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

Besteuerung und Popularität von Politikern: Neue Ergebnisse für die Deutsche Bundesregierung 1978-2003

Benny Geys and Jan Vermeir

Discussion Papers, Research Unit: Market Processes and Governance from WZB Berlin Social Science Center

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.

Keywords: Taxation; government approval; popularity function; Germany (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (13)

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