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Taxation and Representation in Recent History

37 Pages Posted: 27 Aug 2008 Last revised: 31 Jan 2010

Jeffrey F. Timmons

NYU Abu Dhabi

Date Written: February 10, 2009

Abstract

This paper disaggregates government accounts to examine whether and how representation affects the level and distribution of taxation. Using panel data for over 100 countries from 1970-1999 and cross-sectional data for approximately 75 democracies from 1990-98, we find that both democratization and voter turnout induced a modest but highly systematic increase in revenue from regressive taxes on consumption. While one-third of the increase due to democratization reflects a shift from more inefficient and similarly regressive taxes on trade, most of it was new revenue. Less convincingly, democratization and voter turnout also increased total tax revenue. By contrast, neither democracy, nor voter turnout systematically increased revenue from progressive taxes on income and capital. With reasonable assumptions about tax incidence and participation patterns, these findings shed light on competing conceptions of taxation and representation.

Keywords: democracy, representation, taxation

JEL Classification: H2

Suggested Citation

Timmons, Jeffrey F., Taxation and Representation in Recent History (February 10, 2009). Available at SSRN: https://ssrn.com/abstract=1250922 or http://dx.doi.org/10.2139/ssrn.1250922

Jeffrey F. Timmons (Contact Author)

NYU Abu Dhabi ( email )

PO Box 129188
Abu Dhabi
United Arab Emirates
(971) 262 84523 (Fax)

HOME PAGE: http://https://nyuad.nyu.edu/en/academics/faculty/jeffrey-timmons.html

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