Tax structure turbulence in OECD countries

Ashworth, J.; Heyndels, B.

Abstract

This paper analyses whether and to what extent politicians manipulate tax structures strategically in order to win elections or for ideological purposes. We introduce an indicator for tax structure turbulence which measures the degree to which a country's tax structure changes from one year to another. Using data on 18 OECD countries over the period 1965–1995, we find clear evidence of a political budget cycle in national tax structures. More precisely, we find that in election years, tax structures are changed significantly less than in other years. Further, the dispersion of political power significantly lowers the ability of governments to change the tax structure. We do not, however, find any evidence of partisan budget cycles in national tax systems following political regime changes.

Citation

Ashworth, J., & Heyndels, B. (2002). Tax structure turbulence in OECD countries. Public Choice, 111(3-4), 347-376. https://doi.org/10.1023/a%3A1014957130671

• Journal Article Type: Article
• Publication Date: Apr 1, 2002
• Deposit Date: Apr 3, 2007
• Journal: Public Choice
• Print ISSN: 0048-5829
• Electronic ISSN: 1573-7101
• Publisher: Springer
• Peer Reviewed: Peer Reviewed
• Volume: 111
• Issue: 3-4
• Pages: 347-376
• DOI: https://doi.org/10.1023/a%3A1014957130671
• Public URL: https://durham-repository.worktribe.com/output/1631873