1. Tax policy POLI 352A

5. Taxes: Extracting resources Income Consumption Social insurance Wealth Corporation Tax expenditures

6. Varieties of tax policy United States –Progressive –Heavy corporate burden –Light consumption tax –Lots of tax expenditures Sweden –Regressive –High consumption tax –Light on active capital

7. Varieties of tax policy United Kingdom –Unstable and incoherent

15. Tax expenditures in the United States

18. Policy making regimes Corporatism/ PR Pluralism/ FPTP Parliamentary Sweden (Coherence & compromise) United Kingdom (Incoherence) Presidential United States (Fragmentation)

19. U.S.: Fragmentation Fragmented political authority Interest groups: Opportunities for narrow demands  Narrow organization of interests and demands  Heavy tax rates but  Narrow tax expenditures Weak parties, interest groups  Hard to make social bargains  Liberals reject consumption tax Even though it could finance social spending

20. Sweden: Coherence and compromise Proportional representation  Stable Social Democratic dominance –But minority = need for compromise Interest groups and politicians: Incentives to compromise Neo-corporatism, strong parties –Makes bargaining easier  Broad policy bargains –E.g., consumption taxes for social spending

21. United Kingdom: Incoherence and instability Centralized authority  Power for policy change  Adversarial party politics  Politicians: Incentives to campaign on polarized promises Keep them without compromise But administratively impossible to reverse all previous choices

23. Blame avoidance: Tax visibility Least popular taxes are most visible –Property and income Regressive, but less-visible taxes accepted –Social insurance and consumption  Big spenders rely more on less-visible taxes How? –Social bargains using neo-corporatist structures

24. Blame avoidance: Tax cut visibility Bush tax cuts –Far from median voter BUT –Overall costs delayed –Sunset provisions hide cost –Skewed distributive effects delayed –Immediate (but small), visible benefits for everyone –Framing

25. Conclusion Effects of institutional-interest group regimes –Fragmented –Inclusive –Adversarial Institutions shape actors’ policy demands Policy design crucial method of blame-avoidance Policy “choices” don’t necessarily reflect intentions

26. Debating policymaking regimes Four policymaking regimes 1.Westminsters (Parliamentary, FPTP) pluralist interests 2.Parliamentary, PR, neo-corporatist interests 3.Presidential, weak parties, pluralist interests 4.-- Westminster plus federalism Each group comes up with reasons why their regime is best –Define “best” – what criteria are you using? –If you use “democratic” as a criterion, define what you mean –Examples of types of policies –All group members take notes