Contenu du sommaire : What future for taxation in the EU?

The struggle over the FTT has developed in three phases. In the first phase (2009 to 2011) the supporters of the tax went on the offensive, supported by the “shock effects” of the financial crisis. This phase ended with the (preliminary) “victory” in the form of the FTT proposal of the European Commission (EC) in September 2011. The second phase was shaped by the search for ways how to implement the FTT within the EU. It ended with the publication of a modified FTT proposal by the EC in February 2013 as basis for the implementation in 11 Member States. The last phase has been marked by a strong counter-offensive of the financial lobby which succeeded in playing off FTT supporting countries against each other, in particular Germany and France. This phase ended with a defeat of the FTT supporters. Not even in a group of EU Member States will a general FTT be implemented in the foreseeable future.
The struggle over the FTT was mainly carried out in two “battlefields”, the intellectual disputes between economists at universities, research institutes and international organizations, and the political controversies between NGOs, political parties, governments and pressure groups, in particular the finance industry.

The current academic and political debate about the quality of tax systems does not systematically take into account aspects of sustainability. For some time now, OECD, International Monetary Fund and European Commission have been pushing the case for enhancing the growth-friendliness of tax systems. Ecological and social/equity considerations appear to have lower priority in the hierarchical order of objectives guiding the recommendations for the design of tax systems. The European Commission and the OECD regularly publish an increasing number of indicators and the underlying data that can be used to assess different sustainability dimensions of tax systems and/or individual tax categories also in a cross-country comparison and over time. In particular, the European Commission has developed a set of indicators trying to capture the contribution of member states' tax systems to the goals of the Europe 2020 strategy. This set of indicators, however, focuses on the growth-friendliness of member states' tax systems, while indicators for their distributional and environmental impact play a less prominent role. The paper attempts at establishing a conceptual basis for the development of a consistent set of indicators to capture the sustainability impact of tax systems. Firstly, we formulate fundamental objectives underlying a sustainable tax system. Then we present some fundamental deliberations about the function of indicators and a classification of indicators which may be useful to assess the sustainability impact of tax systems. Against this background, we critically review the European Commission's indicator-based approach to evaluate EU member states' tax systems within the European Semester. Finally, we address open questions and next research steps.

The trend of increasing inequality in the distribution of income and wealth in most developed countries has led to calls for corrective tax increases for the rich and wealthy. Such calls are often confronted with the claim that higher taxes on top personal incomes, corporate income and wealth are detrimental to growth and employment and/or will foster tax avoidance. This paper argues that even the dominating theoretical framework leaves substantial leeway for redistributive taxation. Furthermore, from a Keynesian macroeconomic perspective redistribution may even be systematically conducive to growth and employment. At the same time a change towards such a policy of redistribution may for some economies, particularly the German one, well be the prerequisite for compliance with the European Fiscal Compact if an increase of the macroeconomic imbalances that have come to be seen as a root cause of the global financial and economic crisis 2008/2009 and also the euro crisis by many observers is to be avoided. Therefore, besides attempts at international tax coordination and harmonisation, national tax policies should actively use their room of manœuvre for progressive taxation to correct the disparities in the income distribution and at the same time to increase the fiscal space.

The need for a great tax reform is often debated in France, although the content and objectives of such a reform are never clearly specified. There is no unanimity on how the tax reform should be designed, some advocating that the reform should aim at cutting taxation (which implies further public spending cuts) while according to some others the tax system become more progressive. The French tax-to-GDP ratio is 46%, and primary public expenditure amount to 50% of potential GDP. This high level of public spending reflects a choice of society, which should be maintained. The French tax system is already very progressive, similar taxation applies to capital and labour incomes. France is one the very few countries where inequalities have not risen in the recent past.
The paper addresses, for each category of tax, the reforms which could be introduced, and discusses whether they would be appropriate. In particular, the paper shows that replacing employers' social contributions by VAT would be useless. It is desirable but difficult to raise environmental taxation; French taxation should remain family-based, merging the income tax with the CSG is not desirable. Tax expenditures should be reconsidered, especially as concerns companies' and households' tax optimization schemes. Merging PPE and RSA is not obvious. A competitiveness shock (i.e. strong cuts in employers' social contributions and corporate taxation financed by a rise in CSG) should be implemented only in a European context.

We present a quantitative analysis of Italian fiscal and structural reforms using the Prometeia Dynamic Stochastic General Equilibrium (DSGE) model to identify the optimal reform mix to boost growth and employment. We find that structural reforms via a reduction in price and wage markups and a labour tax wedge cut can provide a strong stimulus to the economy by increasing GDP and employment levels. The balanced budget constraint shows that to offset the decreased revenue due to the labour wedge cut, a reduction in public lump-sum transfers or a tax shift from labour to consumption or property is preferred over a cut in public spending on goods and services. Conversely, under simultaneous fiscal and structural reforms, the best payoff would be obtained from an expansion to public spending. Finally, we find that public investment works to magnify this effect in the long run.

This paper evaluates the impact of the taxation system on production factor costs, investment and economic activity. This is performed on the basis of detailed analysis of the Italian tax system and the production of own estimates of the user cost of capital to labour, which capture the contribution of tax rates, tax incentives and other underlying factors. The study identifies the link between user cost and investment in the context of a full econometric model of investment demand determinants that includes aggregate demand, expectations and uncertainty. Finally, the study evaluates the past contribution of taxation to investment and economic activity, and assesses the impact of future tax reform proposals.