Does the Parliament Ideology Affect Corporate Taxation? Evidence of EU countries

Vitek Leos and Vujcic Stevan
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Vitek Leos: Prague University of Economics and Business, Prague, Czech Republic.
Vujcic Stevan: Prague University of Economics and Business, Prague, Czech Republic.

NISPAcee Journal of Public Administration and Policy, 2025, vol. 18, issue 1, 192-213

Abstract: The article aims to analyse whether corporate income taxation is influenced by the prevailing ideology of parliaments (left-wing vs right-wing). The primary research method used is econometric analysis: three different estimation techniques were used on three dependent variables connected with corporate taxation. Nine models were developed to discover whether a political explanatory variable, “Centre of Political Gravity”, drives corporate taxation decisions. Additionally, variables were employed as controls: Gross Operating Surplus, 10-Year Government Bond Yield, Debt/GDP ratio and the Rule of Law index. The overall dataset is in panel format, consisting of 27 EEA countries covering 2004 to 2019. The results suggest that a parliament’s majoritarian ideology can influence the effective corporate income tax rate. It is found that left-wing parliaments tend to increase this rate.

Keywords: corporate income tax; effective tax rate; ideology of parliament; tax policy (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:njopap:v:18:y:2025:i:1:p:192-213:n:1009

DOI: 10.2478/nispa-2025-0009

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