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Does the Parliament Ideology Affect Corporate Taxation? Evidence of EU countries

Author

Listed:
  • Vitek Leos

    (Prague University of Economics and Business, Prague, Czech Republic.)

  • Vujcic Stevan

    (Prague University of Economics and Business, Prague, Czech Republic.)

Abstract

The article aims to analyse whether corporate income taxation is influenced by the prevailing ideology of parliaments (left-wing vs right-wing). The primary research method used is econometric analysis: three different estimation techniques were used on three dependent variables connected with corporate taxation. Nine models were developed to discover whether a political explanatory variable, “Centre of Political Gravity”, drives corporate taxation decisions. Additionally, variables were employed as controls: Gross Operating Surplus, 10-Year Government Bond Yield, Debt/GDP ratio and the Rule of Law index. The overall dataset is in panel format, consisting of 27 EEA countries covering 2004 to 2019. The results suggest that a parliament’s majoritarian ideology can influence the effective corporate income tax rate. It is found that left-wing parliaments tend to increase this rate.

Suggested Citation

  • Vitek Leos & Vujcic Stevan, 2025. "Does the Parliament Ideology Affect Corporate Taxation? Evidence of EU countries," NISPAcee Journal of Public Administration and Policy, Sciendo, vol. 18(1), pages 192-213.
    • Handle: RePEc:vrs:njopap:v:18:y:2025:i:1:p:192-213:n:1009
    DOI: 10.2478/nispa-2025-0009
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