Party Politics, Governors, and Economic Policy

In this article, we evaluate the role of elections in governors' state tax policy making. Does it matter for state taxes whether the governor is a Democrat or Republican and whether she is eligible for re-election or faces a binding term limit? Using a Regression Discontinuity Design and a pane...

Full description

Saved in:
Bibliographic Details
Published inSouthern economic journal Vol. 80; no. 1; pp. 106 - 126
Main Authors Fredriksson, Per G., Wang, Le, Warren, Patrick L.
Format Journal Article
LanguageEnglish
Published College of Business Administration, University of Tennessee at Chattanooga, Chattanooga, TN 37403 Southern Economic Association 01.07.2013
Subjects
Corporate taxes
D72
D78
Economic models
Economic policy
Economic theory
Economics
Election results
Estimated taxes
Fiscal policy
Governors
H20
H71
Income taxes
Incumbents
Per capita
Political activism
Political economy
Political parties
Primaries & caucuses
Sales taxes
State elections
State taxes
Studies
Tax policy
Tax revenues
Taxation economics
Term limitations
Total taxes
Voter behavior
Voters
Voting
United States > US
Online AccessGet full text

Cover

More Information
Summary:In this article, we evaluate the role of elections in governors' state tax policy making. Does it matter for state taxes whether the governor is a Democrat or Republican and whether she is eligible for re-election or faces a binding term limit? Using a Regression Discontinuity Design and a panel of U.S. states, we find that the manner in which governors of different parties implement different tax policies turns crucially on the incumbent's eligibility for re-election. Reelectable Democratic governors increase income taxes relative to similarly situated Republicans, yielding divergence between party policy positions. However, governors facing a binding term limit exhibit the reverse policy difference, resulting in a movement of policy back together.
ISSN:0038-4038
2325-8012
DOI:10.4284/0038-4038-2011.320