Dichiarazione di Dario ROMANO

The main target of this reform is to reduce direct contributions from member country budgets: this will create more autonomy for the EU and, especially, more consistence between EU policies and EU financing.

It is quite important to focus on these two new innovations. Firstly, the own VAT resource: it will create a new link between national and European levels of administration. Moreover, “it will provide significant and stable receipts to the EU with limited administrative and compliance costs for national administrations and businesses”.

As reported in the Green paper on the future of VAT, “reforming the VAT system can play a crucial role supporting the delivery of the Europe 2020 strategy and a return to growth through its potential to reinvigorate the single market and underpin smart budget consolidation in the Member States. Any such improvements require a comprehensive VAT system that can adapt to changes in the economic and technological environment and is solid enough to resist attacks of fraud of the kind experienced in recent years”.

The other great innovation is the introduction of an EU FTT. Before any discussion, it is important to underline that FTT is not the same of the Tobin Tax: indeed, the second one has to be applied on currency transactions, while FTT will not tax these operations. The scope of FFT tax “covers instruments which are negotiable on the capital market, money-market instruments (with the exception of instruments of payment), units or shares in collective investment undertakings (which include UCITS and alternative investment funds) and derivatives agreements. Furthermore, the scope of the tax is not limited to trade in organized markets, such as regulated markets, multilateral trading facilities, but also covers other types of trades including over-the-counter trade.”

(European Commission, COM(2011) 594 final)
This directive proposal, published on 28th September 2011, will apply on the territories of EU members. It will not regard transactions involving private households or SMEs, in order to protect little and medium investors. However, currency exchange dealings and raising of capital by companies or public entities will not be taxed either. This kind of taxation is already present in 10 EU countries, but nowadays EU needs the harmonization of the subject in order to avoid market distortions and to reduce financial fragmentation of the common market.

According to European Commission official estimates, tax revenues could be around EUR 57 Billion/year in the EU. This revenue could be used in several ways: for instance, it could be used as the first real own resource for the European budget; on the other hand, this revenue could help to reduce national contribution to the EU budget and “leaving a lesser burden on national treasuries”.

We have to look at this tax from two different perspectives so that we can have a full view of the context. On the one hand, we have the political message: it is important, for European institutions, to reduce the “democratic deficit” they have with European citizens. Raising a tax on the financial sector, responsible for the huge crisis we are involved in, could be a positive signal for European inhabitants. It is considered as the fairest action that could be done in order to make someone pay for the economic crisis.

In addition to this, EU will give a symbolic signal to all the world markets: it seems that European officials are telling us that “financial sector has to pay for the crisis, and we are pioneers in this way. The rest of the world has to follow us, because is a just cause”.

On the other hand, we have not to underrate the macroeconomic consequences of introducing such a tax.
European Commission estimates say that, from 2014 (starting year of FTT), we could expect that EU GDP will decrease of 0.5%. This is due to the volume of exchanges that would be surely affected by this new fiscal imposition. In the past, we have the Swedish example that surely cannot be considered as a positive one: indeed, as written in an article by Allister Heath (editor of City A.M., business newspaper of London), in 1984 Swedish government introduced a tax on the purchase or sale of equities, applicable to all trades and to stock options. In 1991, every tax had been swept away, because of the failed revenue estimates: government revenue predictions were 1.5 billion kroner per year; instead tax collection was only 50 million kroner per year.

In fact, the number of transactions decreased and then collapsed. In 1986, 60% of the trades for the most famous Swedish stocks moved to London. In 1990, over half of the whole Swedish equity trading had moved to London. We can think that we can live the same situation with the EU FTT imposition: maybe capitals would fly to New York, or Tokyo, or Hong Kong.

Then, no revenue would be assured and, moreover, the GDP decrease will be much bigger than expected. Furthermore, this kind of tax reduces inevitably financial market liquidity and, more than everything, in the long-term the burden of tax will be shifted. Indeed, as written by Kenneth Rogoff (professor of Economics and Public Policy at Harvard University and former chief economist at IMF), heavy taxes on financial transactions would increase the cost of capital, thus reducing investments.

With a lower capital stock, output would eventually decrease and consequently government revenues would decrease too. Besides, wages would go down and common workers would indirectly pay the tax burden. As Rogoff wrote, unfortunately, “FTTs violate the public finance principle according to which is inefficient to tax intermediate production factors, especially those who are very mobile and volatile”.

The solution could be a global FTT that would be surely much more efficient and effective in the fight against speculation. However, it will be very difficult to find a global agreement on this delicate subject.

Fonte: Facebook - Dario Romano | vai alla pagina

Pubblica su: