STATE TAXES AND LEGISLATIVE TURNOVER IN THE UNITED STATES |
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| Authors: | Pavel A Yakovlev J Sebastian Leguizamon |
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| Institution: | 1. Department of Economics and Finance, Duquesne University, Pittsburgh, PA, 15282;2. Economics in the Gordon Ford College of Business, Western Kentucky University, Bowling Green, KY, 42101 |
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| Abstract: | Mounting empirical evidence suggests that term limits and, by extension, higher legislative turnover increase the overall size of government and change its spending composition. However, less is known about the turnover's impact on the composition of tax revenues. This study fills this void by exploiting exogenous variation in term limits and redistricting as instruments for legislative turnover, which is found to be positively associated with most state taxes except for the corporate income tax. We hypothesize that the negative association between legislative turnover and corporate income taxes might be influenced by a higher propensity of business owners to enter term-limited state legislatures. (JEL H7, H3) |
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