The main purpose of this study is to examine a relationship between budget deficit and indirect taxes in political instability. Between 1985 and 2003, budget policies were influenced by unstable political conditions. In order to explain the financing of the budget deficits under the political instabilities. In the first part of the study, theoretical developments will be explained. Second, Turkish political and economic conditions will be analyzed. Third, econometric tests and results will be discussed. We propose that indirect taxes are more utilized than direct taxes during the political instability periods.