Political Parties and the Tax Level in the American States: A Regression Discontinuity Design

With a regression discontinuity design I show that the partisan identity of the majority in the state House of Representatives has no causal effect on the tax level. This result goes against recent findings in the political economy literature. In the state Senate I find a significant discontinuity in the tax level, but I also find a discontinuity in the density of the forcing variable - which implies that we can not interpret the discontinuity in the Senate as a causal relation. Another contribution of the paper is to investigate under which conditions slim majorities in the American states (as opposed to close election) are appropriate for a regression discontinuity design.Regression discontinuity design, Democrats, Republicans, divided government, line item veto, tax level.

The presence of webbing affects the oviposition rate of two-spotted spider mites, Tetranychus urticae (Acari: Tetranychidae)

Several species of tetranychid mites including Tetranychus urticae Koch (Acari: Tetranychidae) construct complicated three-dimensional webs on plant leaves. These webs provide protection against biotic and abiotic stress. As producing web is likely to entail a cost, mites that arrive on a leaf with web are expected to refrain from producing it, because they will gain the benefit of protection from the existing web. Mites that produce less web may then allocate resources that are not spent on web construction to other fitness-enhancing activities, such as laying eggs. To test this, the oviposition rate of T. urticae adult females was examined on leaves with web. As a control, we used leaves where the web had been removed, hence both types of leaves had been exposed to conspecifics previously and were thus damaged. On leaves with web, the oviposition rate of T. urticae females was higher than on leaves where the web had been removed. Therefore, the presence of web constructed by conspecifics enhanced the oviposition rate of T. urticae females. This provides indirect evidence that mites use the web constructed by conspecifics and thereby save resources that can be allocated to other traits that enhance reproductive succes

Separation of Powers, Line Item Veto and the Tax Level: Evidence from the American States Draft 1

Line item veto, a feature present in most American States, gives the governor the power to veto single appropriation items from the budget. Its effects on the tax level, however, are still controversial in the empirical and theoretical literature (cf. Holtz-Eakins (1988) and Besley and Case (2003)). Line item veto is mostly a time invariant feature and to asses its effects previous studies have interacted it with political control variables such as a divided government. The endogenity problems that arise from using a political variable to explain a policy variable, however, have not been dealt with in these studies. We use three empirical approaches to tackle the problem and show that line item veto does have a significant negative effect on the tax rate in the States: diffs-in-diffs estimation with instrumental variables (election results in lower offices at the state level), regression discontinuity design, and a dynamic panel. Our prior on its effects comes from adapting the separation of powers model by Persson, Roland and Tabellini (2000) to the American States setup: we add line item veto and an executive. Our model delivers a clear prediction on the tax level, on the amount of public good, and on the importance of group specific transfers.

Political Parties and the Tax Level in the American states: Two Regression Discontinuity Designs

Do parties matter? Yes, but not in the usual way we tend to think of them: big government Democrats and small government Republicans. Our first regression discontinuity design shows that whether the majority in the House of Representatives is Republican or Democratic does not affect the tax level. This surprising result goes against the recent literature in political economy. We then perform another regression discontinuity design in which we find that whether a government is aligned (both the Governor and the majority in the state House belong to the same party) or divided (they belong to different parties) does have an effect on the tax level. Taxes are higher when the government is aligned.Regression discontinuity design, Democrats, Republicans, divided government, line item veto, tax level.

Budgetary Separation of Powers in the American States and the Tax Level: A Regression Discontinuity Design

Should the Federal government and the remaining American states adopt the line item veto? What are its effects? We use regression discontinuity design to claim that in states with the line item veto, divided government has a causal negative effect on the tax level. By investigating a panel of 38 American states from 1960 to 2006, we estimate a significant discontinuous increase of 13% in the tax level as the party affiliated with the Governor in the state Legislature switches from being the minority party to being the majority. In the nine states that have block veto, we find no significant discontinuity in the tax level. We also find little evidence to suggest that the partisan identity of the majority party in the Legislature has a causal effect on the state tax level.Separation of powers, line item veto, tax level, regression discontinuity, nonparametric

Separation of Powers or Ideology? What Determines the Tax Level? Theory and Evidence from the US States.

We find the surprising result that the tax level is negatively correlated with the size of the Democratic majority in the interval in which the Democrats hold between 50 and 66% of the seats in the state Legislatures. This negative relationship suggests the failure of a simple ideological model that had found some support in the literature, that the main determinant of the tax level is the extent of partisan control over the Legislature. We compare this model with an alternative: a separation-of-powers model in which ideology plays no role in determining the tax level. The driving force of our model is the overlap between the supporters of the Governor and the supporters of the legislative majority. The tax level at first rises and then decreases as the size of the ruling majority increases above 50% of the seats, whether the legislative majority is of the same party as the Governor or from the opposition. This non-monotonic relationship is observed in the data and explained by our model.Separation of powers, divided government, line-item veto, tax level, semiparametric.