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Benny Geys and Jan Vermeir
The Political Cost of Taxation: New
Evidence from German Popularity Ratings
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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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