KOMMUNALSKATTER OCH KONJUNKTUR

Sammanfattning: Fiscal policy and its consequences have attracted much attention on both academic and societal level, in Sweden and elsewhere. However, the dependence between fiscal policy on municipality level and business cycles has only recently sparked a debate among Swedish economists. Studies point out that a law which came to force in 2000, balanskravet, may have caused municipalities to lower expenditures, alternatively raising taxes, during recessions. This thesis examines how the level of municipality taxes depends on business cycle fluctuations and the impact that balanskravet has had on this correlation. We employ econometric regressions, with annual data covering the period 1980-2014, to enable an analysis of the dependence between taxes and business cycles, both before and after the introduction of balanskravet. The outcome of our tests indicates that a procyclical tax-behavior has existed throughout the studied period. However, contrary to the critique on balanskravet, the law does not seem to have had the expected enhancing effect on this behavior. Even so, the finding that tax policy among Swedish municipalities is conducted procyclical is problematic, according to economic theory. This thesis provides recommendations on further policy reforms in order to enable municipalities to avoid procyclical taxing.