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Partisanship and taxation: An exploratory study of crisis responses

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  • Lierse, Hanna
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    Abstract

    With the outbreak of the financial crisis in 2008, European governments extensively intervened to avert a severe economic recession. Taxation is a crucial instrument to achieve such economic objectives, but it also represents a redistributive tool in democratic societies. Generally, left-wing parties are more supportive of progressive taxes and redistribution than right-wing governments. As a crisis response, one could assume that European governments, especially social-democrats, reinforced a redistributive stance to compensate for the substantial amounts of public money used to bail-out financial institutions. Yet, the internationalisation of capital markets has made it difficult to levy high income taxes as it might cause capital flights, less investments and growth. Based on the tax reforms introduced between 2008 and 2010, the paper explores how European governments mitigated the fiscal stress from the crisis. The findings show that fiscal pressures significantly restrained the policy choices available to governments. -- Mit dem Ausbruch der Wirtschafts- und Finanzkrise in 2008, verabschiedeten die Europäischen Regierungen vielfältige Maßnahmen, um eine langfristige Rezession zu verhindern. Steuern sind ein wichtiges Instrument, um solche wirtschaftspolitischen Zielen zu erreichen, jedoch stellen sie auch ein wichtiges Umverteilungsmittel in demokratischen Gesellschaften dar. Für gewöhnlich sind Parteien des linken Spektrums größere Befürworter von umverteilungspolitischen Maßnahmen und von progressiven Steuern als konservative und liberale Parteien. Als Antwort auf die Krise könnte man somit erwarten, dass Europäische Regierungen, vorzugsweise linke, umverteilungspolitische Maßnahmen verabschieden, besonders da große Mengen an Steuergeldern benötigt wurden, um für finanzielle Institutionen einen Rettungsschirm bereit zu stellen. Die Liberalisierung der Kapitalmärkte erschwert es jedoch, hohe Kapitalsteuern zu erheben, da befürchtet wird, dass dies eine Kapitalflucht, weniger Investitionen und Wachstum zur Folge haben könnte. Anhand der Steuerpolitik, die zwischen 2008 und 2010 eingeführt wurde, geht das Arbeitspapier der Frage nach, mit welchen Reformen Europäische Regierungen den Krisendruck bewältigt haben. Die empirischen Ergebnisse zeigen, dass fiskalpolitischer Druck den politischen Handlungsspielraum von Regierungen erheblich einschränkt.

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    Bibliographic Info

    Paper provided by University of Bremen, Collaborative Research Center 597: Transformations of the State in its series TranState Working Papers with number 159.

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    Date of creation: 2012
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    Handle: RePEc:zbw:sfb597:159

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    Keywords: crisis; fiscal stress; economic growth; tax policy; political parties; European Union;

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    1. Arne Heise & Hanna Lierse, 2011. "Wirtschaftskrise, Austeritätspolitik und das europäische Sozialmodell," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 37(2), pages 201-232.
    2. Swank, Duane, 2006. "Tax Policy in an Era of Internationalization: Explaining the Spread of Neoliberalism," International Organization, Cambridge University Press, vol. 60(04), pages 847-882, October.
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