Hostname: page-component-8448b6f56d-sxzjt Total loading time: 0 Render date: 2024-04-23T14:57:03.664Z Has data issue: false hasContentIssue false
  • English
  • Français

Business Political Power: The Case of Taxation

Published online by Cambridge University Press:  01 August 2014

Dennis P. Quinn  and
Robert Y. Shapiro
Dennis P. Quinn
Affiliation:
Georgetown University
Robert Y. Shapiro
Affiliation:
Columbia University
Get access Rights & Permissions [Opens in a new window]

Abstract

We examine contending views about the forms and mechanisms of business power in U.S. politics by estimating time series models explaining taxation and redistribution. Taxation and redistribution constitute strong cases for theories about business and class power, since all firms have an interest in reducing taxation. We find that changes in corporate taxation and in redistribution between capital gains income and earned income and between corporate taxation and individual taxation are strongly influenced by political partisanship, with Democratic administrations increasing the tax burden on firms and their owners. How far corporations engage in electoral financing—measured through the establishment of corporate political action committees—is also influential. The models show some evidence consistent with the understanding of class power conceptualized by Bowles, Gordon, and Weisskopf and the presence of election cycle effects but inconsistent with implications arising from the structural dependence of the state on capital and asset concentration in the largest corporations as a mechanism of class power.

Type
Articles
Information
American Political Science Review , Volume 85 , Issue 3 , September 1991 , pp. 851 - 874
Copyright
Copyright © American Political Science Association 1991

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Alesina, Alberto. 1988. “Macroeconomics and Politics.” NBER Macroeconomics Annual, 1988 3:13–52.CrossRefGoogle Scholar
Alt, James E. 1985. “Political Parties, World Demand, and Unemployment.” American Political Science Review 79:1016–40.Google Scholar
Bachrach, Peter, and Baratz, Morton. 1962. “Two Faces of Power.” American Political Science Review 56:947–52.Google Scholar
Banerjee, Anindya, and Besley, Timothy. 1990. “Moral Hazard, Limited Liability, and Taxation: A Principal-Agent Model.” Oxford Exonomic Papers 42:46–60.Google Scholar
Bauer, Raymond, Pool, Ithiel de Sola, and Dexter, Lewis A.. 1963. American Business and Public Policy. Chicago: Aldine, Athanon.Google Scholar
Biersack, Robert, and Wilcox, Clyde. 1990. “Financing National Campaigns.” American Politics Quarterly 18:215–41.CrossRefGoogle Scholar
Block, Fred. 1977. “The Ruling Class Does Not Rule.” Socialist Revolution 33:6–28.Google Scholar
Block, Fred. 1987. Revising State Theory: Essays in Politics and Postindustrialism. Philadelphia: Temple University Press.Google Scholar
Boies, John L. 1989. “Money, Business, and the State.” American Sociological Review 54:821–33.Google Scholar
Boskin, Michael. 1988. “Tax Policy and Economic Growth.” Journal of Economic Perspectives 2:71–97.Google Scholar
Bowles, Samuel, Gordon, David M., and Weisskopf, Thomas E.. 1989. “Business Ascendancy and Economic Impasse: A Structural Retrospective on Conservative Economics, 1979–1987.” Journal of Economic Perspectives 3:107–34.CrossRefGoogle Scholar
Brooks, Stephen H. 1984. “Macroeconometric Models: Theory and Practice—a Summary.” Business Economics, 10, pp. 9–17.Google Scholar
Burris, Vallon. 1987. “The Political Partisanship of American Business.” American Sociological Review 52:732–44.Google Scholar
Cameron, David. 1978. “On the Limits of the Public Economy.” American Political Science Review 78:1243–61.CrossRefGoogle Scholar
Chappell, Henry W., and Keech, William R.. 1988. “Choice and Circumstance: The Consequences of Partisan Macroeconomic Policies.” Paper presented at the annual meeting of the American Political Science Association, Washington.Google Scholar
Clawson, Dan, Neustadl, Alan, and Beardon, James. 1986. “The Logic of Business Unity: Corporate Contributions to the 1980 Congressional Elections.” American Sociological Review 51:797–811.CrossRefGoogle Scholar
Edsall, Thomas Byrne. 1988. Power and Money: Writing about Politics, 1971–1987. New York: Norton.Google Scholar
Epstein, Edwin M. 1968. Corporations, Contributions, and Political Campaigns: Federal Regulations in Perspective. Berkeley: Institute of Governmental Studies.Google Scholar
Epstein, Edwin M. 1969. The Corporation in American Politics. Englewood Cliffs: Prentice-Hall.Google Scholar
Epstein, Edwin M. 1984. “PACs and the Modern Political Process.” In The Impact of the Modern Corporation, ed. Bock, Betty et al. , New York: Columbia University Press.Google Scholar
Fair, Ray C. 1990. “Macroeconometric Models.” In The New Palgrave: Econometrics, ed. Eatwell, John, Milgate, Murray, and Newman, Peter. New York: Norton.Google Scholar
Fama, Eugene. 1981. “Stock Returns, Real Activity, Inflation and Money.” American Economic Review 71:545–64.Google Scholar
Federal Reserve Bank. 1989a. Balance Sheets of the United States. Washington: Federal Reserve.Google Scholar
Federal Reserve Bank. 1989b. Flow of Funds. Washington: Federal Reserve.Google Scholar
Feldstein, Martin, and Summers, Lawrence. 1979. “Inflation and the Taxation of Capital Income in the Corporate Sector.” National Tax Journal 32:445–70.CrossRefGoogle Scholar
Fox, J. Ronald. 1982. Managing Business-Government Relations. Homewood, IL: Irwin.Google Scholar
Fullerton, Don. 1984. “Which Effective Tax Rate?” National Tax Journal 37:23–41.Google Scholar
Ginsberg, Benjamin, and Shefter, Martin. 1990. Politics by Other Means: The Declining Importance of Elections in America. New York: Basic Books.Google Scholar
Griliches, Zvi. 1967. “Distributed Lags: A Survey.” Econometrica 35:16–49.Google Scholar
Hall, Robert, and Taylor, John B.. 1988. Macroeconomics. New York: Norton.Google Scholar
Hibbs, Douglas. 1987. The American Political Economy. Cambridge: Harvard University Press.Google Scholar
Hicks, Alexander. 1986. “Class Influence on Redistributive Policy: The Case of U.S. State Governments, 1951–1961.” Journal of Political and Military Sociology 14:91–114.Google Scholar
Hicks, Alexander. 1988. “Social Democratic Corporatism and Economic Growth.” Journal of Politics 50:677–704.Google Scholar
Hicks, Alexander, and Swank, Duane. 1984. “Government Redistribution in Rich Capitalist Democracies.” Policy Studies Journal 13:265–86.Google Scholar
Holland, Daniel M., and Myers, Stewart C.. 1980. “Empirical Studies of the Rate of Return to Capital: Profitability and Capital Costs for Manufacturing Corporations and All Nonfinancial Corporations.” Proceedings of the American Economic Association 70:320–25.Google Scholar
Hulten, Charles R., and Robertson, James. 1984. “The Taxation of High Technology Industries.” National Tax Journal 37:327–45.Google Scholar
International Monetary Fund. 1989. International Financial Statistics Yearbook. Washington: IMF.Google Scholar
Jackman, Robert W. 1986. “Elections and Democratic Class Struggle.” World Politics 39:123–46.CrossRefGoogle Scholar
Jackman, Robert W. 1987. “The Politics of Economic Growth in Industrial Democracies, 1974–1980.” Journal of Politics 49:242–56.CrossRefGoogle Scholar
Jacobs, David. 1985. “Radical Models of the Business-Government Relationship.” Research in Corporate Social Performance and Policy 7:1–23.Google Scholar
Jacobs, David. 1988. “Corporate Taxation and Corporate Economic Power.” American Journal of Sociology 93:852–81.Google Scholar
Jacobs, David. 1989. “Conceptual and Methodological Errors in Models of Political Economy: A Reply to Quinn.” American Journal of Sociology 94:1427–33.CrossRefGoogle Scholar
Jacobson, Robert. 1990. “Unobservable Effects and Business Performance.” Marketing Science 9:74–95.Google Scholar
John, Kose, Senbat, Lemma, and Sundaram, Anant. 1990. “Corporate Limited Liability and the Design of Corporate Taxation.” Typescript. University of Maryland.Google Scholar
Jones, Hywel. 1975. An Introduction to Modern Theories of Economic Growth. London: Van Nostrand Reinhold.Google Scholar
Katzenstein, Peter J. 1985. Small States in World Markets. Ithaca: Cornell University Press.Google Scholar
King, Mervyn, and Fullerton, Don, eds. 1984. The Taxation of Income from Capital: A Comparative Study of the United States, the United Kingdom, Sweden, and West Germany. Chicago: University of Chicago Press.Google Scholar
Krasner, Steven. 1978. Defending the National Interest. Princeton: Princeton University Press.Google Scholar
Krasner, Steven. 1984. “Approaches to the State.” Comparative Politics 16:223–46.Google Scholar
Lange, Peter, and Garrett, Geoffery. 1985. “The Politics of Growth.” Journal of Politics 47:792–827.CrossRefGoogle Scholar
Lange, Peter, and Garrett, Geoffery. 1987. “The Politics of Growth Reconsidered.” Journal of Politics 49:257–67.Google Scholar
Lindblom, Charles E. 1977. Politics and Markets: The World's Political-Economic System. New York: Basic Books.Google Scholar
Lindblom, Charles E. 1984. “Comment on Vogel.” In The Impact of the Modern Corporation, ed. Bock, Betty, New York: Columbia University Press.Google Scholar
Lowi, Theodore. 1964. “American Business, Public Policy, Case Studies, and Political Theory.” World Politics 16:677–715.Google Scholar
Lucas, Robert E. Jr. 1976. “Econometric Policy Evaluation: A Critique.” Carnegie-Rochester Conferences on Public Policy 1:19–46.CrossRefGoogle Scholar
Martin, Cathie Jo. 1991. Shifting the Burden: The Struggle over Growth and Corporate Taxation. Chicago: University of Chicago Press. Forthcoming.Google Scholar
Masters, Marick F., and Keim, Gerald D..1985. “The Determinants of PAC Participation among Large Corporations.” Journal of Politics 47:1158–73.Google Scholar
Mizruchi, Mark S. 1989. “Similarity of Political Behavior among Large American Corporations.” American Journal of Sociology 95:401–24.Google Scholar
Neustadtl, Alan, and Clawson, Dan. 1988. “Corporate Political Groupings.” American Sociological Review 53:172–90.Google Scholar
Offe, Claus. 1984. Contradictions of the Welfare State. Cambridge: Massachusetts Institute of Technology Press.Google Scholar
Olson, Mancur. 1965. The Logic of Collective Action. Cambridge: Harvard University Press.Google Scholar
Organization for Economic Cooperation and Development. 1987. Historical Statistics, 1960–1985. Paris: OECD.Google Scholar
Ornstein, Norman J., Mann, Thomas E., and Malbin, Michael J.. 1990. Vital Statistics on Congress, 1989–1990. Washington: Congressional Quarterly.Google Scholar
Ostrom, Charles W. Jr. 1978. Time Series Analysis: Regression Techniques. Beverly Hills: Sage.Google Scholar
Pechman, Joseph A. 1987. Federal Tax Policy. 5th ed. Washington: Brookings.Google Scholar
Pertschuck, Michael. 1982. Revolt against Regulation. Berkeley: University of California Press.CrossRefGoogle Scholar
Poulantzas, Nicos. 1976. The Crisis of the Dictatorships. London: New Left Books.Google Scholar
Przeworski, Adam, and Wallerstein, Michael. 1988. “Structural Dependence of the State on Capital.” American Political Science Review 82:11–30.Google Scholar
Quinn, Dennis P. 1988a. Restructuring the Automobile Industry: A Study of Firms and States in Modem Capitalism. New York: Columbia University Press.Google Scholar
Quinn, Dennis P. 1988b. “Investment Incentives: A Five-Country Test of the Lindblom Hypothesis.” Research in Corporate Social Policy and Performance 10:87–111.Google Scholar
Quinn, Dennis P. 1989. “Corporate Taxation and Corporate Economic Power: Comment.” American Journal of Sociology 94:1419–26.Google Scholar
Quinn, Dennis P., and Shapiro, Robert Y.. 1991. “Economic Growth Strategies: The Effects of Partisan and Electoral Politics on Interest Rates and Business Taxation in the United States.” American Journal of Political Science 35: 656–85.Google Scholar
Salamon, Lester M., and Siegfried, John J.. 1977. “Economic Power and Political Influence: The Impact of Industry Structure on Public Policy.” American Political Science Review 71:1026–43.Google Scholar
Schattschneider, Emil E. 1960. The Semi-Sovereign People. New York: Harper & Row.Google Scholar
Schlozman, Kay L., and Tierney, John T.. 1986. Organized Interests and American Democracy. New York: Harper & Row.Google Scholar
Schwartz, Michael, ed. 1987. The Structure of Power in America. New York: Holmes & Meier.Google Scholar
Skowronek, Stephen. 1982. Building a New American State. New York: Cambridge University Press.CrossRefGoogle Scholar
Stanley, Harold W., and Niemi, Richard. 1990. Vital Statistics on American Politics. 2d ed. Washington: Congressional Quarterly.Google Scholar
Swank, Duane. 1989. “Capital Formation, Politics, and Income Redistribution in Western Capitalist Democracies.” Presented at the annual meeting of the American Political Science Association, Atlanta.Google Scholar
Tufte, Edward R. 1978. Political Control of the Economy. New Haven: Yale University Press.CrossRefGoogle Scholar
U.S. Bureau of the Census. 1975. Historical Statistics of the United States, Colonial Times to 1970. Washington: GPO.Google Scholar
Useem, Michael. 1984. The Inner Circle. New York: Oxford University Press.Google Scholar
Vogel, David. 1986. National Styles of Regulation. Ithaca: Cornell University Press.Google Scholar
Vogel, David. 1987. “Political Science and the Study of Corporate Power: A Dissent from the New Conventional Wisdom.” British Journal of Political Science 17:385–405.CrossRefGoogle Scholar
Vogel, David. 1989. Fluctuating Fortunes. New York: Basic.Google Scholar
Weidenbaum, Murray. 1986. Business, Government, and the Public. 3d ed. Englewood Cliffs: Prentice-Hall.Google Scholar
Wilson, Graham K. 1990. “Corporate Political Strategies.” British Journal of Political Science 20:281–88.Google Scholar
Wilson, James Q., ed. 1980. The Politics of Regulation. New York: Basic Books.Google Scholar
Windsor, Duane. 1989. “The Theory of Business Politics.” Presented at the annual meeting of the American Political Science Association, Atlanta.Google Scholar
Woolley, John. 1988. “Partisan Manipulation of the Economy.” Journal of Politics 50:335–60.Google Scholar
Wright, John W. 1990. “Contributions, Lobbying, and Committee Voting in the U.S. House of Representatives.” American Political Science Review 84:417–38.Google Scholar