Document Type
Article
Publication Date
2009
Abstract
This paper investigates whether reputation-building strategies guide U.S. governors’ responses to changes in federal cigarette taxes (i.e. vertical tax interactions). Using 1975-2000 state cigarette tax data, we find that reputation-building strategies affect the nature of vertical tax externalities. Lame duck governors exhibit a more negative response to changes in the federal cigarette tax. Thus, by reducing the state tax base and by causing a decline in the state tax, an increase in the federal tax rate reduces state tax revenues in states headed by lame ducks.
Recommended Citation
Fredriksson, Per G. and Mamun, Khawaja, "Gubernatorial Reputation and Vertical Tax Externalities: All Smoke, No Fire?" (2009). WCBT Working Papers. 6.
https://digitalcommons.sacredheart.edu/wcob_wp/6
Included in
Business Law, Public Responsibility, and Ethics Commons, Other Public Affairs, Public Policy and Public Administration Commons, Taxation Commons
