TAX REFORM IN DEMOCRATIC SPAIN: A CASE ANALYSIS
A new, democratically-elected government in Spain initiated the implementation of income tax reform in the wake of the demise of the authoritarian government of General Francisco Franco in 1977. The process of income tax reform, its implementation, and adjustments by both the government and the public to the reformation of the country's income tax system stretched over a period of years from 1977 through 1988 (Barzelay & Moukhebir, 1993a, pp. 1, 3-4; Barzelay & Moukhebir, 1993b, pp. 4-5).
The income tax reform program achieved successes and suffered failures over the period. The shift from a system of indirect taxation to a system of direct taxation created both winners and losers among both taxpayers and governmental administrators. By the end of the 1980s, the Spanish public did not provide solid support for the voluntary tax on incomes, and the government was frequently unsuccessful in the legal pursuit of tax evaders. The continued viability of the reformed income tax system depended in great part on new policies that would generate widespread public support for the voluntary income tax system in Spain (Barzelay & Moukhebir, 1993a, pp. 3-5; Barzelay & Moukhebir, 1993b, pp. 3-6).
Relevant Issues (Big Issues Surrounding the Question)
A number of relevant issues were associated with the policy problem related to the development of greater public support for the voluntary, direct income tax system in Spain. One of the more important of these issues was the perception of the fairness of the country's income tax system. The Spanish public will not provide widespread support for the voluntary, direct income tax system unless the public perception is that the system is fair.
A second important issue is system capacity. The governmental taxation apparatus in Spain must develop and maintain the capacity to effectively and efficiently administer the voluntary, direct income...