Is tax law universal, or does it vary according to the legal and general culture of the country in question?  What happens when tax norms developed in one context are moved or “transplanted” into another?  Two scholars, one writing about a small country and one about a very big one, have endeavored to provide an answer.

The small country project is by Assaf Likhovski and concerns the income tax in pre-State Israel (or if one prefers, Israel and Palestine), specifically, the era of the British Mandate (1923-48).  During this period the British—who still controlled a substantial portion of the world’s land and population—imported an essentially uniform, “one size fits all” income tax code to Palestine and other colonial territories.  But of course, it didn’t work out that way: the peculiarities of the Middle East, which ranged from unique or at least different business forms to what might be called a diffident attitude toward paying taxes, rendered the system quite different in practice than it would have been in Britain, India, or another location.  Particularly interesting was the imposition (or more properly, the attempt to impose) a uniform system on the country’s Jewish and Arab populations: the Jews feared that their Western-style economic arrangements would provide a juicier revenue target than the Arabs’ more traditional (and often noncash) transactions, so that the tax issue became yet another source of distrust between the two communities.  There is an irony here, in that the Jewish community’s superior tax-raising capacity was ultimately to prove an advantage in the 1948 and later wars with neighboring Arabs; but that is another story. Continue reading "Tax Law and Culture: Big Countries and One Small One"

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