Revenue Autonomy Preference in German State Parliaments

Friedrich Heinemann, Eckhard Janeba, Marc-Daniel Moessinger () and Christoph Schröder

VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order from Verein für Socialpolitik / German Economic Association

Abstract: Federal states in Germany are characterized by low fiscal autonomy. Equalization systems in place balance revenue differences to a considerable extent and states cannot independently set taxes of any major relevance. Although these features of German federalism are notorious for their disincentives none of the recent reform initiatives of German federalism have been able to change the system. This study makes use of a unique survey among the members of all 16 state parliaments to explain the formation of autonomy preferences. It tests to which extent the preferences of state policy makers for tax autonomy and fiscal equalization are driven by states self-interest, party ideology and individual characteristics. The results point, inter alia, to the role of state deficit and the structural differences between states. States with high permanent deficits are more opposed to tax autonomy and more in favour of higher fiscal equalization transfers.

JEL-codes: H63 H74 H77 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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Working Paper: Revenue autonomy preference in German state parliaments (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc13:79736

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