Ecological Tax Reform in Germany and Interest Groups

In International Review for Environmental Strategies (IRES) Volume 3 Number 1(Summer 2002)
Peer-reviewed Article

This paper examines the political feasibility of an ecological tax reform (ETR). To this end, a positive taxation approach is developed from which the politico-economic determinants of a successfully implemented, ecologically-oriented tax policy may be derived. Public acceptance of the ETR introduced in Germany is then evaluated on the basis of these determinants. By comparing the popularity of the eco-tax on the one hand and the utilisation of eco-tax revenues on the other, it is demonstrated that Germany's ETR creates an "eco-fiscal illusion" in the following sense: while the eco-tax generates stable revenues, which are returned in a way that is approved of by the electorate, it nonetheless has a significant symbolic value with regard to an improvement in environmental quality-a fact which leads to increased popularity among the environmentally conscious sections of the population. Furthermore, the ETR can be interpreted as the result of implicit vote-trading between the coalition parties.

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Alexandra Blanke