The Globalization of Tax Policy: What German Politicians Believe

35 Pages Posted: 22 Oct 2007 Last revised: 17 Aug 2009

See all articles by Friedrich Heinemann

Friedrich Heinemann

ZEW – Leibniz Centre for European Economic Research; University of Heidelberg - Alfred Weber Institute for Economics

Eckhard Janeba

University of Mannheim - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: 2007

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.

Keywords: Globalization, business taxation, tax competition, beliefs, member of parliament

JEL Classification: D78, D83, H25

Suggested Citation

Heinemann, Friedrich and Janeba, Eckhard, The Globalization of Tax Policy: What German Politicians Believe (2007). ZEW - Centre for European Economic Research Discussion Paper No. 07-057. Available at SSRN: https://ssrn.com/abstract=1023542 or http://dx.doi.org/10.2139/ssrn.1023542

Friedrich Heinemann (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

HOME PAGE: http://www.zew.de

University of Heidelberg - Alfred Weber Institute for Economics ( email )

Grabengasse 14
Heidelberg, D-69117
Germany

Eckhard Janeba

University of Mannheim - Department of Economics ( email )

L7, 3-5
D-68131 Mannheim
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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