Democracy, Trust and Taxes: Does Fiscal Equity Matter for Civic Engagement?

Abstract

The study analyses the relationship between objective tax fairness and civic engagement in the EU Member States. Using the turnout rate in the 2024 European Parliament elections as an indicator of civic spirit and constructing a composite indicator of objective tax fairness (tax burden, indirect tax share and VAT Gap), the research estimated simple and multiple regressions. The results show that a higher tax burden is associated with higher levels of electoral participation, while a higher share of indirect taxes in GDP has a negative effect on civic engagement. The VAT Gap does not significantly influence participation. The conclusions underline the importance of the structure of the tax system in strengthening social cohesion and suggest that a system perceived as fairer stimulates citizens’ participation in democratic life.

Keywords

• fiscal equity
• civic engagement
• democracy
• taxes
• european parliament election