Local view for "http://purl.org/linkedpolitics/eu/plenary/2000-12-13-Speech-3-181"
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"en.20001213.7.3-181"2
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"Mr President, this discussion gives me the opportunity to sum up my own position on the issue of taxation.
I would call for uniform taxation at source. This could be allocated as a direct resource to the Community budget. National contributions to the European Union’s budget should be reduced by the same amount. A procedure like that would eliminate the need for the European bureaucratic information exchange system thought up in Feira. There is also a danger of the latter system leading to the complete renationalisation of European taxation, because each State will be able, in 2010, to establish its national tax as it sees fit. Other States will simply be induced to supply the information needed for the purposes of national taxation.
As far as I am concerned, Feira does not constitute progress but, rather, a setback when it comes to necessary tax coordination in Europe.
The right to levy taxes and other charges is one of the foundations of any organised society. Without taxes, there is no State. It is no surprise that the Nice Summit has confirmed the principle of unanimity where all decisions about tax are concerned.
The Edinburgh Summit had limited contributions to the Community budget to 1.27% of European gross domestic product. The European Union’s budget for next year will be closer to 1% than to this upper limit. That is very little indeed.
All States redistribute at least 30%, often 40% and occasionally more than 50% of their national wealth created during the year. No one can define the optimum level of compulsory levies.
Liberals tell us that as little State involvement as possible is required. The United States are cited as an example of a country which adopts this policy. The US Federal budget redistributes only a third of American GDP. In Europe, compulsory levies include large transfers to finance pensions and health care. In the United States, however, social protection is largely the province of the private sector. Free-market health care therefore costs the Americans the equivalent of 14% of their GDP, compared with 8 to 9% in European countries. Ought not these health care costs in the United States to be added on if tax levels on each side of the Atlantic are to be compared?
Whatever the answer, the point of this digression is to note that solidarity organised via the American budget is thirty times greater than that organised via the Community budget. Unless there is broad Community solidarity of a kind which is only possible on the basis of a federal structure that is unlikely to exist in the foreseeable future, the individual States of the European Union will be forced to retain control of their taxation.
In acknowledging this state of affairs, the European Union will nonetheless have to, and be able to, fulfil its duty to coordinate taxation in Europe. Coordinating and harmonising are not the same as standardising. Fiscal competition is in the interests of the people and of the economy. The United States and the Swiss Confederation have internal markets in which tax varies greatly between one state, or canton, and another. American local sales tax
may vary between zero and ten points, although the difference between neighbouring states is generally no more than five points. This clearly demonstrates that Europe has no need of uniform VAT rates. Minimum rates, and possibly a maximum rate, are needed, but the States need to be allowed room for manoeuvre to enable them to pursue their own microeconomic policies. Obviously, any unfair tax competition needs to be combated, especially when it comes to business tax matters.
The Primarolo group has devised simple rules which must be applied. Money laundering must be combated, as must organised crime and tax fraud. That is already happening, even in States which practice banking secrecy.
I am therefore in favour of common rules and minimum tax thresholds. Levying tax at source on savings products is acceptable, on condition that they are reasonable and levied at source. Many Europeans have difficulty accepting tax on savings because they feel they are being taxed twice over. Those who spend their income pay VAT. Those who save the yield from their income which has already been taxed ought, on Ecofin’s reasoning, to be subject to a levy at source and will, in addition, be taxed on an assessment basis."@en1
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