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Brussels, 02.09.2002
European Responsibility for Growth and Employment Basic Points for the Budgetary and Tax Policies Proposal
of the EUCDW and the SME Union The European Union is more than an economic project. The tasks of the Community include a balanced and sustainable development of economic life, a high level of employment and of social protection. Method To achieve this, the question of European responsibility is posed not only in economic, employment and social policy, but also in budgetary and fiscal policy. The EPP stresses that, basically, budgetary and fiscal policy remains in the competence of the member states which, however, are committed in the economic union to coordinate their national budgetary policies according to the pact for stability in Europe. However, in these policy spheres there are challenges which can no longer be mastered alone by the member states of the EU, and where strategies and solutions must be sought at the European level. Therefore the Union has here, too, the obligation to coordinate, in order to realize its goals within the framework of the Economic and Currency Union, as well as regarding employment policies. Thus it is a question of making greater efforts, (as foreseen in the so-called "taxation package") to reduce bureaucratic obstacles, double taxation and regulations which do not accord with the internal market. Of Union-wide importance are, further, progress in introducing fiscal instruments for environmental protection, e.g. CO2 and energy taxes, which were agreed by all member states within the framework of the Kyoto Protocol. The possible taxation of interest (from savings) is also one of the spheres which can no longer be regulated exclusively at the national level. Finally, enterprises which are operating Community-wide, particularly those that want to adopt the legal form of a "European company", for example with regard to the basis of assessment for taxation, require new, harmonized Community regulations. If we want to keep to the principle of unanimity in the decisions on basic European principles of budgetary and fiscal policy, the appropriate instruments must be developed for these challenges, enabling action to be taken. In this sense it is appropriate to use the method of qualified majority for concrete decisions, for example, in the sphere of mutual assistance and cooperation between the tax authorities. Basic Points In budgetary and fiscal policy, the EPP starts from the following basic points: We keep to the commitment of balanced budgets according to the criteria of the economic and monetary union. They should be achieved rather by cutting expenditure than by increasing taxes. The member states of the EU must be able to fulfil their respective obligations (investments, social and environmental protection, services of general interest, etc.) Two-thirds of the employed in the EU work in small and medium enterprises (SME). Basic conditions are necessary to aim at capital remaining in the enterprises and thus increasing the capital-to-assets ratio, prevents increased investment and an increase in employment. Tax burdens must be shared out fairly. Tax equity is essential for the acceptance of taxes and, in the end, of state authority. Tax burdens must not one-sidedly be imposed on workers and on small and medium-sized enterprises, while large companies can evade their tax commitments by, for instance, depreciation possibilities. Tax equity also means that we must ask for the reasons for the different taxation of capital and work. Also from the point of view of a successful employment policy it cannot be that work is taxed more and more and capital less and less. It must be our aim to reduce the fiscal burden in total (especially the burden on the factor "work"), and not to increase it further. In this connection the EPP welcomes all initiatives and agreements that possible regulations on interest taxation are imposed throughout Europe. In particular, it will be necessary to improve measures against fraud at the European level. The introduction of a qualified majority in the sphere of official assistance between authorities of different countries could be an important step in this respect. With regard to the tax rates, it must be said that a certain amount of tax competition within the EU is inevitable and can also put positive impulses by reducing taxes; however, harmful tax competition (including indirect state aid), which can also cause unnecessary re-siting of firms, must be basically combated. From the aspect of the internal market, harmonization is necessary in the spheres of the basis of tax assessment, profit and loss calculations etc.. Here the priority is to lay down unified definitions for the basic concepts, such the basis of tax assessments, profits, losses, taxable income, depreciation rules, transfer into reserve.
The
European Union of Christian Democratic Workers (EUCDW) consists of 23
workers' organisations from 15 countries and is an association of the
European People's Party (EPP).
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