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The political cost of taxation: new evidence from German popularity ratings

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  • Geys, Benny
  • Vermeir, Jan

Abstract

Previous studies indicate that higher tax burdens reduce incumbents’ popularity and re-election odds. The present paper offers a new test of this relation for German data. Our findings indicate that taxation indeed negatively affects German federal government approval ratings, in line with previous international research. Nonetheless, the government’s popularity losses do not necessarily translate into comparable gains in the opposition’s popularity. In fact, the opposition may even lose support when there is ‘divided government’ (i.e. when it has some power over policies). Finally, we find some (albeit weak) evidence that the costs of taxation are limited to the tax burden imposed by the federal government and do not extend to taxes levied at lower levels of government. -- Bisherige Untersuchungen zeigen, dass höhere steuerliche Belastungen die Beliebtheit und Wiederwahlchancen von Amtsträgern mindern. Das vorliegende Papier überprüft diese Beziehung erneut anhand von Daten für Deutschland. Übereinstimmend mit internationalen Forschungsergebnissen zeigen unsere Resultate, dass Besteuerung die Zustimmung zur Arbeit der Bundesregierung tatsächlich negativ beeinflusst. Der Popularitätsverlust der Regierung setzt sich jedoch nicht notwendigerweise in vergleichbare Gewinne der Opposition um. Vielmehr ist im Falle von „Divided Government“ (d.h. die Opposition trägt ebenfalls Regierungsverantwortung) ein Verlust an Unterstützung der Opposition möglich. Schließlich finden wir Beweise (wenn auch schwache), dass die Kosten der Besteuerung durch die von der Bundesregierung auferlegte steuerliche Belastung begrenzt sind und nicht von Steuern beeinflusst werden, die von nachrangigen Regierungsebenen erhoben werden.

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Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Market Processes and Governance with number SP II 2008-06.

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Date of creation: 2008
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Handle: RePEc:zbw:wzbmpg:spii200806

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Keywords: Taxation; government approval; popularity function; Germany;

References

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Citations

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Cited by:
  1. De Witte, Kristof & Geys, Benny, 2010. "Evaluating efficient public good provision: Theory and evidence from a generalised conditional efficiency model for public libraries," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2010-14, Social Science Research Center Berlin (WZB).
  2. Geys, Benny, 2011. "Election cycles in MPs' outside interests? The UK House of Commons, 2005-2010," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2011-104, Social Science Research Center Berlin (WZB).
  3. Geys, Benny, 2010. "War casualties and US presidential popularity: A comparison of the Korean, Vietnam and Iraq war," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2010-05, Social Science Research Center Berlin (WZB).
  4. Geys, Benny & Vermeir, Jan, 2007. "Taxation and presidential approval: separate effects from tax burden and tax structure turbulence," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-09, Social Science Research Center Berlin (WZB).
  5. Irem Batool & Gernot Sieg, 2009. "Bread and the attrition of power: Economic events and German election results," Public Choice, Springer, vol. 141(1), pages 151-165, October.

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