Local view for "http://purl.org/linkedpolitics/eu/plenary/2007-10-23-Speech-2-014"
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"en.20071023.6.2-014"2
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"Mr President, ladies and gentlemen, the question as to whether the Member States’ taxation policy actually helps to promote growth, employment and innovation at present can unfortunately be answered in very few words: it does not! Growth is simply not promoted by abandoning to free fall the tax rates of highly profitable conglomerates in a Europe-wide dumping race and in return demanding cash increasingly forcefully from average wage earners, the unemployed and pensioners in their capacity as consumers.
Only a fraction of all these calls have unfortunately been retained after the vote in the Committee on Economic and Monetary Affairs. Instead, my report bursts into a song of praise for tax competition in complete ignorance of the fatal consequences of this supposedly healthy tax competition for the revenue side of EU budgets and therefore for the situations in which millions of Europeans also find themselves. Such changes made to the report unfortunately show very clearly whose interests are in fact close to the heart of the majority of members of the Committee on Economic and Monetary Affairs and especially those of the Group of the Alliance of Liberals and Democrats for Europe and the Group of the European People’s Party (Christian Democrats) and European Democrats, because it is very obvious who profits from the prevailing tax regimes in the EU.
We have now once again put forward our most important requests as amendments in plenary. Should they fail to secure a majority there too, my group will vote against the report. Another taxation policy in the EU that minimises the social contrasts instead of constantly reinforcing them – as the present taxation policy does – would indeed be possible and would be demanded as a matter of urgency. This would, however, imply that the prevailing policy in the European Commission and also in the individual Member States does in fact consist of considering the interests of the majority of Europeans according to their guiding principle, instead of serving as they have done to date as executors of the interests of the élite of society. It will simply give rise to even greater parliamentary and extra-parliamentary pressure.
We shall continue to strive precisely against this pressure so that eventually the inexpressible rhetoric of socially intolerable relationships – which characterises most reports and which also now characterises this report on taxation – is no longer capable of winning a majority in this House either.
Growth is not promoted by subjecting income from employment to a tax rate that is several times greater than that applied to income from assets, thereby making the gap between them ever wider. Employment is not promoted when small investing enterprises are taxed disproportionately more than those tinkering speculatively in shares, bonds and financial derivatives. Innovation is certainly not promoted as long as multinationals with gilt-edged balance sheets are able to stash away the best part of research and development funds in their accounts, while those who are actually targeted for this kind of benefit are left out in the rain.
In brief: a socially balanced perspective and development is certainly not being promoted in the EU, but is virtually being stalled while those rolling in money are being treated to more and more tax breaks and fattened up even more while those who already have little are having to dig ever deeper into their pockets. This kind of taxation policy is fatal in terms of economic policy, counterproductive in terms of growth policy and catastrophic in terms of social policy.
I know that the structure of national taxation systems still lies, of course, within the sovereignty of the Member States on paper, but the reality is somewhat different. The lack of EU-wide coordination actually means – even in the direct taxation sector – that national taxation systems are increasingly no longer designed at all on the basis of policy, but are formed and moulded by the ice-cold system of tax competition. This system can involve a simple denominator: the more mobile a factor, the greater its potential for extortion against national fiscal services and the more sweeping the tax relief, of course, which it is able to enforce itself.
If government revenues are not to dry up and run out completely in this process, the sectors not able to escape taxation at all, or only with difficulty, must be taxed even more heavily almost as compensation. Taxes are therefore shifted – from corporate profits to private income, and then from investment income to labour income, which is even less mobile, within income from highly paid employment to less well paid employees, who are also correspondingly less mobile, and generally from income and assets to consumption. The fact that this process is in force – and has been for years and decades – can be very clearly demonstrated by the data on tax receipts and taxation rates in the EU. Not only the legal tax rates but also the actual tax rates on corporate profits in the EU have fallen in the last decade by over 10 percentage points. All the studies carried out on this subject confirm this.
The highest tax rates have been reduced virtually everywhere in the EU Member States. In more and more Member States private investment income is given much greater preference over income from employment because of the transfer to dual tax systems. Excise duty is increasing ever further – on the one hand because of ‘eco-taxes’, which often enough have no ecological steering effect at all even in the absence of alternatives, but which quite frankly fleece budgets, and on the other hand because of the fact that value added taxes are constantly increasing and in more and more countries are approaching the top end of the agreed range.
Such a development is no accident. It is the direct result of unchecked tax competition on a uniform internal market. It should already be leading us to believe that the upward trend of corporate taxes within the EU is broadly eclipsing those in the whole of the OECD. This means that tax rates here have clearly fallen more than in the OECD as a whole.
This also clearly shows that the many pressures of globalisation much and happily complained about are not taking effect here, but that there are home-made pressures created within the EU and therefore also pressures that could very easily be discreetly overcome if there was a desire to do so. Very appropriately my original report included the call not only for a common consolidated corporate tax base, which it does, of course, support, but also for EU-wide minimum tax rates on corporate profits, which should no longer be exceeded by any country thereafter. Only minimum tax rates of this kind actually offer the opportunity to stop the upward trend in corporate taxes somewhere along the way.
My report included the call for stronger EU-wide taxation of assets and financial transactions, the call to relieve labour income explicitly in the lower and middle classes and finally the call to reverse the fatal trend of transferring direct taxes increasingly to indirect taxes and reinstigate the counter-trend."@en1
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