Business taxes and the electoral cycle

Foremny, Dirk; Riedel, Nadine

Eingang zum Volltext

Foremny, Dirk ; Riedel, Nadine

Business taxes and the electoral cycle

Bitte beziehen Sie sich beim Zitieren dieses Dokumentes immer auf folgende
URN: urn:nbn:de:bsz:100-opus-6834
URL: http://opus.uni-hohenheim.de/volltexte/2012/683/

pdf-Format:

Dokument 1.pdf (2.877 KB)

Dokument in Google Scholar suchen:

Social Media:

Export:

Abrufstatistik:

SWD-Schlagwörter:

Steuer , Finanzpolitik

Institut 1:

Institut für Volkswirtschaftslehre

Institut 2:

Forschungszentrum Innovation und Dienstleistung

DDC-Sachgruppe:

Wirtschaft

Dokumentart:

ResearchPaper

Schriftenreihe:

FZID discussion papers

Bandnummer:

Sprache:

Englisch

Erstellungsjahr:

2012

Publikationsdatum:

14.02.2012

Lizenz:

Veröffentlichungsvertrag mit der Universitätsbibliothek Hohenheim ohne Print-on-Demand

Kurzfassung auf Englisch:

The purpose of this paper is to assess whether politicians manipulate the timing of tax rate changes in a strategic way to maximize reelection prospects. To do so, we exploit the German local business tax as a testing ground which is set autonomously by German municipalities. As election dates vary across local councils, the data allows us to disentangle effects related to the timing of elections from common trends. Using a rich panel data-set for German municipalities, we assess the impact of elections on local business tax choices. The findings support the notion of a political cycle in tax setting behavior as the growth rate of the local business tax is significantly reduced in the election year and the year prior to the election, while it jumps up in the year after the election. This pattern turns out to be robust against a number of sensitivity checks.