This paper by Tasha Fairfield asks how policymakers can get around obstacles that prevent taxing economic elites. It identifies six strategies to aid this through the use of gaining popular support and neutralising the anatagonism of the elite. The effects of these strategies on tax reform are illustrated by case studies from Chile, Argentina and Bolivia.
"How can policy entrepreneurs circumvent obstacles to taxing economic elites? And how much scope for reform can they create? These questions are of growing interest to the international development community and policy practitioners,1 but they have received little systematic analysis in the emerging literature on tax reform in developing countries. Tax-policy literature has not adequately analyzed the critical political dimensions of tax reform.
... Drawing on diverse literatures and extensive original field research, I identify and analyze six strategies for taxing economic elites and argue that they can have an important causal effect on the fate of reform initiatives. The strategies act through one or both of two mechanisms. First, they may mobilize public support, which puts electoral pressure on politicians who might otherwise defend the interests of economic elites. Second, they may temper antagonism on the part of those economic elites who will bear the tax burden, making them more likely to accept reform. When economic elites are powerful, these strategies are unlikely to make substantial tax increases possible. Nevertheless, they can make the difference between no additional resources and much needed if modest supplemental revenue, and the incremental reforms they facilitate may accumulate into significant change over time."
Fairfield, Tasha (2013): Going Where the Money Is: Strategies for Taxing Economic Elites in Unequal Democracies. World Development 47: 42-57