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The Effect of Supermajority Vote Requirements for Tax Increase in California: A Synthetic Control Method Approach

Published online by Cambridge University Press:  25 January 2021

Soomi Lee
Soomi Lee*
Affiliation:
University of La Verne, La Verne, CA, USA
*
Soomi Lee, Department of Public and Health Administration, University of La Verne, 1950 Third Street, CBPM 120, La Verne, CA 91750, USA. Email: slee4@laverne.edu
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Abstract

My article examines whether supermajority vote requirements (SMVR) to raise taxes in California's constitution suppresses state tax burdens. SMVR is a politically popular but contentious measure that 16 states have adopted and many other states have attempted to adopt. The rationale behind the rule is to contain the growth of government by making it costly to form a winning coalition to raise taxes. Nonetheless, the current empirical literature is mixed at best and suffers from causal inference. I take a different approach from extant literature and estimate the causal effect of SMVR on tax burdens in California by using synthetic control methods. The results show that, from 1979 to 2008, SMVR reduced the state nonproperty tax burden by an average of $1.44 per $100 of personal income, which is equivalent to 21% of the total tax burden for each year. The effect of SMVR was immediate after its adoption, but has abated over time.

Keywords

supermajorityCaliforniabudget processstate budgetbudget institutionsynthetic control methodstax increasefiscal constitutionstate taxProposition 13
Type
Research Article
Information
State Politics & Policy Quarterly , Volume 14 , Issue 4 , December 2014 , pp. 414 - 436
Copyright
Copyright © The Author(s) 2014

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