Social Security and Taxation of Labour Subject to Subsidiarity and Freedom of Movement

Wolfram Richter

No 490, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In Europe, the competence for social security and the right to levy income tax lie with the country of employment in cross-border matters. This has two disadvantages. First, the Employment Principle distorts active persons' choice of place of work. Second, the employment-based regulation of state competencies cannot be applied to non-active persons. The Treaty of Maastricht, however, confers the right of free movement to all citizens of the Union. Against this background, this paper pleads for a reform in European policy coordination. The Employment Principle should be replaced with the Principle of Delayed Integration where cross-border matters are concerned.

Keywords: free movement; Social security and taxation of mobile labour; Delayed Integration; Employment Principle; Origin Principle (search for similar items in EconPapers)
JEL-codes: H21 H70 J61 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2002-05
New Economics Papers: this item is included in nep-pbe and nep-pub
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Citations: View citations in EconPapers (12)

Published - published in: Swedish Economic Policy Review, 2002 (9), 47-74

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