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pampango

(24,692 posts)
4. "Income taxes make the largest single contribution to national tax revenues ..., representing 51%...
Tue Jun 17, 2014, 04:24 PM
Jun 2014
Income taxes make the largest single contribution to national tax revenues across the bloc, representing 51 percent of total revenues.

According to the Eurostat report, VAT represented another 15% to 20% of total tax revenue. The VAT is regressive (as is our FICA though it is based on income while the VAT is based on expenditures). I suppose you could make the case that a regressive tax like our FICA or their VAT creates a sense of ownership in the safety net that they fund (creating "third rails" that politicians are afraid to touch).

With 50%+ coming from progressive income taxes and 15-20% coming from regressive VAT it would seem to be on balance a progressive funding system. It could be better, though, and the EU Commission is making an effort to shift the source of taxes away from labor to environmental, property and capital taxes.

The commission is keen for governments to shift their tax regimes away from labour to environmental taxation, as well as higher levies on property and assets, which are easy to collect.

The commission has no powers to change national tax policies but has proposed reforms such as a tax on financial transactions set to be introduced by 11 member states, as well as revising the VAT system and promoting a common corporate tax base.

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