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Electoral Cycles and the Politics of State Tax Policy

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  • Michael A. Nelson

    (University of Akron)

Abstract

This article contributes to the empirical literature on the political economy of tax policy through the use of a panel data set on statutory rate changes and new tax adoptions by state governments during the postwar period. A principal finding is that there is little evidence in support of recent models of political policy cycles that emphasize the use of short-run fiscal policy instruments (such as a tax cut) as an election draws near to enhance reelection prospects. The timing of tax increases is clearly linked with election cycles, however, with the largest share of rate increases and new adoptions occurring during the first year of a governor's term in office. Also examined is the political consequence of state tax policy actions. Evidence is presented showing that voters tend to blame governors more than the legislature for rate increases on broad-based taxes, especially for increases enacted in an election year.

Suggested Citation

  • Michael A. Nelson, 2000. "Electoral Cycles and the Politics of State Tax Policy," Public Finance Review, , vol. 28(6), pages 540-560, November.
  • Handle: RePEc:sae:pubfin:v:28:y:2000:i:6:p:540-560
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    Cited by:

    1. Krumm, Raimund & Volkert, Jürgen, 2015. "Möglichkeiten und Grenzen der politischen Realisierbarkeit intra- und intergenerativer Gerechtigkeit," UFZ Discussion Papers 11/2015, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    2. Antoine Cazals & Alexandre Sauquet, 2015. "How do elections affect international cooperation? Evidence from environmental treaty participation," Public Choice, Springer, vol. 162(3), pages 263-285, March.
    3. Alexandre SAUQUET & Antoine CAZALS, 2013. "When does cooperation win and why? Political cycles and participation in international environmental agreements," Working Papers 201320, CERDI.
    4. Foremny, Dirk & Riedel, Nadine, 2014. "Business taxes and the electoral cycle," Journal of Public Economics, Elsevier, vol. 115(C), pages 48-61.
    5. Richard Cebula, 2002. "Net interstate population growth rates and the Tiebout-Tullock hypothesis: New empirical evidence, 1990–2000," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 30(4), pages 414-421, December.
    6. Reed, W. Robert, 2006. "Democrats, republicans, and taxes: Evidence that political parties matter," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 725-750, May.
    7. W. Robert Reed & Cynthia L. Rogers, 2005. "Tax Cuts and Employment Growth in New Jersey: Lessons From a Regional Analysis," Urban/Regional 0506010, EconWPA.
    8. W. Robert Reed & Cynthia L. Rogers, 2006. "Tax Burden and the Mismeasurement of State Tax Policy," Public Finance Review, , vol. 34(4), pages 404-426, July.

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