Id. at 9.Google Scholar

⁶³ Id. Google Scholar

⁶⁴ Piketty, supra note 29, at 515.Google Scholar

⁶⁵ Id. at 516.Google Scholar

⁶⁶ Id. at 517.Google Scholar