Guesnerie, Roger --- "Taxation in the European Union – the harmonization issue" [2003] ELECD 118; in Tumpel-Gugerell, Gertrude; Mooslechner, Peter (eds), "Structural Challenges for Europe" (Edward Elgar Publishing, 2003)

Book Title: Structural Challenges for Europe

Editor(s): Tumpel-Gugerell, Gertrude; Mooslechner, Peter

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843764748

Section: Chapter 18

Section Title: Taxation in the European Union – the harmonization issue

Author(s): Guesnerie, Roger

Number of pages: 12

Extract:

18. Taxation in the European Union ­
the harmonization issue
Roger Guesnerie

INTRODUCTION

Taxation regimes differ across European countries, both in terms of the tax
burden (tax rates) and the global structure of tax income.
Figure 18.1 shows the dispersion of taxes per capita as a function of GDP
per capita. The average level of the tax burden in the EU, as measured by

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20



15



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5



0
P UK DK EU
Taxes per capita GDP per capita

Figure 18.1 Taxes per capita and GDP per capita: a sample of countries
and average for Europe

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330 Taxes and benefits/fiscal structures

the ratio of government tax receipts to GDP, is 43 per cent. This is high by
international standards and reflects the comprehensiveness of the public
welfare system and the level of social security spending in the wealthier
countries.
Table 18.1 displays ratios of tax income to the corresponding tax base,
specifically the rate at which labour, capital and consumption are taxed. It
shows in particular the high level of the effective labour tax rate, which
accounts for 40 per cent of the wage bill, with 70 per cent mainly related to
social security contributions (non-wage labour costs).

Table 18.1 Effective taxes in Europe

Non-wage Personal Effective Effective Effective
labour costs income labour capital consumption
tax rate tax rate tax rate tax rate
Belgium 26.5 24.9 44.8 23.7 20.5
Germany 31.8 17.8 44.0 15. ...