Taxing reforms: the complex dynamic of tax policy change in Australia, Japan, Canada and the United States

Tax policy is highly contested and proposals for policy change invariably meet fierce political resistance. Given these constraints conventional explanations of tax reform have followed a punctuated equilibrium model in which periodic economic and political crises result in rapid policy change among protracted periods of relative stability. This paper challenges the stability versus change dualism implicit in such and accounts and, using recent consumption tax reforms in Australia, Canada, Japan and the Unites States as a reference, argues that the dynamics of tax policy change are more complex. The paper argues that while exogenous shocks central to historical institutionalist theories of policy change influence the timing of reform proposals, they provide few insights into direction and magnitude of policy change. To this end it necessary to focus on the micro level and nature of societal resistance to policy change and the role of policy entrepreneurs in this process.