Afecting Reelection Probability through Taxation

• Autores: María Socorro Puy Segura
• Localización: XIX Encuentro de Economía Pública: Políticas Públicas para la salida de la crisis, 2012, ISBN 978-84-695-1574-7, pág. 7
• Idioma: inglés
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• Resumen

  • The evaluation of voters over candidates that compete for o¢ ce can be distorted by the political decisions of an incumbent govern- ment. We analyze, from a theoretical viewpoint, how the likelihood of reelection can be in.uenced by income tax reforms a¤ecting the set of swing voters. We consider a two-party system in a two-period model.

    We .nd that a right-wing incumbent persuades voters by decreasing the progressivity of the tax scheme, whereas a left-wing incumbent opts for increasing the progressivity. We show that when the oppo- nent adjust its proposal on public expenditure to the implemented tax reform, the party in o¢ ce reduces the electoral use of tax reforms.

    Besides, the higher the o¢ ce-seeking incentives of the challenger, the lower the electoral use of tax reforms. Finally, when the challenger can credibly commit to an alternative tax reform, both parties converge proposing the most progressive tax scheme.