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An EU Tax Indeed!

, by Stéphane du Boispéan, translated by Lina Ohltmann

All the versions of this article: [Deutsch] [English] [français]

EU Finance Commissioner Janusz Lewandowski’s suggestion to introduce a direct EU tax is neither new nor complicated. Still, his ideas are controversial and have triggered many reactions.

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How it Works Today

Just like a states’ budget, the EU budget is annually submitted by the Commission and accepted or dismissed by the Council as well as the European Parliament. Expenses are integrated in a 7 year plan that is negotiated by the finance ministers (the current budget covers 2007-2013). Revenues are made up of payments by all member states. The EU’s own revenues, such as tariffs from third countries, play only a small role. This means that the budget is very much dependent on national interests and that the European Union has only limited possibilities to decide where its priorities are. Thatcher’s famous saying “I want my money back” illustrates this best. Therefore it is important that the EU has financial autonomy – and through this the opportunity to make its own political decisions on revenues and expenses.

Should I Pay More in Taxes?

It was foreseeable that the plan to introduce a EU tax or to Europeanise taxes would trigger harsh reactions. It was also not surprising to see populist statements in the tabloid media arguing the taxpayer would have to pay something “extra”. Here we have to point out: The Commission is not committed to introducing this tax reform by either creating a new tax or by shifting competences. Lewandowski could imagine creating the planned transaction tax directly on the EU and not the national level. In the same way he would support to shift competences on the already existent CO2 tax on the European level. Fact is: More taxes will have to be paid in any case as majorities of governments support it. The more symbolic question is another: Who will receive the gains?

The Hypocrisy of National Governments

It is not surprising that our national governments do not support it any longer. Who would support loosing competences? Neither Merkel nor Sarkozy do. Those who used to support a transaction tax are now against this – the proposal came from Brussels. Here we have to acknowledge the fact that even the Council had demanded such tax and now it is dismissed by a majority of the same governments.

EU citizens would be closer to European politics. It is necessary therefore, for the EU to have its own resources to become independent from national interests

EU Taxes are Necessary and Welcome!

Whether shifting existing revenues creates the EU tax or the planned introduction of new taxes. It is a political issue that has to be discussed in the European Parliament by the political parties that we have voted for. After all, it is a classic debate in a democracy to decide where the money for the institutions comes from and where it goes. This could lead to an essential politicisation of European politics. Through that, EU citizens would be closer to European politics. Therefore it is necessary for the EU to have its own resources to become independent from national interests. Greece’s debt crisis showed: The political institution of the national state has failed.

This does not mean that the taxpayer will have to pay more in the future. The representatives in the European Parliament will make that decision for the citizens. On that note: Don’t forget to vote in the next European elections!

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P.S.

Image: Janusz Lewandowski.

Source: European Parliament.

The author wishes to thank Miriam Schriefers.

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