Revisiting the Socio-Economic Impact of the PRRPs: The Case of Taxation

• In Event: Populism, Polity, and Economy

Abstract

PRRPs have for a long time predominantly been perceived as a cultural force that focuses on their core issue of immigration. When PRRPs socio-economic positions and policies have been discussed, they have always been contested. Debates about PRRPs' tax preferences and tax policies of PRRPs have hardly ever been rigorously studied. This is surprising, as many PRRPs have started as anti-tax movements and PRRPs' alleged stances on taxes are at the heart of the debate about the socio-economic priorities of the far-right ever since.
PRRPs have for a long time predominantly been perceived as a cultural force that focuses on their core issue of immigration. In contrast, the debate about PRRPs socio-economic positions and policies have always been characterized by contestation, ranging from unimportance, blurring over market liberal to selective interventionist and chauvinist. Whereas PRRPs' welfare agenda becomes increasingly clear, tax preferences and tax policies of PRRPs have hardly ever been rigorously studied. This is surprising, as many PRRPs have started as anti-tax movements and PRRPs' alleged stances on taxes are at the heart of the debate about the socio-economic priorities of the far-right ever since.
Accordingly, this analysis aims to put tax preferences and tax policies of PRRPs in the OECD on a more solid footing. Based on a literature review and expert-coded manifestos of all PRRPs that made it into government, I demonstrate that PRRPs feature a highly regressive tax mix that is informed by the ideology of nativist producerism. Furthermore, I show that tax policies also salient too PRRPs, in many cases more salient than immigration. The salience of tax policies is measured by a transformer model trained with human annotations and applied to all available manifestos of PRRPs.
On the policy level and based on entropy balanced mixed effects panel regressions over 35 countries from 1980 to 2019 using newly assembled tax data, we observe that PRRPs in government are associated with significant reductions in top marginal income tax rates, corporate taxes, an increase in sales tax rates and a decrease in tax progressivity. In short, PRRPs deliver on their campaign pledges by implementing a highly regressive tax mix, that is even significantly more regressive than the tax-mix of counterfactual centre-right governments. I discuss some the robustness of the findings as well as some exceptional cases. The results demonstrate that PRRPs tax policies neither resemble Kitschelts’ “winning formulae” nor Muddes' claim that “it is not the economy, stupid!”. More importantly, I conclude that PRRPs policies are emblematic of a meaningful shift in the discourse, perception and the policies of redistribution.

Author

• Leonce Roeth, University of Cologne