Local view for "http://purl.org/linkedpolitics/eu/plenary/2005-12-12-Speech-1-145"
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"en.20051212.18.1-145"2
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".
Mr President, ladies and gentlemen, I see the arrival, as a topic on our order of business, of the topic of the Europe-wide harmonisation of business taxation. The co-existence side by side within the EU, of 25 different tax systems, with marked differences not only in terms of the tax rates levied, but also of the manner in which profit is calculated, has, over the past ten years, led to one result above all others, in that the share of business tax in the funding of public budgets is on the way down, and a growing proportion of the tax burden is placed on the person who earns ordinary wages for working for someone else, or on the consumer, the latter of which is the worst possible solution in terms of its impact on society and on economic growth. It is in this way that big multinationals in particular are given every opportunity to minimise their tax burden. Transfer pricing and the shifting of losses are just two of their favourite ways of making sure that profits appear in the accounts at the precise place where the taxman is least inclined to stick his hand in.
Quite apart from this sort of fiscal dumping, the co-existence of tax systems has prompted a competitive approach to cutting tax rates. The average corporation tax rate, for example, fell by a total of 15 percentage points across the old EU from the end of the 1980s onwards. One demonstration of the fact that these cuts are not by any means nominal is to be found in a long-term study by the University of Mannheim, according to which the amount of tax effectively paid by the 50 biggest European conglomerates fell from 36% in 1988 to a mere 31% in 2000, which means that billions of euros in public revenue have been given away and wasted. Bizarrely enough, the European leader of the tax dumping pack – particularly where company taxes are concerned – is neither an Eastern European state nor Ireland, but the Federal Republic of Germany, supposedly a high-tax country, where a tax reform forced through by the former Schröder Government – which justified its action by reference to fiscal competition across Europe – brought corporation tax yield to an utter standstill. Only the harmonisation of taxes across Europe can put a stop to this lunacy, which sees companies making enormous profits while taking less and less of a part in funding the community as a whole and people on average and low incomes – and, via taxes on consumption, even pensioners and the unemployed – ending up having to make good the shortfall.
I do not, however, believe that it is enough to harmonise the tax base. What we need, as a matter of urgency, is a Europe-wide minimum tax rate for company profits of at least 40%, and on a broad tax base. Tax dumping is omnipresent, and this is the only way to stop it in its tracks."@en1
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