This article originally appeared on Values4Europe.com on January 9, 2019. Anders Ydstedt is an advisor at Scantech Strategy Advisors to major Swedish industry and business organizations.
When most of us where occupied preparing to celebrate Christmas, the European Commission launched a web questionnaire on the initiative to move to a qualified majority voting on tax issues. This has been done without almost no media coverage. On January 15, the Commission will present the consultation. It is important for friends of liberty and lower taxes to react against this initiative.
This is a bold move from the commission that might totally change the way the EU is working. Today every member state has veto rights against tax proposals. Recently a proposal to introduce a new tax on digital services (DST) was blocked by several smaller countries like Ireland, Sweden and Denmark. Perhaps disappointed by this setback the EU commission is now trying to change how tax proposals are treated. One might suspect that the EU commission hopes to solve its long time goal – to introduce new taxes funding the commission.
There are at least three important reasons why this proposal is dangerous and must be stopped:
A qualified majority voting on tax issues will give the power to a few large countries with similar interests and objectives. They will be able to push for tax issues that can really hurt the interests of a minority group of member states. Especially when the UK has left the EU, the balance of power will shift in favour of the big countries. This current initiative would mean a further imbalance the position of big and small countries. The legitimacy of the EU will be hurt.
Tax sovereignty is an important part of institutional competition in the EU. It helps to create an attractive business climate and attract investments. Especially, for those countries that are relatively small and don’t have a big consumer market, taxation is a tool to improve their relative position. With majority voting bigger countries can impose new and higher taxes, introduce minimum levels and pave the way for tax harmonisation.
Sovereignty in the field of taxation is necessary for countries to implement national financial and social-economic policies. Sovereignty in the field of taxation is already limited by European law, EMU-rules, directives, code of conduct and state aid law. For countries with a common currency and a limited common budget, it is important to be able to pursue an active national fiscal policy when an external shock is encountered.
Friends of liberty have to do everything needed to stop this proposal. If tax issues are decided by a qualified majority in Brussels we will most certainly see a stream of new taxes hurting european citizens, businesses and eventually the global competitiveness of the EU.
Please take part in this discussion, write your own response to the commission on their website but most important, raise your voice and talk to your politicians.
Here is the web questionnaire mentioned above and on January 15 the European Commission will present the consultation on qualified majority voting on tax issues.