Paper 10

“For a new Europe: tax reforms!”

Let us simplify taxation through six reforms that allow tax to be paid fairly by everyone, with two main objectives: to finance the State and the health system, and to prevent 25% of the population from living below the poverty line. All natural persons and companies operating in the Union, including the GAFAs, are given an IBAN-type tax code that becomes the universal identification. Bank accounts are replaced by this code preceded by the BIC code, which allows self-checking of the VAT type.

1 - Freezing of debts: the ECB freezes all national debts, repaying only small holders who are natural persons, by means of a life annuity. In return, the standard of living of the States is drastically reduced and the States give up any new borrowing, except to finance investments recorded in a national balance sheet comprising assets, liabilities and an operating account. This avoids hyperinflation, with the cascade of bankruptcies and the undeclared work that would result.

2 - The CO2 tax: the State taxes all economic activity according to the total CO2 generated, including for products imported from outside the Union. This measure penalises polluting imports and favours short supply chains and the local and circular economy.

3 - Personal income tax: it is calculated on total income less salaries paid to third parties, at three rates set by the States. Advantage: this single tax finances State spending and Social Security. Benefits are paid only to the most deprived, which will reduce costs.

4 - Corporate tax: it is calculated on turnover, from which purchases of raw materials, salaries paid in the Union, depreciation and taxes already paid are deducted; entertainment expenses are no longer deductible, and the structure of the single official balance sheet is adapted.

5 - The Sales Tax: it replaces VAT and applies to every invoice for products and services in the Union. It is no longer recoverable but is deducted twice from the taxable base, up to the amount of salaries paid, for individuals and companies alike.

6 - The Tobin Tax: it applies to every financial movement, at a very low rate, and will ultimately finance State spending, allowing a gradual reduction of the personal and corporate income tax rates.

www.springeurop.eu

July 2020