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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 the recent events. But, what lies behind this exorbitant private indebtedness? This article is focusing on the Spanish case, with some references to the United States.

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 possibly only three rates of 10, 25 and 35 percent. There had already been some doubts last year that a majority for such an ambitious reform could be organized. And indeed, the conservative-liberal federal government was characterized by almost complete fiscal policy inertia in its first months.

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 system (and especially its obligatory private component) is one of the major causes of the budget gap. This interpretation and the reform proposal, shifting majority of contributions currently allocated to fully funded private pension scheme (the second pillar to public pay-as-you-go long run, divide the Polish society and especially economists. The strongest and the most constructive opposition is led by prof. Leszek Balcerowicz – father of market economy in Poland.

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 first EU-wide energy and carbon tax proposal) till today. In this report, the authors compare shares of environmental taxes on GDP and overall tax revenues in the EU from 1995 till 2010 to identify the real impact of such efforts.

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- the current government-run social safety net and the level of public infrastructures. Angel Martin explains why raising taxes in Spain is not a really good idea.

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 the debts of these countries, mainly German and French banks. Even if it is decided which solution to take, the underlying problem that caused the crisis in the first place remains. This is the one-size-fits-all eurozone monetary policy.

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 first time in 50 years that such an effort to restrict public spending ends with success. But will the government reached the target this time?

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…

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 estate markets or inflated construction sector. After the 2008 crisis, the relatively low Slovak debt of 35.4% GDP does not attract as much attention as countries around the Mediterranean Sea or Ireland.