Political Parties and the Tax Level in the American States: A Regression Discontinuity Design
AbstractWith a regression discontinuity design I show that the partisan identity of the majority in the state House of Representatives has no causal effect on the tax level. This result goes against recent findings in the political economy literature. In the state Senate I find a significant discontinuity in the tax level, but I also find a discontinuity in the density of the forcing variable - which implies that we can not interpret the discontinuity in the Senate as a causal relation. Another contribution of the paper is to investigate under which conditions slim majorities in the American states (as opposed to close election) are appropriate for a regression discontinuity design.
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Bibliographic InfoPaper provided by Department of Economics, University of Bristol, UK in its series Bristol Economics Discussion Papers with number 11/622.
Length: 34 pages
Date of creation: Jul 2011
Date of revision:
Regression discontinuity design; Democrats; Republicans; divided government; line item veto; tax level.;
Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H1 - Public Economics - - Structure and Scope of Government
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
This paper has been announced in the following NEP Reports:
- NEP-ACC-2011-08-09 (Accounting & Auditing)
- NEP-ALL-2011-08-09 (All new papers)
- NEP-CDM-2011-08-09 (Collective Decision-Making)
- NEP-POL-2011-08-09 (Positive Political Economics)
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