Abstract
The sales tax has long been hailed a workhouse of state and local public finance, but its future looks grim due in no small part to the continued proliferation of exemptions. While scholars have noted the role politics plays in eroding the sales tax base, no study has empirically investigated the matter. Using a panel of 44 states from 1980 to 2010, this study addresses this gap by exploring if states’ political institutions predict variations in the level and rate of sales tax base erosion. The models show that political institutions do not systematically determine base erosion in general; though, some factors such as gubernatorial election years and political competition are found to exert some influence. The implications of the study’s abundance of null findings are also discussed.
Acknowledgments
The author is a tax analyst with the New York City Independent Budget Office. The author received no public funding for this project. The views expressed herein are those of the author and not of the Independent Budget Office or the City of New York. The author thanks two anonymous referees and the editor for their constructive criticism. The author is solely responsible for all errors.
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©2015 by De Gruyter
Articles in the same Issue
- Frontmatter
- Articles
- Political Institutions and State Sales Tax Base Erosion
- Party Control and Perverse Effects in Majority-Minority Districting: Replication Challenges When Using DW-NOMINATE
- Unbiased Estimation of the Average Treatment Effect in Cluster-Randomized Experiments
- Substantive Importance and the Veil of Statistical Significance
- Assessing Robustness of Findings About Racial Redistricting’s Effect on Southern House Delegations
Articles in the same Issue
- Frontmatter
- Articles
- Political Institutions and State Sales Tax Base Erosion
- Party Control and Perverse Effects in Majority-Minority Districting: Replication Challenges When Using DW-NOMINATE
- Unbiased Estimation of the Average Treatment Effect in Cluster-Randomized Experiments
- Substantive Importance and the Veil of Statistical Significance
- Assessing Robustness of Findings About Racial Redistricting’s Effect on Southern House Delegations