Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/146426
Authors: 
Hallerberg, Mark
Scartascini, Carlos G.
Year of Publication: 
2015
Series/Report no.: 
IDB Working Paper Series IDB-WP-613
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.
Subjects: 
Taxation
Banking crises
Elections
Political economy
Fiscal reform
Ideology
Policymaking
JEL: 
F41
H2
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by-nc-nd/3.0/igo/legalcode
Document Type: 
Working Paper

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