Online Articles

This article is from our mini-series looking at modern fiscal issues surrounding items listed in the famous 18th century English carol “Twelve Days of Christmas”. We believe that if the…

To replace the original sacrifice of two turtle doves, the biggest European authority in the Middle Ages, the Catholic Church, dictated what people should eat. EU governments continue doing the same, by fiscal means. However, this fiscal policy is full of paradoxes. Governments tax consumption of “bad” food, while also subsidising its production at the same time.

A partridge in a pear tree, the famous gift of the first day of Christmas, is at the centre of an EU fiscal paradox: European taxpayers are paying for extensive programmes to protect the habitat of the dwindling species. At the same time, they are fiscally forced to help to destroy partridge’s habitat through subsidised conversions into farmland and suburban development.

New ECJ ruling confirms that member states can currently deprive non-residents of welfare payments. Yet, it has been popularly portrayed as a new tool to protect the spiralling costs of EU welfare states. We show that on the contrary, costs may rise, both in the short and long run, and the ruling makes welfare states even more entrenched. Meanwhile, the dominant part of “international welfare tourism” continues since the largest claimants are those with jobs, and the ruling only reinforces this trend.

Free movement of people, capital, goods and services across national borders. Those are, allegedly, the pillars of European integration. One of them, the free movement of capital, crossed swords twice…

“In order to prevent tax fraud, income tax withholding should be increased so that governments over-withhold and most taxpayers receive a refund.” This is the policy prescription in a new research about to be published. We argue that this conclusion is wrong. The authors have not proven the link between tax withholding and tax fraud, and even if, increased tax withholding creates more serious problems that would wipe out any anti-fraud benefits. Tax policy should not rely on fooling people.

Every month, the EU Commision starts dozens of legal actions against Member States for non-compliance with EU law. We evaluate the November crop of fiscally-related cases. While 2 such actions are generally a good idea, 4 are a bad idea, reducing EU citizens’ opportunities for an efficient and transparent government.

According to several reports, EU Commission President Jean-Claude Juncker is planning to introduce a 300 billion-euro investment package this Wednesday (November 26th). The idea is to establish a European fund that will assume liability risks on behalf of private investors. Only profitable projects would be eligible for the guarantee; the profitability of individual projects is to be pre-determined by EU bureaucrats. This presupposes too much of President Juncker and his team. They purport to possess knowledge that they cannot possibly have. Unprofitable investment projects do not become socially profitable just by being financed by the state. When the bureaucracy starts acting like a bank, it transfers risks from real banks onto ordinary citizens. Once again.

Tax cuts are pretty rare in the real world. When they do happen, they tend to be very partial, offering unjust advantages to a specific group. But even broader tax cuts can paradoxically do much harm. Using Italy as an example, this piece argues that when tax cuts lead to greater debt, they may ultimately curtail rather than enhance liberty – and long run economic growth?

How do you pay for increased government spending on education, health care and social services? By lowering the tax rate, of course… Wait, what?! Oh indeed. A new report on Swedish fiscal developments over the last dozen or so years shows what’s possible to achieve when a country tries to shake off the reputation for Europe’s highest taxes.