Paper Short Abstract:

What costs can and cannot be deducted from taxes owed varies between countries. The deductible logics of a tax system produces particular financial incentives which shape financial landscapes, as well as particular ideas about private, professional, productivity, and wealth.

Paper Abstract:

In most countries around the world, yearly tax return activities, by individuals and companies, involve calculating deductions of costs to lower the taxes owed and, in theory, ensure taxes are paid on profits only. But what can be deducted, according to law and accounting expertise, varies hugely between tax systems. In addition, what costs can be legitimately proved e.g. with receipts, also impact what people end up deducting. In the US, interest payments on mortgages of homes are deductible for the purposes on income tax, essentially subsiding property ownership. In the UK and Sweden, deductions cannot be made to any costs related to your private life. In Bolivia, many small businesses do not have receipts for their costs due to the large informal market, meaning they struggle to bring down their tax burden in line with their actual profit. I argue that what can be deducted in different tax systems, both legally and practically, impacts not only taxes owed but also produces specific financial incentives which shape the economic landscape, as well as producing categories and links between these categories e.g. private and professional, productivity, and wealth. Deductability is also a way of shifting tax burdens between actors. Taking a comparative perspective, this talk brings together ethnographic data and deductible logics from Bolivia, Sweden and the UK, as well as secondary data from around the globe.