Should Tax Be King? The Debate over Tax Priority in Insolvency

Countries differ in their approaches to the treatment of tax claims in insolvency. Historically, most countries have granted priority to tax claims. In the late 20th century, however, some countries abolished or reduced tax priorities at the same time that sweeping insolvency reforms were introduced. Since then, the debate over whether tax claims should be afforded priority in insolvency has continued. This paper reviews the various legal techniques used to protect tax claims in a wide range of countries, the arguments in favor and against tax priorities, and advocates for an empirical approach to analyzing this complex problem.