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The political cost of taxation: new evidence from German popularity ratings
[Besteuerung und Popularität von Politikern: Neue Ergebnisse für die Deutsche Bundesregierung 1978-2003]

  • Geys, Benny
  • Vermeir, Jan

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.

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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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    [Besteuerung und Popularität von Politikern: Gibt es unterscheidbare Wirkungen aufgrund der Steuerl
    ," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-09, Social Science Research Center Berlin (WZB).
  7. Ashworth, John & Geys, Benny & Heyndels, Bruno, 2006. "Determinants of tax innovation: The case of environmental taxes in Flemish municipalities," European Journal of Political Economy, Elsevier, vol. 22(1), pages 223-247, March.
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  18. Blinder, Alan S., 1985. "'Rationality, causality, and the relation between economic conditions and the popularity of parties' by Gebhard Kirchgassner," European Economic Review, Elsevier, vol. 28(1-2), pages 269-272.
  19. Nannestad, Peter & Paldam, Martin, 1994. " The VP-Function: A Survey of the Literature on Vote and Popularity Functions after 25 Years," Public Choice, Springer, vol. 79(3-4), pages 213-45, June.
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