Taxes I am currently reading papers and essays on taxation. There is an interesting study that I want to share in this thread. The article starts basically saying that: "This paper reports the first empirical evidence that fiscal reform efforts in transition countries have positive effects"
The study analyses different East European countries. The economists and law experts agree on the big problem of corruption inside public entities: Hellman et al analyzed the BEEPS I data on both the frequency of firms admitting to paying bribes and, conditional on that admission, the percentage of revenues paid in bribes. They report summary statistics for each country in the survey. The percentage of firms admitting to ever paying bribes spans the range from approximately 45% in Slovenia and Belarus
One of the most interesting analysis is the situation and social context of Moldova. The paper warns: Furthermore, the complexity of fiscal reform has involved a limited ability to quickly implement a broad-based low-rate tax structure that is effectively administered. The challenge has been that of instituting a new tax system that fosters compliance among new and restructured enterprises, before they are driven
underground. In one study of tax evasion Anderson and Carasciuc examined evidence from the Republic of Moldova and found quite predictable effects, with greater measured tax evasion in sectors of the economy where audit frequencies were lower and/or where the real value of fines and penalties were lower.
How this situation can end up?
There is an empirical evidence that fiscal reforms are effective in reducing the amount of tax bribes paid by firms. Nonetheless, those firms do not hesitate to keep corrupt behaviours, because the study proofs: Of course, the fact that firms pay less in tax bribes in countries where fiscal reforms have been more extensive does not mean that the firms pay less in overall bribes. Further research is needed to consider whether the reduction in tax bribes is accompanied by a change in other types of bribes and unofficial payments. It could be that a reduction in tax bribes is accompanied by an increase in other types of bribes.
So, we can conclude that fiscal reforms are not the solution if the enterprises and communities are already corrupt. Even, there is evidence that in some countries with soft taxation have better and transparent public administration such as Switzerland, Luxembourg, Liechtenstein, etc...
Maybe the solution is on ethics and not only in taxation of the richest.