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Citizens Prefer Lower Taxes Than Parliaments (But Not Always)

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  • Stephan Geschwind
  • Felix Rösel

Abstract

Are taxes higher or lower if citizens instead of parliaments legislate policies? A new study shows: It all depends on the tax category. Property tax, which everyone has to pay, is more likely to decrease. Business taxes, by contrast, remain almost unchanged. The results are based on a rule in the German Basic Law that allows direct democracy at the municipal level in Germany. 30 of about 11,000 municipalities in Germany do not elect municipal councils, but have a citizen assembly of all eligible voters as local legislature.

Suggested Citation

  • Stephan Geschwind & Felix Rösel, 2021. "Citizens Prefer Lower Taxes Than Parliaments (But Not Always)," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 28(05), pages 07-09, October.
    • Handle: RePEc:ces:ifodre:v:28:y:2021:i:05:p:07-09
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    References listed on IDEAS

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    1. Geschwind, Stephan & Roesel, Felix, 2022. "Taxation under direct democracy," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 536-554.
    2. Frey, Bruno S, 1994. "Direct Democracy: Politico-economic Lessons from Swiss Experience," American Economic Review, American Economic Association, vol. 84(2), pages 338-342, May.
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    Cited by:

    1. Grieco, Daniela & Bripi, Francesco, 2022. "Participation of charity beneficiaries," Journal of Economic Behavior & Organization, Elsevier, vol. 199(C), pages 1-17.

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