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Sabet, Navid
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Munich Discussion Paper 2016-13
This paper documents the impact of voter turnout on top marginal tax rates in the 34 OECD countries for the period between 1974 and 2014. Across a number of specifications, I find that increases in voter turnout have a positive and statistically significant effect on top tax rates. This finding is broadly consistent with the median voter theorem that posits government redistribution to be a function of the income of the median voter. Because turnout has fallen drastically in the decades leading to 2014, and because the decrease is strongly correlated with income, the pivotal voter is no longer the one whose income lies near the median of the overall income distribution but instead the one whose income is at the median of a much richer subset of the distribution. Using ordinary least squares estimation as well as panel data methods, I find that increases in turnout are associated with higher rates of income tax for top earners. An instrumental variables approach confirms my hypothesis, though the estimates are less precisely estimated.
voter turnout
income tax
government policy
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Working Paper

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