Download Reform of social management in fiscal arena 2002

European social model and
common challenges – some
provocative remarks
Miroslav Beblavý
Slovak Governance Institute
Executive Director
[email protected]
Is tax harmonization an appropriate
answer to bridge the current socioeconomic differences within the
European Union?
• What kind of tax harmonization? For what
purpose?
• European externalities? Social, environmental
ones? Promoting efficiency and growth?
Tax harmonisation? Tax rates, in % of GDP
4
3.5
3
2.5
excise+consumption
2
pollution
corporate
1.5
1
0.5
0
EU-15
postcommunist NMS
Austria-Hungary
Nordics
What to harmonize?
• Is CIT the only serious candidate?
• What about VAT – abolishing the lower
rate or at least limiting it?
• What about energy, environment and legal
“drugs”?
• Do we see social and environmental
dumping and negative effects of
competitiveness by old member states?
CIT – what to harmonize?
• Efficiency would argue ceteris paribus for a
simple CIT, in which case a low rate with broad
base is appropriate
• Efficiency would argue for taxing income at the
level of individuals rather than corporations, but
for practical reasons might not be feasible
• There is limited evidence that CIT differentials
are driving movement of companies or that there
is significant convergence
Topic no: 2
• How can the EU be a catalyst for positive
change and have 'soft' instruments, such
as the Open Method of Coordination, the
potential to play a meaningful role in the
future of European policy?
Employment rate, 15-64, %
70
68
66
64
EU-15
62
postcommunist NMS
Austria-Hungary
60
58
56
54
1998
1999
2000
2001
2002
2003
2004
2005
2006
Topic no. 2 – cont.
• The new social and economic challenge
for NMS: Increasing employment rates
• OMS can be instrumental
Topic no. 3:
• Can and should we develop pan-European
strategies that tackle structural problems
common to both Eastern and Western
Europe, including high unemployment and
rising inequalities?
Unemployment, %
12
10
8
EU-15
6
postcommunist NMS
Austria-Hungary
4
2
0
1998
1999
2000
2001
2002
2003
2004
2005
2006
Topic no. 3 – cont.
• Are inequalities a problem in NMS? In
Central Europe?
Risk-of-pov erty, %
18
16
14
12
10
8
6
4
2
0
EU-15
postcommunist NMS
Austria-Hungary
Nordics
Inequality, top 20% /bottom 20%
6
5
4
3
2
1
0
EU-15
postcommunist NMS
Austria-Hungary
Nordics
Topic no. 3 – cont.
• Austria-Hungary – the most equal in the
EU together after Nordics
• However, there is still a problem of the top
run
• The rest of the new member states:
inequalities are high
And now – let the
debate begin...