Persistent income inequality and regressive tax regimes pose an ongoing challenge in Latin America and the Caribbean, despite important reforms undertaken in the region since the 1980s. Brazilian researcher Saulo Santos de Souza of the Federal University of Pernambuco explores the multiple ways that politics shape and constrain tax reform in the region. Examining the issue through the lens of political economy, Sousa examines the influence of political variables such as parties, electoral support, fragmentation, and powerful elites in explaining why tax reform has been so difficult and why value-added taxes (VAT) still constitute the backbone of many tax structures in the region.

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