Teaching Political Economy: On the Economics Significance of the Public's Job Approval Rating of the President

Richard Cebula () and Heather Smith

MPRA Paper from University Library of Munich, Germany

Abstract: This study empirically investigates the hypothesis that the lower the public’s job approval rating of the U.S. President, the higher the degree of aggregate federal personal income tax evasion in the U.S. Using annual data on aggregate federal personal income tax evasion for the period 1960-2001 compiled by Feige, with 2001 being the most recent year for which these data are currently available, and allowing for such factors as federal income tax rates, IRS tax return audit rates, the tax-free municipal bond yield, the interest rate penalty on detected unreported income, public dissatisfaction with government officials (other than the U.S. President), and the Tax Reform Act of 1986, this study finds consistent empirical support for the hypothesis that income tax evasion is a decreasing function of the Presidential approval rating, i.e., that the lower (higher) the President’s approval rating, the greater (lower) the degree of aggregate federal personal income tax evasion. Finally, use of two well-known alternative estimates of the aggregate degree of federal personal income tax evasion yields results generally consistent with these conclusions.

Keywords: underground economy; tax evasion; political economy; presidential job approval rating (search for similar items in EconPapers)
JEL-codes: E26 H22 H24 H26 M42 (search for similar items in EconPapers)
Date: 2008-01-18
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Expanding Teaching and Learning Horizons in Economic Education (2009): pp. 155-163

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/56785/1/MPRA_paper_56785.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:56785

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().