Between 1962 and 1966 Chile carried through a comprehensive reorganization of the internal revenue service and tax collecting procedures. During much of this period the author, a distinguished U.S. authority on tax administration, was an advisor to the Chilean government in this effort. His book is a recounting in considerable detail of the changes made, their rationale, and the strategies pursued to smooth the changeover. Formally, at least, what emerged for Chile was an internal revenue service modelled along U.S. lines, with a substantial admixture of computerization, aerial mapping, and other artifacts of modem tax technology.
How well has this cultural transplant taken? Mr. Nowak thinks very well in the short run and is also optimistic about the long run institutionalization of the reforms, although he spends little space documenting either judgment. His main objective has been rather to write a “how to” book for the benefit of tax administrators and policy makers of other less developed countries plagued with rampant tax evasion and delinquency, inequitable property assessment and other ills that the Chilean reforms were designed to cure. Hence the book can be skimmed by scholarly generalists and the laity, since it tells us much more than we want to know about the specifics of the reorganization.
How well the reorganization has taken is, however, a fascinating question of more general interest. The reform of the Chilean tax collecting machinery had long been urged by many as a vital step toward stanching inflation, improving the efficiency of economic planning, and reducing income inequality. But, tax evasion, the periodic condonation of tax delinquency, and low property tax assessments also have been important counters in the Chilean political game, protecting the property and income of the Chilean wealthy while allowing Chilean politicians to draw some of the heat from the “social question” by legislating nominally progressive tax increases. Can these counters in fact be removed for long by tax reorganization, or will the efficacy of the reorganization gradually be eroded in order to restore the counters? Alternatively, should the efficacy of the reorganization hold up, will taxation become an effective instrument for egalitarianism, or will the “social question” take on new and possibly more lethal forms? Mr. Nowak left Chile after 1966, too soon to detect the outlines of answers to such questions. However now, when they may more easily be detectable, researchers on these questions would find Mr. Nowak’s study a valuable guide.
