Tax evasion, inequality, and progressive taxes : a political economy perspective

The standard approach to tax compliance applies the economics-of-crime methodology pioneered by Becker (1968): in its first application, due to Allingham and Sandmo (1972) it models the behaviour of agents as a decision involving a choice of the extent of their income to report to tax authorities, given a certain institutional environment, represented by parameters such as the probability of detection and penalties in the event the agent is caught. While this basic framework yields important insights on tax compliance behavior, it has some critical limitations. Specifically, it indicates a level of compliance that is significantly below what is observed in the data. This thesis revisits the original framework with a view towards addressing this issue, and examining the political economy implications of tax evasion for progressivity in the tax structure. The approach followed involves building a macroeconomic, dynamic equilibrium model for the purpose of examining these issues, by using a step-wise model building procedure starting with some very simple variations of the basic Allingham and Sandmo construct, which are eventually integrated to a dynamic general equilibrium overlapping generations framework with heterogeneous agents. One of the variations involves incorporating the Allingham and Sandmo construct into a two-period model of a small open economy of the type originally attributed to Fisher (1930). A further variation of this simple construct involves allowing agents to initially decide whether to evade taxes or not. In the event they decide to evade, the agents then have to decide the extent of income or wealth they wish to under-report. We find that the ‘evade or not’ assumption has strikingly different and more realistic implications for the extent of evasion, and demonstrate that it is a more appropriate modeling strategy in the context of macroeconomic models, which are essentially dynamic in nature, and involve consumption smoothing across time and across various states of nature. Specifically, since deciding to undertake tax evasion impacts on the consumption smoothing ability of the agent by creating two states of nature in which the agent is ‘caught’ or ‘not caught’, there is a possibility that their utility under certainty, when they choose not to evade, is higher than the expected utility obtained when they choose to evade. Furthermore, the simple two-period model incorporating an ‘evade or not’ choice can be used to demonstrate some strikingly different political economy implications relative to its Allingham and Sandmo counterpart. In variations of the two models that allow for voting on the tax parameter, we find that agents typically choose to vote for a high degree of progressivity by choosing the highest available tax rate from the menu of choices available to them. There is, however, a small range of inequality levels for which agents in the ‘evade or not’ model vote for a relatively low value of the tax rate. The final steps in the model building procedure involve grafting the two-period models with a political economy choice into a dynamic overlapping generations setting with more general, non-linear tax schedules and a ‘cost-of evasion’ function that is increasing in the extent of evasion. Results based on numerical simulations of these models show further improvement in the model’s ability to match empirically plausible levels of tax evasion. In addition, the differences between the political economy implications of the ‘evade or not’ version of the model and its Allingham and Sandmo counterpart are now very striking; there is now a large range of values of the inequality parameter for which agents in the ‘evade or not’ model vote for a low degree of progressivity. This is because, in the ‘evade or not’ version of the model, low values of the tax rate encourages a large number of agents to choose the ‘not-evade’ option, so that the redistributive mechanism is more ‘efficient’ relative to the situations in which tax rates are high. Some further implications of the models of this thesis relate to whether variations in the level of inequality, and parameters such as the probability of detection and penalties for tax evasion matter for the political economy results. We find that (i) the political economy outcomes for the tax rate are quite insensitive to changes in inequality, and (ii) the voting outcomes change in non-monotonic ways in response to changes in the probability of detection and penalty rates. Specifically, the model suggests that changes in inequality should not matter, although the political outcome for the tax rate for a given level of inequality is conditional on whether there is a large or small or large extent of evasion in the economy. We conclude that further theoretical research into macroeconomic models of tax evasion is required to identify the structural relationships underpinning the link between inequality and redistribution in the presence of tax evasion. The models of this thesis provide a necessary first step in that direction.

Political selection and the relative age effect

In this paper we present substantial evidence for the existence of a bias in the distribution of births of leading US politicians in favor of those that have been the oldest in their cohort at school. This “relative age effect” has been proven to influence performance at school and in sports,but evidence on its impact on people’s vocational success has been rare. We find a marked break in the density of birthdate of politicians using a maximum likelihood test and McCrary’s (2008) nonparametric test. We conjecture that being relatively old in a peer group may create long term advantages which can create a significant role in the ability to succeed in a highly competitive environment like the race for top political offices in the USA. The magnitude of the effect we estimate is larger than what most other studies on the relative age effect for a broader (adult) population find, but is in general in line with studies that look at populations in high-competition environments.

Ideal victims in human trafficking awareness campaigns

Amidst a proliferation of bestseller books, blockbuster films, television documentaries and sensational news reports, public awareness campaigns have claimed their place in a growing chorus of concern about the crime of human trafficking. These campaigns aim to capture the public’s support in efforts to eliminate a ‘modern slave trade’ in which individuals seeking a better life are transported across borders and forced into exploitative labour conditions. Constrained by the limitations of primary campaign materials (posters, print ads, billboards) typically allowing for only a single image and minimal text, it is unlikely that these awareness campaigns can accurately convey the complexity of the trafficking problem. This chapter explores how the depictions of trafficking victims in awareness campaigns can exclude those who do not fit a restrictive narrative mould. Nils Christie’s pivotal work on the construction of society’s ideal victim is the lens through which this paper examines the literal ‘poster child’ of the anti-trafficking movement.

The social mechanism of political deliberation and citizen participation in Guangdong China

Many studies have focused on why deliberative institutions should be established in order to develop Chinese people’s citizenry skills; however few focus on the social conditions and public sentiments that shape the development of deliberative mechanisms. Skills and awareness of citizenry is not only brought into being by deliberative institutions that are set up by the government, but evolve through interplays between technologies and social changes. As a test-bed for economic reform Guangdong is increasingly identified by translocality and hybrid culture. This is framed by identity conflict and unrests, much of which is due to soaring wealth polarisation, high volumes of population movement, cultural collisions and ongoing linguistic contestations. These unrests show the region’s transformation goes beyond the economic front. Profound changes are occurring at what anthropologists and philosophers call the changing social conciseness or moral landscape (Ci, 1994; Yan, 2010). The changing social moralities are a reflection of the awareness of individuals’ rights and responsibilities, and their interdependencies from dominant ideologies. This paper discusses Guangdong’s social and cultural characteristics, and questions how existing social conditions allow the staging of political deliberation by facilitating political engagement and the formation of public opinion. The paper will investigate the tragedy of Xiao Yueyue in Foshan, Guangdong, where ‘right’ and ‘responsibility’, ‘self’ and ‘other’ define the public sentiments of deliberation and participation.

Child rearing Inc : On the perils of political paralysis Down Under

In his 2007 PESA keynote address, Paul Smeyers discussed the increasing regulation of child-rearing through government intervention and the generation of “experts,” citing particular examples from Europe where cases of childhood obesity and parental neglect have stirred public opinion and political debate. In his paper (this issue), Smeyers touches on a number of tensions before concluding that child rearing qualifies as a practice in which liberal governments should be reluctant to intervene. In response, I draw on recent experiences in Australia and argue that certain tragic events of late are the result of an ethical, moral and social vacuum in which these tensions coalesce. While I agree with Smeyers that governments should be reluctant to “intervene” in the private domain of the family, I argue that there is a difference between intervention and support. In concluding, I maintain that if certain Western liberal democracies did a more comprehensive job of supporting children and their families through active social investment in primary school education, then both families and schools would be better equipped to deal with the challenges they now face.

Militarism and International Relations : Political economy, security, theory, edited by Anna Stavrianakis and Jan Selby, Abingdon, Routledge, 2012, 212 pp., £80.00 (hardback), ISBN 978-0-415-61491-7

An engaging narrative is maintained throughout this edited collection of articles that address the issue of militarism in international relations. The book seamlessly integrates historical and contemporary perspectives on militarism with theory and relevant international case studies, resulting in a very informative read. The work is comprised of three parts. Part 1 deals with the theorisation of militarism and includes chapters by Anna Stavrianakis and Jan Selby, Martin Shaw, Simon Dalby, and Nicola Short. It covers a range of topics relating to historical and contemporary theories of militarism, geopolitical threat construction, political economy, and the US military’s ‘cultural turn’.

The political economy of food in schools : the case of Queensland State education

Food in schools is typically understood from a biomedical perspective. At practical, ideational and material levels, whether addressed pedagogically or bureaucratically, food in schools is generally considered from a natural sciences perspective. This perspective manifests as the bioenergetic principle of energy in versus energy out and appears in policy focused on issues such as obesity and physical activity. Despite the considerable literature on the sociology of food and eating, little is understood about food in schools from a sociological perspective. This oversight of one of the most fundamental requirements of the human condition--namely, food--should be of concern for educators. Investigating food through a political economy lens means understanding food in schools as part of broader economic, political, social and cultural conditions. Hence, a political economy of food and schooling is concerned with the formation of ideas about food relative to political, economic, and cultural ideologies in social practice. From a critical sociology study of food messages students receive in the primary school curriculum, this paper reports on some of the official food messages of an Australian state's education policy, as a case to highlight the current political economy of food in Australia. It examines the role of the corporate food industry in the formation of Australian food policy and how that policy created artefacts infused with competing messages. The paper highlights how food and nutrition policy moved from solely a health concern to incorporate an economic dimension and links that shift with the quality of food available in Queensland schools.

The role of, and key considerations for, advertising campaigns and educational awareness workshops within the work-related road safety context

Australian and international evidence suggests that, in the work-related driving context, road crashes account for a substantial number of occupational incidents. In the attempt to reduce injury and improve safety, organisations may implement an array of strategies and interventions ranging from policy development and implementation, vehicle selection and incident monitoring through to education and awareness-raising. This conceptual paper discusses aspects relating to the latter collection of interventions and, in particular, the role, and some key considerations with respect to the content and dissemination, of advertising campaigns and educational awareness workshops. In relation to advertising campaigns, this paper discusses how some of the overarching principles associated with advertising in the broader general community road safety strategy also apply within the work-related road safety context. Specifically, advertising campaigns/materials should be viewed as a key component within a dedicated organisational approach to road (driver) safety. This dedicated approach would need to comprise of a number, and varied array, of strategies. In addition, the content of, and medium/s (e.g., posters) by which to deliver such advertising campaigns, cannot be addressed by a one-size-fits all approach but, rather, requires careful consideration of the needs as well as characteristics of specific organisations and their driver fleet. The paper provides a summary of some key considerations when devising an advertising campaign, including the nature of campaign/message content as well as the processes by which to devise and refine such content. In relation to driver education awareness workshops, this paper outlines the key considerations for delivering a series of workshops specifically aimed at occupational driving within the organisational context. A case study approach will be utilised to demonstrate the manner in which educational awareness workshops can compliment successful advertising campaigns promoting safer work related driving through better risk management practice. Research underpinning the development of driver behaviour modification tools incorporated within the workshops will also be discussed along with the mechanisms utilised to encourage improvements in driver monitoring and behaviour. In an effort to assist organisations with their continual search for cost-effective approaches which may, ultimately, contribute to improvements in driver behaviour and safety, the current paper offers some clear and practical suggestions in relation to the development and dissemination of two types of interventions, advertising campaigns and education awareness workshops.

Critical discourse analysis and political economy of communication : understanding the new corporate order

This article uses critical discourse analysis to analyse material shifts in the political economy of communications. It examines texts of major corporations to describe four key changes in political economy: (1) the separation of ownership from control; (2) the separation of business from industry; (3) the separation of accountability from responsibility; and (4) the subjugation of ‘going concerns’ by overriding concerns. The authors argue that this amounts to a political economic shift from traditional concepts of ‘capitalism’ to a new ‘corporatism’ in which the relationships between public and private, state and individual interests have become redefined and obscured through new discourse strategies. They conclude that the present financial and regulatory ‘crisis’ cannot be adequately resolved without a new analytic framework for examining the relationships between corporation, discourse and political economy.

Australian copyright regimes and political economy of music

In this chapter I review the history of copyright in Australia through a singular and exemplary ruling of the Australian High Court made in 2012 and then relate that to the declining fortunes of Australian recorded music professionals. The case in point is Phonographic Performance Company [PPCA] of Australia Limited v Commonwealth of Australia [2012] HCA 8 (hereafter, HCA 8 2012). The case encapsulates the history of copyright law in Australia, with the judicial decision drawing substantive parts of its rationale from the Statute of Anne (8 Anne, c. 19, 1710), as well as copyright acts that regulated the Australian markets prior to 1968. More importantly the High Court decision serves to delineate some important political economic aspects of the recorded music professional in Australia and demonstrates Attali’s (1985) assertion that copyright is the mechanism through which composers are, by statute, literally excluded from capitalistic engagement as ‘productive labour’.

A socially just rationale for an Australian curriculum? : a critical thematic policy analysis of political speeches in education (2007-2010)

In late 2007, newly elected Prime Minister Kevin Rudd placed education reform on centre stage as a key policy in the Labor Party's agenda for social reform in Australia. A major policy strategy within this 'Education Revolution' was the development of a national curriculum, the Australian Curriculum Within this political context, this study is an investigation into how social justice and equity have been used in political speeches to justify the need for, and the nature of, Australia's first official national curriculum. The aim is to provide understandings into what is said or not said; who is included or excluded, represented or misrepresented; for what purpose; and for whose benefit. The study investigates political speeches made by Education Ministers between 2008 and 201 0; that is, from the inception of the Australian Curriculum to the release of the Phase 1 F - 10 draft curriculum documents in English, mathematics, science and history. Curriculum development is defined here as an ongoing process of complex conversations. To contextualise the process of curriculum development within Australia, the thesis commences with an initial review of curriculum development in this nation over the past three decades. It then frames this review within contemporary curriculum theory; in particular it calls upon the work of William Pinar and the key notions of currere and reconceptualised curriculum. This contextualisation work is then used as a foundation to examine how social justice and equity have been represented in political speeches delivered by the respective Education Ministers Julia Gillard and Peter Garrett at key junctures of Australian Curriculum document releases. A critical thematic policy analysis is the approach used to examine selected official speech transcripts released by the ministerial media centre through the DEEWR website. This approach provides a way to enable insights and understandings of representations of social justice and equity issues in the policy agenda. Broader social implications are also discussed. The project develops an analytic framework that enables an investigation into the framing of social justice and equity issues such as inclusion, equality, quality education, sharing of resources and access to learning opportunities in political speeches aligned with the development of the Australian Curriculum Through this analysis, the study adopts a focus on constructions of educationally disadvantaged students and how the solutions of 'fixing' teachers and providing the 'right' curriculum are presented as resolutions to the perceived problem. In this way, it aims to work towards offering insights into political justifications for a national curriculum in Australia from a social justice perspective.

Constructions of asylum seekers and refugees in Australian political discourse

Immigration to Australia has long been the focus of negative political interest. In recent times, the proposal of exclusionary policies such as the Malaysia Deal in 2011 has fuelled further debate. In these debates, Federal politicians often describe asylum seekers and refugees as ‘illegal’, ‘queue jumpers’, and ‘boat people’. This paper investigates how the political discourse constructs asylum seekers and refugees during debates surrounding the Malaysia Deal in the Federal Parliament of Australia in 2011. Hansard Parliamentary debates were analysed to identify the underlying themes and constructions that permeate political discourse about asylum seekers and refugees. This paper argues that a dichotomous characterisation of legitimacy pervades their construction with this group constructed either as legitimate humanitarian refugees or as illegitimate ‘boat arrivals’. These constructions result in the misrepresentation of asylum seekers as illegitimate, undermining their right to protection under Australia’s laws and international obligations. This construction also represents a shift in federal political discourse from constructing asylum seekers as a border or security threat, towards an increasing preoccupation with this categorisation of people as legitimate, or illegitimate.

Humorous health messages : "a fresh approach" for road safety advertising campaigns?

Theoretical Background and research questions/hypothesis: Recently, throughout Australasia, humorous appeals have become implemented increasingly in health advertising despite limited evidence regarding the persuasiveness of different types of humour. Of those studies available which have examined the persuasiveness of humorous messages, the type of humour is often not defined so it is unclear what type of humour is being examined. Speck’s (1991) typology includes five types of humour; comic wit, sentimental humour, satire, sentimental comedy, and full comedy. Each type of humour is based on one or more humour generation processes; namely, incongruity-resolution, disparagement humour, and arousal-safety. It has been acknowledged that more research is needed to determine the relative persuasiveness of these different types of humour and to identify those types which may be most effective for health advertising. The current research explored individuals’ thoughts about, and their responses to some different types of, humorous messages addressing the serious health topic of road safety. Methods: A preliminary qualitative, study was conducted involving discussions with licensed drivers (N = 18) regarding their thoughts and feelings about humorous road safety messages in general as well as in response to some (5 in total) pre-existing advertisements. Men (n = 10) and women of younger and older age groups (17-24 or 25+ years) participated in one of six discussions. Participants were recruited from an existing community-based database held by the authors’ Research Centre or were approached directly on the university campus. Ethical approval was gained for the study. Each participant was offered $AUD40. A semi-structured interview schedule guided the discussion (e.g., was it humorous?, would this ad influence you?). Audio-recordings of the discussions were professionally transcribed and the transcripts were analysed using thematic analysis. Results: The findings revealed that, irrespective of age and gender, humour that was clever, incorporated something unexpected and contrasting with the everyday, was a preferred and relevant approach, thus aligning with incongruity-based theories of humour generation and humour types, such as comic wit and satire. As a persuasive function, humorous messages were considered likely to be talked about (and relatively more so than traditional fear-based approaches). Participants also felt that humorous messages would need to be used cautiously as humour that was considered inappropriate and/or associated with serious occurrences, such as a crash, would be unlikely to persuade. Conclusions: The findings highlight some of the potential benefits of using humour, such as increasing the extent to which an advertisement is talked about as well as the types of humour which may be effective in this context. Implications for research and/or practice: While this research has provided important insight, future research which quantitatively assesses the persuasive effects of different types of humorous road safety messages within a larger, representative sample is needed. This current study has highlighted some humorous approaches which may hold persuasive promise in encouraging individuals to adopt safer attitudes and behaviours not only on the road, but in relation to serious health issues more broadly.