Sales taxation in a global economy

This paper examines the hard-to-tax (HIT) problem as it relates to the operation of the retail sales tax in general and particularly in the context of an increasingly global economy, with freer trade and factor mobility and heightened horizontal tax and market competition. HTT is often couched in terms of the ability to tax areas of the economy where tax evasion is easiest and tax administration is weakest. We broaden this notion to consider the problem in terms of tax avoidance and in terms of the political difficulties of taxing certain aspects of the economy.