Viewing tax policy through party-colored glasses: What German politicians believe

Friedrich Heinemann and Eckhard Janeba

No 805, Working Papers from Oxford University Centre for Business Taxation

Abstract: The process of globalization has an important impact on national tax policies. Most of the literature does not focus directly on the political decision making process and assumes that the desired tax policy is responding to objective underlying tradeoffs. Based on an original survey of members of German national parliament (Bundestag) in 2006/7 we document a strong ideological bias among policy makers with respect to the perceived mobility of international tax bases (real capital and paper profits). Ideology via party affiliation influences also directly and indirectly the perceived national autonomy in tax setting and preferences for a EU minimum tax for companies. There seems little consensus as to what the efficiency costs of capital taxation in open economies are, even though our survey falls in a period of extensive debate about and actual adoption of a company tax reform bill in Germany. From a comparative politics perspective our results document the strong role of party discipline in a parliamentary democracy as the actual voting behaviour within a party is much more cohesive than the survey evidence suggests.

Keywords: Globalization; business taxation; beliefs; member of parliament; profit shifting; party discipline; yardstick competition (search for similar items in EconPapers)
JEL-codes: D78 D83 H25 (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-acc, nep-cdm, nep-eec, nep-pbe and nep-pol
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Related works:
Journal Article: Viewing Tax Policy Through Party‐Colored Glasses: What German Politicians Believe (2011)
Journal Article: Viewing Tax Policy Through Party-Colored Glasses: What German Politicians Believe (2011)
Working Paper: Viewing tax policy through party-colored glasses: What German politicians believe (2011)
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