Discussion of “Tax burdens and political corruption: Evidence from the SALT deduction cap”

Gramlich, Nam, Potter, and Venkat (hereafter, GNPV or “the authors”) examine whether federal income tax burdens are associated with convictions of public officials for corruption. On the one hand, tax burdens decrease after-tax wealth and potentially increase officials' rationalization toward corruption to compensate for the shortfall in take-home pay. On the other hand, higher tax burdens could incentivize citizen engagement and monitoring, thus creating an external disciplining mechanism against corruption. Consistent with the second possibility, the authors find that the tax burden is negatively associated with corruption and positively associated with voter turnout. In my discussion of GNPV, I focus on generalizability and takeaway, identification and research design, and future research. Future research also includes a discussion of identification and cross-sectional tests to encourage others to expand on this important research question raised by GNPV. These items are also expected to benefit growing research that utilizes geographical units (MSAs or counties) to examine individual and corporate tax-related outcomes.