The effect of direct democracy on the level and structure of local taxes

• Verfasst von: Asatryan, Zareh [VerfasserIn]
• Verfasst von: Baskaran, Thushyanthan [VerfasserIn]
• Verfasst von: Heinemann, Friedrich [VerfasserIn]
• Titel: The effect of direct democracy on the level and structure of local taxes
• Verf.angabe: Zareh Asatryan, Thushyanthan Baskaran, Friedrich Heinemann
• E-Jahr: 2017
• Jahr: 22 April 2017
• Umfang: 18 S.
• Fussnoten: Gesehen am 23.07.2018 ; Available online 22 April 2017
• Titel Quelle: Enthalten in: Regional science and urban economics
• Ort Quelle: [Amsterdam] : Elsevier Science, 1975
• Jahr Quelle: 2017
• Band/Heft Quelle: 65(2017), Seite 38-55
• ISSN Quelle: 1879-2308
• DOI: doi:10.1016/j.regsciurbeco.2017.04.006
• Datenträger: Online-Ressource
• Sprache: eng
• Sach-SW: Bavaria
• Sach-SW: Direct democracy
• Sach-SW: Regression discontinuity
• Sach-SW: Taxation
• K10plus-PPN: 157785814X

Abstract

We study the effect of direct democracy on local taxation. Our setting is the German federal state of Bavaria, where in 1995 a state-wide reform introduced the possibility to initiate direct democratic legislation into the local government code. Relying on a sample of all Bavarian municipalities over 1980-2011, we hypothesize that complementing a representative form of government with the initiative process leads to (i) higher local tax rates and (ii) a shift of the local tax mix from taxes with broader (property taxes) to taxes with narrower bases (business taxes). For identification, we rely on a difference-in-discontinuity design. Our results suggest that the ease with which local initiatives can be implemented - measured by signature and quorum requirements - increases local tax rates and shift the tax mix toward taxes with narrower bases.