Appendix 2: Taxation in Europe: Towards more competition or more co-ordination ?

Henri Sterdyniak ()

Working Papers from HAL

Abstract: Taxation is high in EU countries. Tax-to-GDP ratios stand at around 40% compared with 25% in Japan and the US. This high level of taxation provides the funding of the European social model characterised by a high level of public expenditure and transfers. Apart from governing powers (armed forces, police, justice), the State provides free services to households (education, health); finances public infrastructures, research, culture; pays significant social transfers (family policy, minimum income) and social insurance (pensions, unemployment). Ageing populations imply higher pensions and health spending; technical progress leads to higher education and research spending; rising social exclusion implies higher assistance benefits. People ask for more public infrastructure and higher security spending. Military spending as well as aid to developing countries seem to be required if countries wish to play a major role internationally. All these elements make the rising trend in public spending difficult to resist. Besides, European countries think that public spending should be on a contributory basis. It makes sense to have people on highest incomes or wealth pay more for collective spending, as they benefit most from the way the social system is organised. Taxes must reduce income inequalities. It is hence crucial for European countries to remain entitled to collect tax revenues, according to democratically agreed rules. Section 2 discusses how the European social model is at risk in a global world; it discusses several strategies for European taxation: competition, unification, coordination. Section 3 provides a descriptive analysis of tax structures and trends in Europe. Section 4 deals with income tax coordination. Section 5 addresses social contributions coordination. Section 6 deals with corporate taxation. Section 7 concludes with a strategy for tax co-ordination.

Date: 2005-10
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-00972884
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Published in 2005

Downloads: (external link)
https://sciencespo.hal.science/hal-00972884/document (application/pdf)

Related works:
Working Paper: Appendix 2: Taxation in Europe: Towards more competition or more co-ordination ? (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-00972884

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().