Global tax systems under scrutiny: How neoliberal austerity and corporate capture distort equity and sustainability

Indigenous fiscal traditions often centre reciprocity and ecological stewardship, framing taxation as a sacred duty to sustain community and land rather than a tool for state revenue extraction. Systems like the Māori *kaitiakitanga* or the Quechua *ayni* treat wealth as a communal resource, contrasting with the individualised, state-centric models dominant today. These perspectives highlight how tax systems could be reimagined to prioritise ecological and social reproduction over capital accumulation.

The modern tax state emerged from colonial extraction and racial capitalism, with early income taxes in the West justified by war financing and later expanded to fund welfare states under Keynesianism. The post-1980 neoliberal turn dismantled progressive taxation, slashing top rates while enabling corporate tax arbitrage through offshore havens—a system pioneered by European colonial powers. Historical parallels abound, from the Dutch East India Company’s tax farming to the 19th-century 'tax haven' networks in Switzerland and Luxembourg.

Cross-culturally, taxation is rarely a purely economic transaction; it is often tied to cultural values, spiritual obligations, or communal survival. In Bhutan, the Gross National Happiness index integrates tax policy with holistic well-being, while in many African societies, taxes are levied in kind (e.g., livestock, crops) to ensure food security. The Western model’s focus on monetised compliance overlooks these diverse systems, which could inform more equitable and culturally resonant tax designs.

Empirical research confirms that progressive taxation reduces inequality, boosts public health outcomes, and enhances social mobility, while regressive systems exacerbate poverty and political instability. Studies on tax havens reveal that $10–20 trillion in wealth is hidden offshore, depriving governments of $200–400 billion annually in lost revenue. Behavioural economics shows that tax compliance is higher when citizens perceive fairness and see tangible returns, challenging the neoliberal assumption that lower taxes spur growth.

Artistic and spiritual traditions often critique the moral vacuity of extractive tax systems, from the biblical critique of usury to modern protest music like Fela Kuti’s 'International Thief Thief,' which lambasts corrupt elites. Indigenous cosmologies frame tax evasion as a violation of sacred covenants between humans, ancestors, and land, while Buddhist economics advocates for 'right livelihood' in fiscal policy. These perspectives highlight the ethical dimensions of taxation, framing it as a moral act rather than a transaction.

Future tax systems may need to integrate ecological and digital dimensions, such as carbon taxes tied to planetary boundaries or AI-driven automation taxes to fund universal basic services. Scenario modelling suggests that without radical reform, global tax competition could erode state capacity by 2040, leading to privatised infrastructure and heightened inequality. Alternative models, like the EU’s proposed digital tax or progressive wealth taxes, offer glimpses of a post-neoliberal fiscal future.

Marginalised communities—particularly Black, Indigenous, and working-class populations—bear the brunt of regressive taxation, from sales taxes on essential goods to property taxes that displace long-term residents. Women, who perform 75% of unpaid care work globally, are disproportionately affected by austerity-driven tax cuts to social services. Grassroots movements like the Tax Justice Network and the Global Alliance for Tax Justice centre these voices, demanding reparative taxation that addresses historical injustices.