THE POLITICAL COSTS OF TAX INCREASES AND EXPENDITURE REDUCTIONS - EVIDENCE FROM STATE LEGISLATIVE TURNOVER

This paper estimates the political costs of increasing taxes and cutti ng expenditures for members of a legislature. It is found that both co sts are individually significant, but that they are not significantly different. This coincides with the first order condition for maximizat ion of the probability of reelection. Republican legislatures have a h igher political cost for taxes, thus the party's relative bias toward smaller government is founded in stronger constituent preferences agai nst taxes, not for lower spending. Additionally, by being ideologicall y conservative, Republicans lower the political costs of taxes, while by being more liberal, Democrats lower the cost of cutting expenditure s.