Partisan politics in corporate taxation

Osterloh, Steffen; Debus, Marc

doi:10.1016/j.ejpoleco.2011.11.002

Cited by 60 publications

(40 citation statements)

References 54 publications

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“…If workers and lower income voters more generally mostly support the left while capital owners and higher income voters more generally mostly support the right, one would expect the left to raise income and corporate income taxes while the right would raise the valued-added tax. Evidence from OECD and European countries tends to find higher taxes on capital under leftist governments (Osterloh and Debus, 2012;Angelopoulos, Economides and Kammas, 2012). So far for Latin America, however, the evidence is mixed.…”

Section: Ideologymentioning

confidence: 94%

Explaining Changes in Tax Burdens in Latin America: Does Politics Trump Economics?

Hallerberg¹,

Scartascini²

2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license. Terms of use: Documents inFollowing a peer review process, and with previous written consent by the Inter-American Development Bank (IDB), a revised version of this work may also be reproduced in any academic journal, including those indexed by the American Economic Association's EconLit, provided that the IDB is credited and that the author(s) receive no income from the publication. Therefore, the restriction to receive income from such publication shall only extend to the publication's author(s). With regard to such restriction, in case of any inconsistency between the Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives license and these statements, the latter shall prevail.Note that link provided above includes additional terms and conditions of the license.The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent.http://www.iadb.org 2015 1 Abstract * This paper examines whether elections, which are generally held on fixed dates, and banking crises explain the timing of tax reforms and the allocation of the additional tax burden. Using an original fine-grained dataset of tax reforms, the paper finds support for the role of these two sources of variation. In particular, the probability of reform is higher during banking crises. During electoral periods, increasing taxes becomes highly unlikely, even if the government is facing financing problems. Interestingly, politics seem to trump economics: banking crises do not affect the probability of having a reform during electoral times. Moreover, the presence of an IMF program affects the tax instruments chosen: countries with a program increase the value-added tax, while those without raise the personal income tax. Finally, the ideology of the president does not explain who bears the additional tax burden. JEL classifications: F41, H2

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Section: Ideologymentioning

confidence: 94%

Explaining Changes in Tax Burdens in Latin America: Does Politics Trump Economics?

Hallerberg¹,

Scartascini²

2015

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“…First, the corporate taxation literature suggests that left‐wing governments are prone to increase corporate tax rates due to redistribution concerns and consumption‐driven growth strategies (Garrett, 1998; Inclan, Quinn, and Shapiro, 2001; Osterloh and Debus, 2012; Quinn and Shapiro, 1991a). Left‐wing governments redistribute wealth and provide a high level of public spending to their core constituents, low‐skilled workers, as a redistributive mechanism (Benoit and Laver, 2006; Osterloh and Debus, 2012; Quinn and Shapiro, 1991a). They are also more likely to implement a consumption‐driven model of economic growth strategies associated with a high capital tax rate and lower rates of interest.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…Conversely, right‐wing governments are less inclined to seek redistribution and tend to undertake investment‐driven economic growth strategies accompanied by high rates of saving and lower rates of capital taxation (Boix, 1998; Garrett, 1998; Inclan, Quinn, and Shapiro, 2001; Quinn and Shapiro, 1991a). Indeed, Osterloh and Debus (2012) find that left‐wing governments in Europe have higher corporate tax rates than right‐wing ones. Quinn and Shapiro (1991) show that in the United States, Democratic administrations collect more in tax revenues than Republican administrations.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…Scholars have theorized that it does, with considerable disagreement about how. The corporate taxation literature suggests that leftist governments tend to have higher corporate tax rates than rightist governments (Inclan, Quinn, and Shapiro, 2001; Osterloh and Debus, 2012; Quinn and Shapiro, 1991a). They point out that left‐wing parties are concerned more about redistribution and therefore carry out consumption‐driven economic strategies that increase corporate tax rates and promote productivity of labor and capital through public investment funded by increased taxes.…”

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confidence: 99%

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Does Government Partisanship Influence Multinational Corporations’ Tax Payments in the United States?

Shin

2020

Social Science Quarterly

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Objective Scholars have made conflicting predictions as to whether partisan politics influences taxes paid by multinational corporations (MNCs). The current study tests this question by examining the relationship between the partisan composition of government and tax rates that MNCs paid to their home country, the United States, using firm‐level data on financial information from the U.S. Fortune 1000 for the period 1986–2010. Methods I employ a multilevel regression model allowing for varying intercepts across firms and years as a way to model unobserved heterogeneity. Results I find no relationship between the partisan orientation of governing parties and the level of corporate taxes MNCs pay. Internationally mobile firms have lower effective tax rates than domestically operating firms. Conclusion This study suggests that the effect of partisan politics on corporate tax policy does not extend to the taxation of MNCs in the United States.

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“…According to Osterloh and Heinemann (2013), it is necessary to set minimum tax rates concerning corporation tax as a tool of relieving pressure of tax competition. According to neoclassical standard tax competition models, political leaders have repeatedly argued that globalization could lead to a destructive competition that would lead to "bottom-line" tax rates and would result in insufficient financial support from public institutions (Osterloh, 2012). Similarly, it would lead to destruction in the case of a significant increase in minimum wage only for the profession of truck drivers above the level of other professions in the country.…”

Section: Is There a Solution For Social And Tax Harmonization In Roadmentioning

confidence: 99%

Harmonization of Market Conditions in Provision of Road Freight Transport

Poliak

Šimurková

Jáskiéwicz

et al. 2018

New Trends in Production Engineering

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International road transport is a specific service within the frame of services provided in the European Union. It is because the conditions of being active on the market are influenced by the states where businessmen operate, but services can be provided throughout the whole year in other member states of the European Union. The aim of the contribution is to highlight the existing problems in international road freight transport sector. These problems persist despite the fact that market access was exempted from the national law of individual member states and regulated directly by EU regulations. Despite the unification of market access, tax and social harmonization is not ensured in international road freight transport. An unequal tax burden on carriers and different requirements of wage regulations create a discriminatory environment among entrepreneurs. The contribution identifies the factors that deform the equal operating conditions in single market. The aim of the contribution is also to provide the readers with the answers to the questions: Is it possible under current EU conditions to harmonize tax and social conditions? What impact would this harmonization have on business environment?

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Partisan politics in corporate taxation

Cited by 60 publications

References 54 publications

Explaining Changes in Tax Burdens in Latin America: Does Politics Trump Economics?

Explaining Changes in Tax Burdens in Latin America: Does Politics Trump Economics?

Does Government Partisanship Influence Multinational Corporations’ Tax Payments in the United States?

Harmonization of Market Conditions in Provision of Road Freight Transport

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