In the European Union (EU) getting a common tax policy remains as an elusive goal. Up to now, only a limited transfer of tax authority to the EU has been possible. This very fact exemplifies the failure of political and fiscal integration at the EU level.

This article applies an economic political framework to analyze why the heads of state rejected tax harmonization proposals in various intergovernmental conferences. The the main hypothesis is that resistance against tax harmonization came predominantly from low-tax countries.

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