View Full Version : How far should harmonisation go ?

04-06-07, 10:04
The EU's main principle is "unity in diversity". The Union is a multicultural, multilinguistic entity, and contrarily to the USA these cultural divisions match a particular territory, each with its own history, and sometimes even ethnicity.

As much as I am a partisan of "always more integration" when it comes to the euro, having a EU foreign minister, a common army, or a common constitution, I doubt that such things as tax rates should be harmonised. Just look at the USA. They have a common federal government, a single currency, a single foreign policy, and a much reverred constitution, but that does not prevent each state from having their own tax rates. The sales tax in the States (the equivalent of the European VAT) varies from 0% to 14.5% (for lodging in the District of Columbia) depending on the states and goods/services. Likewise, income taxes and corporate taxes also vary widely from state to state.

Yet, harmonising taxes is on the agenda of the current summit of EU Finance Ministers today and tomorrow. I think it is healthy to have different taxation levels, so that Europeans can choose where to live or work in function of their needs and lifestyle. For instance, sometimes who doesn't care that much about social benefits would prefer to move to a state with lower taxation, like Ireland. In fact it is ironic to see that in a small country like Belgium, regions are already fighting to have different tax levels.