Ideology and taxation in Latin America

Stein, Ernesto and Caro, Lorena (2017) Ideology and taxation in Latin America. Economía, 17 (2). 1 - 27. ISSN 1529-7470

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Abstract

This paper examines the impact of ideology on tax revenues in Latin America, using a panel of seventeen countries from 1990 to 2010. As a first approach, a fixed-effects model is used to identify the impact of government ideology on taxation; left-leaning governments are associated with increases in total tax revenues and income tax revenues of 2.2 and 1.3 percent of GDP, respectively. There is no effect on revenues from VAT or social security taxes. To deal with endogeneity problems, an event study methodology is used to track the behavior of revenues around the time of the shifts to the left. A comparison of revenues immediately before and after the shift in government ideology shows that revenues and income tax revenues increase by 1.3 and 0.8 percent of GDP. JEL Classifications: H20, P16

Item Type:	Article
Official URL:	https://economia.lse.ac.uk/
Additional Information:	© 2017 LACTEA
Divisions:	LSE
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HJ Public Finance
JEL classification:	P - Economic Systems > P1 - Capitalist Systems > P16 - Political Economy H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H20 - General
Date Deposited:	15 Jul 2024 14:09
Last Modified:	15 Jul 2024 14:09
URI:	http://eprints.lse.ac.uk/id/eprint/123080

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