France’s government presents a project to introduce several modifications in the fiscal law; a project to be validated by the National Assembly before the symbolic date of July 14.
This article appeared in the Wall Street Journal.
In the past year, Brussels has revealed its near-obsession with fiscal convergence in Europe. As the euro zone’s debt crises roil financial markets, the EU’s leaders have made clear that the only path they see to survival is centralized budgetary (...)
On Wednesday16 March 2011 the EU Commission published a proposal to introduce a Common Consolidated Corporate Tax Base (CCCTB). A few days earlier, on Friday 11 March, the heads of state of the Euro area almost agreed on a « Pact for the Euro » to save the common currency from financial meltdown (...)
The European Commission has recently relaunched the proposal for a common system for calculating the tax base of businesses operating in the EU. According to the officials, the aim is to significantly reduce the administrative burden, compliance costs and legal uncertainties that businesses in (...)
Last year discussions for introduction of the so-called fiscal board in Bulgaria led to a project of the “Financial Stability Pact" prepared by the Ministry of Finance and presented by Simeon Djankov (see here). The pact provides for fiscal rules which cannot be bypassed by a simple majority in (...)
Because the music stopped.
As Thatcher said, “They [socialists] always run out of other people’s money”. Portugal is now a perfect study case for this golden rule, with its quadruple-crisis.
When reflecting on the causes of the current economic and financial crisis, the huge upsurge in private debt is one of the most cited reasons. Some people insist on blaming the private sector for this. According to them, the sustainability of its behavior has been clearly put into question by (...)
As we have reported here in last year’s IREF Yearbook on taxation, the German government that has been newly elected in autumn 2009 did have plans for a comprehensive tax reform. These plans included the introduction of an income tax schedule with stepwise increasing marginal tax rates, and (...)
In 2010 the public deficit in Poland reached at least 7.9% of GDP. The public debt, in turn, balanced around 55% of GDP. In order to rescue public finance, the Polish government announced end of 2010 the dismantling of the reform of pension system. In the opinion of Polish authorities, this (...)
Environmental tax reforms have a history of almost two decades and were viewed as a way to the better world the “double-dividend” theory predicted. Much “political capital” has been invested in policies leading to environmental tax reforms on European and national levels from 1992 (the year of the (...)
The current Socialist (PSOE) government in Spain has claimed in different occasions that the low fiscal pressure that Spain has experienced in 2008 and 2009, gives policy-makers a large leeway to raise taxes. Besides, this measure has been supported as necessary in order to maintain –or improve- (...)
While a resolution of the debt crisis currently facing the eurozone would be most welcome, it is not clear that the current discussion goes much beyond how to bailout member countries, and whether it should be the taxpayers of these countries, the German and French taxpayer or the holders of (...)
After the huge increase of public deficits during the past two years, the French government is claiming the beginning of a new era and promises to limit the budget deficit to 6 GDP points in 2011 (down from 7.7% in 2010). If this 1.7 GDP points reduction of deficit is reached, it will be the (...)
To denounce others to Authorities is unfortunately a frequent behavior that responds to the basest instincts of human beings: the desire for revenge, jealousy, collaboration with the ruling power.
In 2006 a major change was implemented in France regarding the income tax. Not only the top marginal rate was lowered (from 48.09% to 40.00%), but the same treatment was applied to the other rates. Also, the number of brackets was reduced from 7 to 5. As a result, whatever the level of taxable (...)
In Slovakia, the economic growth has been one of the strongest in the EU over the period 2004-2008 and it came with soaring tax revenues. This growth itself was the by-product of several important reforms, especially the tax reform. It was based on real investments, not on speculation on real (...)
Like in most European economies, public debt in Germany is characterized by a secular upward trend. There are reasons to believe that the current trend is not sustainable. The ratio of debt to GDP is expected to reach 76,5 percent this year (Deutsche Bundesbank 2010), which implies a ratio that (...)
In the context of debt crisis in the European Union, the French public debt finally attracts the attention of the government. Is the situation still under control and is there a chance for French authorities to limit the deterioration of public finances? To answer the question, Vesselina (...)
In 2009 Poland was the only country in the European Union (EU) with positive economic growth. This was a result of both good policy and favorable circumstances. In 2010 Poland is no longer the sole “green island” of growth in EU. Furthermore, the state of public finance is a growing risk factor (...)
Romanian government took recently more and more controversial measures. Many of them are officially presented as a consequence of the economic and financial global crisis. Actually, they are the consequence of ill-conceived, poorly-explained and incoherently applied fiscal reforms. We have (...)
„We reform firmly, gradually and effectively” said Poland’s Finance Minister, refuting accusations that his government is postponing important reforms to public finances until after the next parliamentary elections, expected for 2011. And yet these reforms can be summed up in only in one way: they (...)
This report offers a survey of EU energy taxation scheme and provides some insights on the possible outcomes of current EU policy in the energy domain. The authors are reviewing the existing legislation, namely the Council Directive 2003/96/EC and are analyzing the possible economic ground for (...)
Portugal has a long tradition of corporate tax evasion. Perception of high tax burden, social tolerance to fraud and evasion, high psychological fiscal pressure* , instability and insecurity of the tax codes and complex and slow fiscal system are the factors usually pointed as the ultimate (...)
2009/2010 has been a period of phoney fiscalism in the United Kingdom. The period is sandwiched between the economic crisis, which put fiscal policy onto an emergency, macro-economic footing and an election (May 6th 2010). Economic crisis has been marked in the UK as in most other countries by (...)
It’s not unusual to hear people criticise the fiscal competition states engage in, pretending that such practices lead to losses in tax revenues. In this matter, the expression “harmful fiscal competition”, which is notably retained by the European Union, is often used, though sometimes (...)
Looking for budget savings
Some analysts are suspecting that the current fragile economic recovery will be damaged by the policy of government spending cuts that many countries undertook in order to reduce their public budget deficits. The debate is perfervid, in particular in the US where (...)
This paper appeared in The Wall Street Journal.
When the economic crisis struck in 2008, the French government assured its citizens that our social model would protect and cushion us; that we would not be hit nearly as hard as other countries in the downturn.
Two years later, one can hardly (...)
The economic crisis is far from having created only victims. In France and all abroad, government employees didn’t suffer from the recession at all.
The last data from Eurostat are evidencing that during the crisis the share of government payments for salaries became a bigger part of government (...)
Following the last visit to Paris of the German Minister of Finances Wolfgang Schäuble, the French and German governments have decided to harmonize their tax systems. Both sides have emphasised the positive impact that such a harmonization could have on the economic growth in Europe and on the (...)
The French Minister of Economy, Christine Lagarde, recently announced that the government will stimulate the housing market in an attempt to boost the economy. “Building and construction industry is a key sector, with important multiplier effect on the whole economy”, says Lagarde, “Our aim is to (...)
It is summertime and everyone is happy to take a brake from what has been a terribly tormented spring. Many of our European politicians and policy advisers (IMF) feel satisfied—or at least claim to be—that they have done the right thing and kept the boat afloat. Now, they say, we just have to (...)
For getting out of the public finance crisis it is a good thing to cut on spending. To reform the public sector is even better. But is it also necessary to increase taxes? With few others, Jean Philippe Delsol, administrator of IREF, had developed the conviction from past experience that one (...)
Question: Mr. President announces that, starting in 2011, there will be a sharp increase in tax rates. What do you think individuals and businesses will do in 2010? Using basic economics, Arthur Laffer in a Wall Street Journal article dated June 6 gives us a very plausible scenario: Individuals (...)
A few years ago, the so-called Tobin tax, designed to hit financial operations, was called-for by anti-globalization groups such as ATTAC. Today, in Europe, some parties claiming strangely to be liberalist, including heads of State, support the introduction of this new compulsory levy. Of (...)
In the recent past, many States resorted to public spending increases in order to boost their shaky economies. At present, they have to face great deficits. They believed, no doubt, that there is no need to obey to financial constraints, but the market reminded them that any debt has to be (...)
As a long-standing critic of the concept of a single European currency, I have not rejoiced at the current problems in the eurozone that threaten the very survival of the euro. Before discussing the events surrounding the Greek debt crisis further, I must provide at least a working definition (...)
IREF is presenting for the third consecutive year a unique report on taxation in Europe. You can find here expert analysis of the fiscal policy in 22 european countries, the most recent data and forecast for future developments. Summary by Professor Pierre (...)
The disaster everyone feared for several months finally occurred yesterday – Greece’s credit rating was reduced to junk status and financial markets slumped. Moreover, Portugal’s debt has also been downgraded, Spanish stocks plunged more than four percentage points and in Italy it was difficult to (...)
Last week, Eurostat published the statistics on GDP growth for 2009 and it is without surprise that we read in the data a slowing down of economic growth for OECD countries. The average decrease in GDP points for EU countries is -4.2%. But this average is hiding some astonishing (...)
Traditionally in France the rich are suspected to be responsible for every bad thing happening within the economy. The current crisis is no exception to the rule and many voices are heard saying that the rich should pay more taxes to redeem themselves from their sins that brought the (...)
In the Boston Tea Party (Dec. 1773) local patriots dressed as Mohawk Indians and dumped the containers of tea into the harbor. The British parliament had passed the Tea Act to establish officials in major American cities to collect the new tax on tea (Americans had been buying tea from Dutch (...)
Constant attacks on tax havens and hedge funds by some politicians and statesmen is at least inappropriate. As a matter of fact, it is thanks to “speculators” that we have learnt about the pitiful state of public finance in several states (for example in Greece). On the other hand, international (...)
This article appeared in the Wall Street Journal on March 18, 2010
In the wake of his party’s crushing defeat in regional elections, it’s time to take stock of Nicolas Sarkozy’s presidency, three years on. As in the USSR between 1985 and 1991, France has of late experienced a period of (...)
This article appeared in The Wall Street Journal on February 24, 2010
In the 20th century, we often heard the maxim, "the war is the health of the state." In the 21st, fear has become the health of the state. We are encouraged to fear all manner of things—for our finances, for our (...)
If governments continue to pile on more and more debt, when will they reach the tipping point? The Greeks appear to be close to the tipping point, and it is only a matter of time before other European countries, and eventually even the United States, begin their fiscal death spiral. The Greek (...)
There is a growing call by backers of bigger government for Congress to impose a value-added tax (VAT) on top of all the other taxes Americans already pay. A VAT is similar to a national retail sales tax but is collected at every stage of business production until its entire burden ultimately (...)
There has been a rising academic debate on the sustainability of deficit spending and accumulated debt in governments across the globe. This correlates with a growing concern that excessive government deficits and accumulated debt will lead to unstable financial environments and a devalued (...)
In a joint report from the National Research Council and the National Academy of Public Administration, its authors, including AEI’s Joseph Antos, describe the United States’ fiscal outlook, asserting that the present budgetary path is unsustainable. If today’s policies, particularly those (...)
The Obama administration has just proposed a new fee — otherwise known as a tax — on the country’s largest financial institutions. The tax aims to recover the difference between the bailout funds provided to these institutions a year and a half ago and the amounts ultimately returned to the (...)
Despite decades of repeated failure, President Obama and Congress continue to promote the myth that government can spend its way out of recession. Heritage Foundation economic policy expert Brian Riedl dispels the stimulus myth, lays out the evidence that government spending does not end (...)0 | 50 | 100 | 150 | 200 | 250 | 300 | 350 | 400