What is the current state of public finance in the EU countries? How did the various governments reacted to the crisis which developed in the second half of 2008? To what extent did it trigger a change in tax policy? IREF has asked scholars and experts from fifteen different EU countries to present and evaluate the 2008 tax policies of their respective countries.
Taxation and Justice : A classical Liberal Perspective – Petra Orogvanyiova
From taxation to Justice – Pierre Bessard
Taxation and Justice – Daniel Pellerin
Public Spending and Growth by Patrick Minford and Jiang Wang
L’endettement de l’Etat: stratégie de croissance ou myopie insouciante ? – Pierre Garello, Vesselina Spassova (french and english versions available)
Taxation and Economic Growth: Reconciling Intuition and Theory – Dalibor Rohá?
Taxation, Individual Incentives and Economic Growth – Alex Robson
Introduction by Pierre Garello, Director of the Research Department of IREF
We already knew what the general situation and trends are in the EU. Namely, that the EU- 27 is still the region of the world with the highest fiscal burden, that situations differ greatly among EU member states (with new member countries having lower fiscal burden) and that some trends can be found in the evolution of the tax-mix with, for instance, a weak tendency to replace corporate income tax and labour tax with consumption tax. The reports presented here give life to those statistics. They reveal what were the priorities and constraints of the government in each country?
A new historical database on debt and banking crisis is showing that we might be in a trivial, rather than exceptional economic situation regarding government debt. Kenneth Rogoff and Carmen Reinhart, the authors of the database and the connected study are showing that over the longer sweep of history governments regularly resorted to defaulting or at least restructuring their “uncomfortable” government debt. After the Great Depression, over 40% of the countries did so, and after the 1980-82 recession, 30% of the countries did it.
The American Congressman Ron Paul succeeded to pass an amendment for audit of the Fed in the Financial Services Committee. The amendment is about to be included in major banking reform legislation and its purpose is to allow audit of every item on the Fed’s balance sheet, all credit facilities, security purchase programs etc. “This is a major victory for Federal Reserve transparency and government accountability,” stated Congressman Paul.
The American healthcare system is stigmatized in Europe, and especially in France, where the government is pretending to offer a high quality health services to every French citizen, regardless of his contribution to the social security. But if the French social security system succeed in one task – covering the uninsured, it failed in two others, much more important issues – controlling costs and innovation. A recent study edited by the Cato Institute is evidencing the superiority of the American healthcare system when it comes to innovation in medical treatment.
The UK post office Royal Mail is at least as fervent adept to strikes as the French Poste office. The Unions chose the open clash with the managers, rather than to follow the privatization plan. It is true that the privatization of Royal Mail would compromise a lot of the “traditions” in the company. For example, in the beginning of the decade 10 000 of the 170 000 employees were missing every working day, without any valuable reason. The cost of this absenteeism was 350 mln. of pounds per year.
Without any preliminary consultation with the Parliament, the French President Sarkozy announced a subsidy of 1.65 € billions for the agricultural sector. It is hard to imagine where Sarkozy will find this money, given the current economic context and the quasi bankruptcy of the French government. But it is more interesting to question the utility of this subsidy, which amounts for some 2 750 € per farmer.* It is a considerable amount for the state budget, but a highly insufficient one when it comes to the investment that each farmer can realize with it.