Selected as the European Union’s first ever president last week, Herman Van Rompuy is already laying down plans to amend euro tax levels once his position is officially active on 1 December.
After holding a meeting for the Bilderberg group – a group consisting of top politicians, business men and bankers – information was leaked about what Rompuy had revealed at the meeting. Rompuy has given some inkling towards his plans for international trading tax levels. The EU president intends to add weight to European Commission President José Manuel Barroso’s initial proposal to introduce a new ‘Euro tax’.
In his official statement, Rompuy said: ‘The financing of the welfare state, irrespective of the social reform we implement, will require new resources. ‘The possibility of financial levies at European level needs to be seriously reviewed.’
The new version of Euro tax will emulate James Tobin’s tax on currency speculation, originally implemented by the American economist in the US in 1972. In so doing, this tax will allow the government to authorise and impose an extra tax on financial transactions. It is supposed that this in turn will act as a solution to the international banking crisis.
The European Commission (EC) acts as the EU’s executive division and civil service. Barroso has set up different plans for a Euro tax that would deduct a percentage directly from fuel duties and VAT. These taxes help fund the EU’s general expenditure, which will total approximately £121bn next year. At the moment, the various treasuries of individual member nations collect all such funds..
Alternatively, Rompuy’s new Euro tax could appear directly on each shopping and petrol station receipt, the VAT percentage charged would be displayed showing the amount that would directly be paid to Brussels.
Some supporters back the new Euro tax by supporting aspects of it that will allow only fixed proportions of the existing tax to be charged rather than increasing the whole tax amount (which in turn is proposed to encourage transparency in the running of the EU). Critics say that this control over tax distribution may cause an ‘anti-Brussels’ feeling among other states.
Backing from Barroso as well as Rompuy – two of the most powerful members of the EU – will help propel the new Euro tax proposals with greater momentum than before. According to The Telegraph, Rompuy’s opponents may be quick to underestimate his determination to get his own way. Although Rompuy’s selection may have been down to his consensus-building traits, he is also known to some as a ruthless politician.
