The Real Estate Transfer Tax and Government Ideology: Evidence from the German States

32 Pages Posted: 20 Jun 2017

See all articles by Manuela Krause

Manuela Krause

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Niklas Potrafke

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: May 30, 2017

Abstract

In 2006, the reform of the German fiscal constitution realigned legislative powers between the federal and the state governments. Since 2007, the German state governments have been allowed to design real estate transfer tax rates. We investigate whether government ideology predicts the levels and increases in the real estate transfer tax rates; and show that leftwing and center governments were more active in increasing the real estate transfer tax rates than rightwing governments. The result is important because many voters were disenchanted with the policies and platforms of the established German parties in the course of the euro and refugee crisis. Disenchantment notwithstanding, the established political parties are still prepared to offer polarized policies.

Keywords: Taxation, Real Estate Transfer Tax, Reform, Partisan Politics, Government Ideology, German States

JEL Classification: D720, H200, H710, P160, R380

Suggested Citation

Krause, Manuela and Potrafke, Niklas, The Real Estate Transfer Tax and Government Ideology: Evidence from the German States (May 30, 2017). CESifo Working Paper Series No. 6491, Available at SSRN: https://ssrn.com/abstract=2988957

Manuela Krause

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

Niklas Potrafke (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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