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Licensed Unlicensed Requires Authentication Published by De Gruyter Oldenbourg July 6, 2017

EU Taxes for the EU Budget in the Light of Sustainability Orientation – a Survey

Margit Schratzenstaller, Alexander Krenek, Danuše Nerudová and Marian Dobranschi

Abstract

EU taxes play a key role in political and economic discussions about the future of the EU own resource system, and their desirability can vary accordingly. It is therefore essential to clearly articulate the goals which are to be achieved by the introduction of this new financing tool. This paper provides a critical review of pros and cons of EU taxes put forward in the literature. Reviewing the conventional fiscal federalism and political economy literature on this topic it can be concluded that there is no convincing (overall) case for funding the EU budget with EU taxes rather than with contributions by Member States which currently make up for the lion’s share of EU own resources. There are, however, some specific issues arising from a sustainability perspective, which could be addressed with the introduction of EU taxes. Departing from a comprehensive concept of sustainability which is based on the economic, the social, the environmental and the cultural/institutional pillar of sustainability, the paper identifies existing sustainability gaps in taxation in the EU. EU taxes if designed accordingly may be suitable instruments to reduce these sustainability gaps and thus to strengthen sustainability-orientation of taxation in the EU.

JEL Classification: F55; H11; H23; H87; Q58

Funding statement: The research leading to these results has received funding from the European Union’s Horizon 2020 research and innovation programme 2014-2020, grant agreement No. FairTax 649439.

Acknowledgements

We are grateful to Asa Gunnarsson, Lubor Lacina, Mikulas Luptacik and Hans Pitlik, to the participants of the 2016 ZEW Public Finance Conference on April 25 and 26, 2016, in Mannheim, of the Joint Annual Meeting of the Slovak Economic Association and the Austrian Economic Association (NOeG-SEA 2016) on May 27 and 28, 2016, in Bratislava, and of the conference “Economics, Economic Policies and Sustainable Growth in the Wake of the Crisis” on September 8 to 10, 2016, in Ancona, as well as to Thiess Büttner and Friedrich Heinemann and to an anonymous reviewer for valuable comments and suggestions. We also thank Andrea Sutrich for careful research assistance.

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Article note

This article is part of the special issue “Fiscal Equalization in Europe” published in the Journal of Economics and Statistics. Access to further articles of this special issue can be obtained at https://www.degruyter.com/view/j/jbnst.2017.237.issue-3/issue-files/jbnst.2017.237.issue-3.xml.



Code and Datasets

The author(s) published code and data associated with this article in the ZBW Journal Data Archive, a storage platform for datasets. See: https://doi.org/10.15456/jbnst.2017188.121323.


Published Online: 2017-07-06
Published in Print: 2017-09-26

© 2017 Oldenbourg Wissenschaftsverlag GmbH, Published by De Gruyter Oldenbourg, Berlin/Boston