Single Market and Tax Co-operation

Anonymous1987

With France now following the UK in imposing a tax on bank bonuses surely this is prime opportunity for the EU to step in and agree an EU wide tax on bank bonuses. Personally I'm more in favour of a required % of bonuses in the form of equity however it seems time and time again the EU is bypassed when it provides an ideal opportunity to co-operate in the single market.

When the financial crisis hit most European countries decided to offer their own stimulus packages when an EU stimulus might have proved more effective and efficient. What are peoples thoughts on this and why do countries bypass the EU. IMO the individual nations want to take the opportunity to prop industries that they feel are of strategic importance to their nation which might not be of the same importance to the EU-wide economy.

Scofflaw

Anonymous1987 wrote: »

With France now following the UK in imposing a tax on bank bonuses surely this is prime opportunity for the EU to step in and agree an EU wide tax on bank bonuses. Personally I'm more in favour of a required % of bonuses in the form of equity however it seems time and time again the EU is bypassed when it provides an ideal opportunity to co-operate in the single market.

When the financial crisis hit most European countries decided to offer their own stimulus packages when an EU stimulus might have proved more effective and efficient. What are peoples thoughts on this and why do countries bypass the EU. IMO the individual nations want to take the opportunity to prop industries that they feel are of strategic importance to their nation which might not be of the same importance to the EU-wide economy.

The EU doesn't have the taxation powers it would take to impose such a tax - the only way any such tax could be applied across the EU is for every member state to do it individually. As to the stimulus packages - it's hard to imagine a national government that would pass up the opportunity to be seen to be stimulating their national economy in favour of letting the EU take the credit.

cordially,
Scofflaw

rumour

Scofflaw wrote: »

The Eu doesn't have the taxation powers it would take to impose such a tax - the only way any such tax could be applied across the EU is for every member state to do it individually. As to the stimulus packages - it's hard to imagine a national government that would pass up the opportunity to be seen to be stimulating their national economy in favour of letting the EU take the credit.

cordially,
Scofflaw

Does it not have powers to introduce a carbon tax?

Scofflaw

rumour wrote: »

Does it not have powers to introduce a carbon tax?

No, the EU can't introduce taxes at all - but I appreciate where the confusion comes in. A tax - such as a carbon tax - can be introduced at the European level, which means that the vehicle for the agreement would be the EU. However, what would actually be happening is that the member states would be agreeing two things:

1. that they would all use their national tax-raising powers to raise a carbon tax

2. that they would agree the details of that carbon tax together at a European level, rather than individually.

So the EU would be the mechanism through which the states agreed the details of how to use their national taxation powers - the EU itself does not have the taxation power. It's also possible that the idea of such a tax could be put forward by the EU Commission or Parliament, but that doesn't change the picture - the member states are not in any sense obliged to follow through on such a suggestion.

In that sense, you can think of it as being a multilateral tax treaty, which, in the absence of the EU, would require some joint body to be set up - but they already have the EU, which is a permanent multi-purpose joint body, so it makes more sense to use the EU rather than setting up another body.

In essence - EU: no taxation powers, but convenient multilateral framework and joint bureaucracy for implementing a tax unanimously agreed by the member states.

Hope that clarifies the issue a little.

cordially,
Scofflaw

rumour

Scofflaw wrote: »

No, the EU can't introduce taxes at all - but I appreciate where the confusion comes in. A tax - such as a carbon tax - can be introduced at the European level, which means that the vehicle for the agreement would be the EU. However, what would actually be happening is that the member states would be agreeing two things:

1. that they would all use their national tax-raising powers to raise a carbon tax

2. that they would agree the details of that carbon tax together at a European level, rather than individually.

So the EU would be the mechanism through which the states agreed the details of how to use their national taxation powers - the EU itself does not have the taxation power. It's also possible that the idea of such a tax could be put forward by the EU Commission or Parliament, but that doesn't change the picture - the member states are not in any sense obliged to follow through on such a suggestion.

In that sense, you can think of it as being a multilateral tax treaty, which, in the absence of the EU, would require some joint body to be set up - but they already have the EU, which is a permanent multi-purpose joint body, so it makes more sense to use the EU rather than setting up another body.

In essence - EU: no taxation powers, but convenient multilateral framework and joint bureaucracy for implementing a tax unanimously agreed by the member states.

Hope that clarifies the issue a little.

cordially,
Scofflaw

Excuse me but that sounds decidedly like a mandate for the EU to impose a tax. Who ultimately has the responsibility of enforcing this tax?

For example is there a fine if it is not enforced.

Anonymous1987

Scofflaw wrote: »

No, the EU can't introduce taxes at all - but I appreciate where the confusion comes in. A tax - such as a carbon tax - can be introduced at the European level, which means that the vehicle for the agreement would be the EU. However, what would actually be happening is that the member states would be agreeing two things:

1. that they would all use their national tax-raising powers to raise a carbon tax

2. that they would agree the details of that carbon tax together at a European level, rather than individually.

So the EU would be the mechanism through which the states agreed the details of how to use their national taxation powers - the EU itself does not have the taxation power. It's also possible that the idea of such a tax could be put forward by the EU Commission or Parliament, but that doesn't change the picture - the member states are not in any sense obliged to follow through on such a suggestion.

In that sense, you can think of it as being a multilateral tax treaty, which, in the absence of the EU, would require some joint body to be set up - but they already have the EU, which is a permanent multi-purpose joint body, so it makes more sense to use the EU rather than setting up another body.

In essence - EU: no taxation powers, but convenient multilateral framework and joint bureaucracy for implementing a tax unanimously agreed by the member states.

Hope that clarifies the issue a little.

cordially,
Scofflaw

That's kinda my point if every country is doing the same thing then why don't they use the EU to co-operate? My only explanation is that most EU countries including Ireland fear a truly single European market.

Scofflaw

rumour wrote: »

Excuse me but that sounds decidedly like a mandate for the EU to impose a tax. Who ultimately has the responsibility of enforcing this tax?

For example is there a fine if it is not enforced.

In Ireland, the tax would be applied by the Revenue, and subject to the usual penalties.

To make the point again, Europe-wide taxes can only come into being if all the European countries agree to bring in such a tax jointly.

Say the UK and Ireland agreed that they would both impose a silliness tax of 5% on whoopee cushions and Halloween masks. They set up a Joint Anglo-Irish Silliness Tax Bureau (JAISTB) to thrash out the details, monitor implementation, and ensure that the implementation doesn't unduly favour either side. Now, that's obviously a British and Irish tax - no confusion there.

Now, say Holland and Spain think this is a good idea, and decide to implement it too. Dutch and Spanish working groups are added to the JAISTB, which is rechristened the International Silliness Tax Organisation (ISTO). This is still obviously a multilateral tax monitoring body.

Further countries join, until eventually there are 27 countries on board, all implementing the same silliness tax through ISTO. It's pretty clear, I hope, that ISTO is not "imposing" the silliness tax - it's obviously just the body charged with carrying out the wishes of the countries involved.

In the real world, though, there's no need to create an organisation like ISTO, because there's a ready-made bureaucracy to hand in the form of the EU. So the 27 countries that agree the silliness tax would simply implement it through the EU instead of setting up another multilateral body like ISTO.

However, just as our imaginary ISTO wasn't "imposing" the tax, neither is the EU - the EU is simply the body through which the tax is most conveniently implemented. Those imposing the tax are the countries. The EU is just the body charged with carrying out the wishes of the countries involved.

Just to hammer that point home - it's perfectly possible for, say, 6 of the member states to agree on a carbon tax, but then they will have to set up a multilateral body, because the EU treaties state that they can't use the EU to implement it even by enhanced co-operation.

The role of the EU is only to implement the decision of the countries to impose a tax, and to ensure that the implementation is equally fair to all the member states. The EU cannot of itself impose a tax, nor can it impose any penalties on you if you evade that tax, because the taxes you pay are Irish taxes, and their payment or evasion is between you and the Irish government.

cordially,
Scofflaw

Scofflaw

Anonymous1987 wrote: »

That's kinda my point if every country is doing the same thing then why don't they use the EU to co-operate? My only explanation is that most EU countries including Ireland fear a truly single European market.

I would imagine that the problem with using the EU is that they would (a) have to come to a universally acceptable version, and (b) would find it harder to repeal when they want to. That applies particularly to the UK, which would come under quite a lot of pressure from the City to ensure the loosest possible terms and the easiest possible abandonment of the policy.

(Again, for those who assume that a and b are the result of some kind of EU imposition of rules, they're not - they're the inevitable corollaries are a multilateral agreement of any kind.)

cordially,
Scofflaw

rumour

Thanks for that, very informative. I am concerned that this will gain momentum. What is the EU's position at the Copenhagen summit?

Increasingly it appears climate change is related to industrial output and hence wealth. (Blatantly obvious I believe by the state of affairs). Now it strikes me that Lisbon as a concept (not the specifics) is impotent for the reasons you have identified above. However that will not stop momentum in Brussels to have the situation altered to face this global challenge. Otherwise and it is true Europe will have no more than a fragmented input into this process. This very argument is so easily politically advanced to support further cohesion. If enough fear can be engendered in people you can convince them of anything. (my best and worst example is people jumping out of the towers on 9/11). Tell them that we'll destroy the planet or do what I say...well you can draw your own conclusions.

Control of tax is effectively control of a country. That in some respects is evident in Ireland currently (Lisbon had no input whatsoever here, rather we ran out of money and consequentially threatened the viability of the EURO at a certain point in time and were bailed out by the ECB, we no cannot exist without them and hence are beholden to them). Anyway I am not against this process of cohesion, but as I have said before I do not subscribe to the political construct currently on offer, as creating this cohesion will extrapolate far beyond a financial remit and delve into social issues. This is where it becomes thorny and I believe they should not go. Social issues are divisive and so is the principal of exceptions for each and every country. For me exceptions are a negative consequence, agreement and unity are positive consequences.

That is why I prefer the American construct of two houses, one which represents the population demographics and a second which represents the states equally. The first sets the agenda but must submit to the second. The second house preserves unity. A very good double check.

This has been circumvented in Europe. Power is resting where it has been for the last four hundred years, albeit with a mechanism to facilitate agreement but on their terms. Expansions distract from this core issue. When the process of expansion grinds to its inevitable end, infighting and jostling for position is bound to happen. Look at the internal market process a few weeks ago, France and Germany included, the UK objecting and the rest? Not even at the table.

This is where I believe the flaws of Lisbon will be exposed in time. Maybe by then the EU will have matured/consolidated enough so that popular support will be enough to overcome national interests and reform will be forthcoming. However taking Ireland as an example, reform of political institutions is notoriously difficult.

Prospects for another day I guess.

Scofflaw

rumour wrote: »

Thanks for that, very informative. I am concerned that this will gain momentum. What is the EU's position at the Copenhagen summit?

Pushing for those measures estimated by the scientists as required to prevent more than 2 degrees of warming - although, to be honest, it's probably too late.

rumour wrote: »

Increasingly it appears climate change is related to industrial output and hence wealth. (Blatantly obvious I believe by the state of affairs). Now it strikes me that Lisbon as a concept (not the specifics) is impotent for the reasons you have identified above. However that will not stop momentum in Brussels to have the situation altered to face this global challenge. Otherwise and it is true Europe will have no more than a fragmented input into this process. This very argument is so easily politically advanced to support further cohesion. If enough fear can be engendered in people you can convince them of anything. (my best and worst example is people jumping out of the towers on 9/11). Tell them that we'll destroy the planet or do what I say...well you can draw your own conclusions.

If that were the issue, climate change has been a dismal failure, largely because it involves rather more tangible sacrifices than has the "war on terror", which has largely involved damages to civil liberties. Of all the "anti-terrorism" measures, the one that has probably generated most public annoyance is the restriction on liquids on flights - and that's exactly the kind of change required to combat climate change.

rumour wrote: »

Control of tax is effectively control of a country. That in some respects is evident in Ireland currently (Lisbon had no input whatsoever here, rather we ran out of money and consequentially threatened the viability of the EURO at a certain point in time and were bailed out by the ECB, we no cannot exist without them and hence are beholden to them). Anyway I am not against this process of cohesion, but as I have said before I do not subscribe to the political construct currently on offer, as creating this cohesion will extrapolate far beyond a financial remit and delve into social issues. This is where it becomes thorny and I believe they should not go. Social issues are divisive and so is the principal of exceptions for each and every country. For me exceptions are a negative consequence, agreement and unity are positive consequences.

It appears the member states largely agree with you - the EU's remit in social affairs is extremely limited, and involves virtually no ability to set social policy for the member states.

rumour wrote: »

That is why I prefer the American construct of two houses, one which represents the population demographics and a second which represents the states equally. The first sets the agenda but must submit to the second. The second house preserves unity. A very good double check.

Instead, Europe has a different set of checks, perhaps more appropriate for the fact that the EU is an international joint action framework, where the rights of the constituent states are paramount rather than the centre. The Commission is there to ensure that legislation created through the EU is fair to all members, while the Parliament is there to allow the citizens to oppose or modify legislation. Since, in most cases, the alternative to European-level legislation is less-coordinated national legislation, the same set of checks aren't required as for the legislative centre of a federal state like the US.

rumour wrote: »

This has been circumvented in Europe. Power is resting where it has been for the last four hundred years, albeit with a mechanism to facilitate agreement but on their terms. Expansions distract from this core issue. When the process of expansion grinds to its inevitable end, infighting and jostling for position is bound to happen. Look at the internal market process a few weeks ago, France and Germany included, the UK objecting and the rest? Not even at the table.

This is where I believe the flaws of Lisbon will be exposed in time. Maybe by then the EU will have matured/consolidated enough so that popular support will be enough to overcome national interests and reform will be forthcoming. However taking Ireland as an example, reform of political institutions is notoriously difficult.

Prospects for another day I guess.

If you mean that Lisbon leaves the member states in control of the EU, that's quite true. I'm not convinced that isn't the right way to have things.

cordially,
Scofflaw

rumour

Scofflaw wrote: »

Pushing for those measures estimated by the scientists as required to prevent more than 2 degrees of warming - although, to be honest, it's probably too late.

Do they agree measures on behalf of the member states?

Scofflaw wrote: »

If that were the issue, climate change has been a dismal failure, largely because it involves rather more tangible sacrifices than has the "war on terror", which has largely involved damages to civil liberties. Of all the "anti-terrorism" measures, the one that has probably generated most public annoyance is the restriction on liquids on flights - and that's exactly the kind of change required to combat climate change.

Oh I don't agree here, look what fear did in a minor referendum. Don't forget there are billions to be had if we can get this new green economy of the ground. Thats alot of political motivation.

Scofflaw wrote: »

It appears the member states largely agree with you - the EU's remit in social affairs is extremely limited, and involves virtually no ability to set social policy for the member states.

Time will reveal this, there is now a charter of rights interpreted by a European Court, forgive me I forget which one it is exactly. Do you think the lawyers won't extend their remit, jurisdiction? Again there are billions to be made here. When the appeals for family rights, workers rights, working time etc etc etc start as they enivitably will we'll see how much social remit they have.

Scofflaw wrote: »

Instead, Europe has a different set of checks, perhaps more appropriate for the fact that the EU is an international joint action framework, where the rights of the constituent states are paramount rather than the centre. The Commission is there to ensure that legislation created through the EU is fair to all members, while the Parliament is there to allow the citizens to oppose or modify legislation. Since, in most cases, the alternative to European-level legislation is less-coordinated national legislation, the same set of checks aren't required as for the legislative centre of a federal state like the US.

Again the dynamics of this construct will ensure that the strategic aims of a few central nations take precedence over the union. Not a good construct and I guess we will have to agree to differ here.

Scofflaw wrote: »

If you mean that Lisbon leaves the member states in control of the EU, that's quite true. I'm not convinced that isn't the right way to have things.

Well France and Germany certainly have a good handle on things.

On another note I do remember the principal argument for Lisbon was restructuring and streamlining necessitated by enlargement. Hence my surprise to find out today:

MEPs are to get an extra €32,000 a year -- phased in over two years -- to spend on staff to help them implement the European Union's Lisbon Treaty, writes Bruno Waterfield. It will take the total annual allowance for each MEP to €248,000 by 2011.
The European Parliament was forced to clean up the rules for expenses last February after instances of MEPs misusing the allowance.
However, an internal document proposed a 9pc increase in the parliamentary assistance allowance "following the entry into force of the Lisbon Treaty". "With more power comes more work," said a parliament official.
The boost to staffing payments will come on top of a proposed pay increase taking the annual salary of an MEP to almost €97,000.
MEPs also receive a "general expenditure allowance" of more than €50,000, plus subsistence payments while working in Brussels or Strasbourg that add up to another €45,000 tax-free. (© Daily Telegraph, London)

http://www.independent.ie/world-news/europe/meps-given-836432000-to-help-bring-in-lisbon-1978658.html

Once you create an institution its hard to control it....who has the power to stop this?

View

rumour wrote: »

On another note I do remember the principal argument for Lisbon was restructuring and streamlining necessitated by enlargement. Hence my surprise to find out today:

MEPs are to get an extra €32,000 a year -- phased in over two years -- to spend on staff to help them implement the European Union's Lisbon Treaty, writes Bruno Waterfield. It will take the total annual allowance for each MEP to €248,000 by 2011.
The European Parliament was forced to clean up the rules for expenses last February after instances of MEPs misusing the allowance.
However, an internal document proposed a 9pc increase in the parliamentary assistance allowance "following the entry into force of the Lisbon Treaty". "With more power comes more work," said a parliament official.
The boost to staffing payments will come on top of a proposed pay increase taking the annual salary of an MEP to almost €97,000.
MEPs also receive a "general expenditure allowance" of more than €50,000, plus subsistence payments while working in Brussels or Strasbourg that add up to another €45,000 tax-free. (© Daily Telegraph, London)

http://www.independent.ie/world-news/europe/meps-given-836432000-to-help-bring-in-lisbon-1978658.html

Once you create an institution its hard to control it....who has the power to stop this?

I saw the orginal article on this in the Telegraph. It starts by saying MEPs will get the money, then half way through waters it down to it is proposed (in a report) that MEPs will get the money.

Obviously, the report would need to be approved by the Parliament and (I presume) the Council of Ministers.

Incidentally, the Parliament gained significant additional powers under Lisbon, which would mean that "streamlining" wouldn't apply in their case.