That is why, for many years now, in Brussels, our technocrats have been fighting to obtain from our European partners what they call tax « harmonization. » That is to say an alignment — obviously from the top rather than the bottom — of the taxes in all the member countries to be imposed on companies, in particular the corporate tax.
This nagging French demand is also echoed in many other countries, who would like, at a minimum, to see their fiscal resources stabilized. However, since such a decision should be taken unanimously, by the 28 members of the Union, it has no chance at all, unless it were to go in the opposite direction to approximate the rate applied by Ireland, which is 12.5%, compared with an average rate of an astonishing 38% in France for medium and large companies.
Needless to say, that form of harmonization is not one that would be in the interests of the French tax bureaucrats head-quartered at the Quai de Bercy on the Seine in Paris. So it has no chance of materializing, at least not in the immediate future.
In the longer term, it is less of a sure bet. For the European bureaucracy has the means to blackmail and retaliate against states that they consider recalcitrant to its standards. This we saw in the case of the bank account anonymity case: even Switzerland — a non-EU country albeit with many ties thereto — had to fold and give up its anonymous bank account system. This, by the way, will eventually lead to an automatic exchange of data on a global scale, placing the holder of the smallest bank account on the planet under the supervision of the global taxation big brother.…
We must therefore remain cautious and on our guard. And thus, we must be ready to challenge, on ideological grounds, the very notion of fiscal harmonization that imperils the fundamental freedom to come and go.
It will be countered that this applies only to companies, and then only to the largest ones. That is true. For the moment…
It will be countered that individuals are not concerned. That’s incorrect. Alongside the harmonization of the corporate tax, another project has long lingered on the table of the Brussels Commission: the harmonization of the VAT, the fraud of which would costs the European nations some 160 billion euros each year.
National unity, and European unity, for that matter, does not require tax harmonization. The differences in taxation within the United States, from one state to another, amply illustrates this truth.
On the other hand, the very freedom of individuals depends on competition. Including in the tax sector.
Alain Dumait, co founder of Contribuables Associés