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The Political Costs of Taxes and Government Spending

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Author Info
Stuart Landon
David L. Ryan

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Abstract

The marginal political costs of different types of taxes and government spending, as well as voter preferences over different fiscal variables, are examined using two different specifications for political cost--one based on the probability of incumbent defeat and the other based on the incumbent's percentage of the vote. Models associated with these two specifications, in which voting behavior depends on disaggregated taxes and government expenditures, are estimated using data from Canadian provincial elections. The empirical results, which indicate that different types of taxes and expenditures have quite different marginal political costs, have important implications for models that incorporate voter preferences.

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Publisher Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 30 (1997)
Issue (Month): 1 (February)
Pages: 85-111
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Handle: RePEc:cje:issued:v:30:y:1997:i:1:p:85-111

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  1. Jonathan R. Kesselman, 1998. "Economics versus Politics in Canadian Payroll Tax Policies," Canadian Public Policy, University of Toronto Press, vol. 24(3), pages 381-387, September. [Downloadable!] (restricted)
  2. Jan Vermeir & Bruno Heyndels, 2006. "Tax policy and yardstick voting in Flemish municipal elections," Applied Economics, Taylor and Francis Journals, vol. 38(19), pages 2285-2298, October. [Downloadable!] (restricted)
  3. Esteller-Moré, Álex & Solé-Ollé, Albert, 1999. "Vertical income tax externalities and fiscal interdependence : evidence from the US," ZEW Discussion Papers 99-28, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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  4. Schady, Norbert R., 1999. "Seeking votes - the political economy of expenditures by the Peruvian Social Fund (FONCODES), 1991-95," Policy Research Working Paper Series 2166, The World Bank. [Downloadable!]
  5. Núria Bosch & Albert Solé-Ollé, 2007. "Yardstick competition and the political costs of raising taxes: An empirical analysis of Spanish municipalities," International Tax and Public Finance, Springer, vol. 14(1), pages 71-92, February. [Downloadable!] (restricted)
    Other versions:
  6. Benny Geys & Jan Vermeir, 2008. "Taxation and presidential approval: separate effects from tax burden and tax structure turbulence?," Public Choice, Springer, vol. 135(3), pages 301-317, June. [Downloadable!] (restricted)
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