This article deals with a fiscal reform implemented in Chile during the late 1870s, when the country was suffering a severe economic and fiscal crisis, on the eve of the War of the Pacific. In 1879, the Chilean government introduced a new set of direct levies, taxing inheritance, income and wealth, despite the historic resistance of most of the economic elites to direct taxation in a highly unequal society. The process also shows that not all the economic elite avoided direct taxation. Despite other challenges faced by any developing country in extracting taxes from its population (e.g. lack of both proper information and human capital), during c.1879-1884 collection of these new direct taxes was successful, mainly on account of the improved extractive capacity built up during the preceding decades. Yet, by the mid-1890s all direct taxes (new and old) had been either derogated or transferred to local government (in some cases after being modified). Once again, Chilean central government depended entirely on indirect taxes, with export duties on nitrate being the most important. Nitrate provides a good example of an export boom shaping taxation for the worse; rather than increasing and diversifying the sources of revenue, a dominant sector of the Chilean economic elite decided to stop paying direct taxes and to make the state entirely dependent on the cycles of the international economy. However, some members of the economic elite, although defeated in their purpose, were aware of the wide range of benefits of keeping direct taxation: social justice, financial health and less vulnerability to trade cycles. Unfortunately, the balance of power favoured elite groups with enough power to hinder direct taxation.

Even though a vast literature has addressed perceptions and beliefs on taxes, progressivity and redistribution, few studies have specifically studied the perceptions of economic elites in this regard. This group is relevant for its affluence and influence, and therefore elites’ ideas and preferences have a major impact on tax-policy configuration. This study analyses the perceptions of the economic elite on redistribution and progressivity in Chile. Based on in-depth interviews and historical documents, such notions are examined by mixing concrete evaluations of income tax and value-added tax (VAT) and more general attitudes towards the role of the tax system in economic development. Results show that redistribution is negatively evaluated, which coexists with a strong willingness to contribute to poverty relief through social initiatives outside the state. Additionally, progressivity is sidelined while highlighting growth, tax neutrality, and incentives to entrepreneurship as the main priorities of tax design. The historical analysis shows that although the Chilean tax regime has always been based on indirect taxes and levies on natural resources, neoliberal reforms and ideological renovation during the Pinochet dictatorship narrowed the general framework of tax ideas among business and political sectors and reversed progressive advances in inequality reduction and direct taxation that had been made during the previous decades.

Socio-natural disasters remain underexplored events in economic history, even though they stress societies in several ways and are known for their relationship with institutional change. In this paper, we explore this issue showing that major earthquakes in Chile have become a window of opportunity for important fiscal reforms. Our findings indicate that there are two mechanisms to explain this relationship: first, reconstruction demands greater state expenditure and intervention; and second, the emergence of narratives that justify these reforms, such as patriotism and solidarity. However, data show that in the case of Chile, changes following disasters have had little impact on the overall tax structure of the country, and the historical preference for indirect taxes has been maintained, with limited power to impose taxes on high-income groups.

Several khipus—Inka knotted-string recording devices—were recently excavated at a storage facility at the Peruvian south coast site of Inkawasi, found buried under agricultural produce (i.e., chili peppers, peanuts, and black beans). These khipus contain a formulaic arrangement of numerical values not encountered on khipus from elsewhere in Tawantinsuyu (the Inka Empire). The formula includes first, a large number, hypothesized to record the sum total of produce included in a deposit, followed by a “fixed number,” and then one or more additional numbers. The fixed number plus the additional number(s) sum to the original large number. It is hypothesized that the fixed number represents an amount deducted from the deposit to support storage facility personnel. As such, it represented a tax assessed on deposits, the first evidence we have for a system of taxation on goods in the Inka Empire. It is proposed that the size and complexity of the storage facility at Inkawasi prompted the “invention” of a kind of financing instrument—taxation—not known previously from Inka administration. We also consider, but provisionally set aside, the alternative hypothesis that the fixed values recorded on the Inkawasi khipus could have represented amounts of seeds set aside from deposits for the next year's planting.

Traditional historical literature has stressed a generalised crisis throughout the world in the 17th century. First proposed for Europe with its numerous dynastic, religious and state conflicts, it has now been expanded to include Asia and the Middle East as well. It was also assumed that there was a significant crisis in the Americas, a theme which until recently has dominated the traditional literature. The claim that there was such a crisis was based on a series of classic studies by Earl J. Hamilton, Chaunu and Borah, among others. But new research has challenged this hypothesis and we will examine both these new studies as well as offering our own research findings on this subject.

Latin America is widely known as a low-tax region, but Brazil defies that description with a tax burden almost double the regional average. Though longstanding, Brazil’s position atop the tax burden ranking is not a historical constant. As recently as the early 1950s three other countries, Argentina, Chile and Uruguay, had similar or even heavier burdens. However, by the early 1980s Brazil had emerged as the most heavily taxed country in Latin America, and subsequent decades reinforced that status. This article seeks to uncover the roots of Brazil’s heavy taxation by examining the process through which it rose to the top of the regional ranking and managed to stay there. It emphasises two variables, the social class bases of public sector growth and the degree of support for democracy among key political actors. Despite changing over time, these variables have consistently interacted in ways that favour rising taxation.

This paper offers a long-term comparative study of Bolivian public finances using a new detailed database. First, it shows that Bolivian government revenues and expenditures were particularly small and volatile until the 1980s. Second, it stresses that, whereas the relative importance of social expenditure has grown constantly since the late 1930s, public revenues have always had an unbalanced structure. Finally, it confirms that budget deficits have been constant, at times reaching levels that were especially damaging for the overall economy. This suggests that the potential redistributive impact of Bolivian public finances was not necessarily (or not only) hindered by the lack of an explicit commitment towards redistributive expenses, but by an extreme vulnerability in the revenue side.

This article examines the political imbroglios surrounding the tenure of José García de León y Pizarro (1778–84) as visitador and president-regent of the Audiencia or Kingdom of Quito, in order to demonstrate the deep political divisions that emerged in Spain's Atlantic empire over the Bourbon Reforms. García Pizarro's policies strengthened the colonial state and produced a dramatic increase in crown revenues, but they also led to a groundswell of protest from local elites and even provoked the condemnation of his successors. These political struggles in Quito reveal the many competing viewpoints about the reform and renovation of Spanish Empire. The Bourbon Reforms emerged from a series of hotly contested political struggles on both sides of the Atlantic, leading to patchy and even distinctive outcomes in different regions of the empire. This political contestation also helps to explain why no coherent, commonly accepted plan for the reform of Spain's Atlantic empire ever emerged during the century.