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The Globalization of Tax Policy: What German Politicians Believe

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  • Heinemann, Friedrich
  • Janeba, Eckhard

Abstract

The process of globalization has an important impact on national tax policies. Most of the literature on taxation of capital in open economies 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 (mobility of real capital and shifting of 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 cost of capital taxation in open economies are, even though our survey falls in period of extensive debate about and actual adoption of a company tax reform bill in Germany.

Suggested Citation

  • Heinemann, Friedrich & Janeba, Eckhard, 2007. "The Globalization of Tax Policy: What German Politicians Believe," ZEW Discussion Papers 07-057, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:6654
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    File URL: https://www.econstor.eu/bitstream/10419/24631/1/dp07057.pdf
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    References listed on IDEAS

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    Cited by:

    1. Osterloh, Steffen & Heinemann, Friedrich, 2013. "The political economy of corporate tax harmonization — Why do European politicians (dis)like minimum tax rates?," European Journal of Political Economy, Elsevier, vol. 29(C), pages 18-37.
    2. Friedrich Heinemann & Michael Förg & Eva Jonas & Eva Traut‐Mattausch, 2008. "Psychologische Restriktionen wirtschaftspolitischer Reformen," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 9(4), pages 383-404, November.
    3. Libman, Alexander & Ushkalova, Daria, 2009. "Post-Soviet countries in global and regional institutional competition: The case of Kazakhstan," MPRA Paper 12595, University Library of Munich, Germany.
    4. Friedrich Heinemann & Philipp Mohl & Steffen Osterloh, 2009. "Who’s afraid of an EU tax and why?—revenue system preferences in the European Parliament," The Review of International Organizations, Springer, vol. 4(1), pages 73-99, March.

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    More about this item

    Keywords

    Globalization; business taxation; tax competition; beliefs; member of parliament;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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