TY - JOUR

T1 - European taxation during the crisis

T2 - Does politics matter?

AU - Lierse, Hanna

PY - 2012/12

Y1 - 2012/12

N2 - With the outbreak of the financial crisis in 2008, European governments extensively intervened to avert a severe economic recession. Taxation is a crucial instrument to achieve such economic objectives, but it also represents a redistributive tool in democratic societies. Generally, left-wing parties are more supportive of progressive taxes and redistribution than right-wing governments. As a crisis response, one could assume that European governments, especially social-democratic ones, reinforced a redistributive stance to compensate for the substantial amounts of public money used to bail out financial institutions. Based on the tax reforms introduced between 2008 and 2010, the paper explores the tax strategies adopted by European governments. The findings do not reveal a direct effect of party politics on taxation but rather show that pressures from the capital markets significantly restrained governments' policy capacities to act.

AB - With the outbreak of the financial crisis in 2008, European governments extensively intervened to avert a severe economic recession. Taxation is a crucial instrument to achieve such economic objectives, but it also represents a redistributive tool in democratic societies. Generally, left-wing parties are more supportive of progressive taxes and redistribution than right-wing governments. As a crisis response, one could assume that European governments, especially social-democratic ones, reinforced a redistributive stance to compensate for the substantial amounts of public money used to bail out financial institutions. Based on the tax reforms introduced between 2008 and 2010, the paper explores the tax strategies adopted by European governments. The findings do not reveal a direct effect of party politics on taxation but rather show that pressures from the capital markets significantly restrained governments' policy capacities to act.

KW - Crisis

KW - European Union

KW - fiscal stress

KW - political parties

KW - tax policy

KW - Sustainability sciences, Management & Economics

UR - http://www.scopus.com/inward/record.url?scp=84868628359&partnerID=8YFLogxK

U2 - 10.1017/S0143814X12000116

DO - 10.1017/S0143814X12000116

M3 - Journal articles

AN - SCOPUS:84868628359

VL - 32

SP - 207

EP - 230

JO - Journal of Public Policy

JF - Journal of Public Policy

SN - 0143-814X

IS - 3

ER -