Financing Security Through Elite Taxation: The Case of Colombia's 'Democratic Security Taxes'

摘要

Governments across the developing world in general, and Latin America in particular, tend to have difficulty in raising taxes among elites. Beginning in 2002, however, the Colombian government adopted a series of wealth taxes among the wealthiest taxpayers. Revenue from the tax was earmarked for security expenditures and represented about 1 % of GDP. Drawing on elite interviews, surveys, government documents, and media sources, this article studies the factors behind the adoption of the tax. It finds that three main factors make the elite tax possible, namely the combination of fiscal and security crises, cohesion among business and government elites, and improving perceptions of the government's provision of public safety. The findings should inform efforts in the developing world, where low levels of fiscal extraction, deteriorating security conditions, and mounting public safety expenditures are common.