The New Political Economy of Taxation in Advanced Capitalist Democracies

We articulate and test an explanation for the remarkable change and conti-nuity in contemporary tax policy in capitalist democracies. We argue that internationalization, domestic eco-nomic change, and budgetary pres-sures each prompt significant changes in tax policy; yet, together, they create a system of constraints on altering the level and distribution of tax burdens. We utilize 1981 to 1995 data from fourteen developed de-mocracies to analyze the determi-nants of taxation. We find that capital mobility and trade are associated