Edited by Gertrude Tumpel-Gugerell and Peter Mooslechner
Chapter 18: Taxation in the European Union – the harmonization issue
18. Taxation in the European Union – the harmonization issue Roger Guesnerie INTRODUCTION Taxation regimes diﬀer across European countries, both in terms of the tax burden (tax rates) and the global structure of tax income. Figure 18.1 shows the dispersion of taxes per capita as a function of GDP per capita. The average level of the tax burden in the EU, as measured by 25 20 15 10 5 0 P UK Taxes per capita DK GDP per capita EU Figure 18.1 Taxes per capita and GDP per capita: a sample of countries and average for Europe 329 330 Taxes and beneﬁts/ﬁscal structures the ratio of government tax receipts to GDP, is 43 per cent. This is high by international standards and reﬂects the comprehensiveness of the public welfare system and the level of social security spending in the wealthier countries. Table 18.1 displays ratios of tax income to the corresponding tax base, speciﬁcally the rate at which labour, capital and consumption are taxed. It shows in particular the high level of the eﬀective labour tax rate, which accounts for 40 per cent of the wage bill, with 70 per cent mainly related to social security contributions (non-wage labour costs). Table 18.1 Eﬀective taxes in Europe Non-wage labour costs Belgium Germany Spain France Ireland Italy Luxemburg Netherlands Austria Portugal Finland EU-11 Denmark Greece Sweden UK EU-15 United States Japan 26.5 31.8 21.9 32.1 12.2 23.1 20.9 28.3 26.2 19.9 23.6 28.1 5.64 22.9 25.4...
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