Tax harmonisation = high taxes

November 04, 2008 6:02 PM

The German Government are apparently threatening to veto an EU Commission proposal to extend member states' rights to reduce VAT on a variety of services (yes, you really do need unanimous EU permission to cut taxes on haircuts).


The fact that we have sacrificed our right to set our own tax levels on so many services is outrageous enough, but the reason the Germans have given for their obstruction is very revealing. The German Finance Minister Peer Steinbrueck said:

I am very reluctant to extend the reduced VAT rates as it makes no sense in terms of harmonising tax rates in Europe

So now it's official - as we've always said, EU tax harmonisation equals higher taxes all round. The idea that Britain can secure a low tax economy by handing over our tax sovereignty and then persuading everyone else that it's a good idea is total, utter and unadulterated bunkum.

The German Government are apparently threatening to veto an EU Commission proposal to extend member states' rights to reduce VAT on a variety of services (yes, you really do need unanimous EU permission to cut taxes on haircuts).


The fact that we have sacrificed our right to set our own tax levels on so many services is outrageous enough, but the reason the Germans have given for their obstruction is very revealing. The German Finance Minister Peer Steinbrueck said:

I am very reluctant to extend the reduced VAT rates as it makes no sense in terms of harmonising tax rates in Europe

So now it's official - as we've always said, EU tax harmonisation equals higher taxes all round. The idea that Britain can secure a low tax economy by handing over our tax sovereignty and then persuading everyone else that it's a good idea is total, utter and unadulterated bunkum.

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