The Electoral Consequences of Tax Increases: Are Parties Punished for Raising Taxes?

Do governments presiding over tax increases lose votes? One assumption is tax increases affect incumbent parties equally but we also expect asymmetric responses with differing penalties for left- and right-wing parties. Influential literature also assumes voters incapable of assigning responsibility to policymakers or holding them accountable. We find that tax increases are more costly to a left-of-centre party. Previous research assessing this is hampered by a lack of comparable cases; however, our tests are conducted with results from thousands of English local elections across decades. We find tax increases by labour-controlled councils corresponded with a significant vote swing against labour. There were no effects of rate increases on votes for conservative-controlled or Lib Dem-controlled councils. These results have implications for how democratic elections may produce responsive governments, and we discuss why there may be an asymmetry, where there is more electoral responsiveness to tax increases by governments of the left.