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20 U. Pa. J. Bus. L. 93 (2017-2018)
Taxation without Information: The Institutional Foundations of Modern Tax Collection

handle is hein.journals/upjlel20 and id is 97 raw text is: 


Wei Cui*


     A prominent strand of recent economic and legal scholarship
hypothesizes that third-party information reporting (TPIR) is essential to
modem tax collection. The slogan, no taxation without information, has
captured researchers' imaginations and is even often presented as self-
evident truth. This Article offers a fundamentally different perspective,
arguing that the emphasis on TPIR is misplaced. TPIR is used largely in the
collection of the personal income tax but not of many other types of modem
taxes. Even for the personal income tax, TPIR also has close substitutes
which do not involve information transmission to the government.
Theoretically, appeals to TPIR   are vitiated by the puzzle of payor
compliance. And most purported empirical evidence for the effectiveness of
TPIR fails to provide causal identification.
     I suggest that to better understand the institutional foundations of
modem tax collection, we should stop thinking of business firms as fiscal
intermediaries in a game of deterrence against tax evaders. Instead, it would
be more fruitful to conceive of firms as sites of social cooperation under the
rule of law. The co-evolution of the business firm and modem regulatory
law may have enabled modem governments to practice precisely taxation
without information.

* Author email: cui@allard.ubc.ca. I am grateful for comments on earlier drafts of the paper
from Arthur Cockfield, Pierre-Pascal Gendron, Mitchell Kane, Michael Knoll, Leandra
Lederman, Alan Macnaughton, George Yin, and audiences at the University of Toronto Law
School James Hausman Tax Law & Policy Workshop, University of Virginia Law School
Fall Invitational Tax Symposium (2016), 109th National Tax Association Annual Meeting,
and the Waterloo/Deloitte Tax Policy Research Symposium (2017). I am also grateful for
discussion with Reuven Avi-Yonah, Jim Hines, Kyle Logue, Emily Satterthwaite, and Joel
Slemrod. All errors remain my own. Copyright 2017 by Wei Cui. All rights reserved.

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