While there are many factors that affect a country’s economic performance, taxes play an important role. A well-structured tax code is easy for taxpayers to comply with and can promote economic development while raising sufficient revenue for a government’s priorities.
Permanent full expensing is an efficient and neutral tax policy that will allow markets to allocate private investment effectively while moving the economy towards the climate goals of the EU.
Europe is facing difficult times. Governments are balancing the need for more resources with the need to maintain peace and prosperity domestically. To properly strike this balance, EU policymakers must incorporate “Fiscal Fairness” into the debate.
Since VAT revenues are such a significant and stable contributor to overall government revenues, EU policymakers should pay particular attention to how efficiently those revenues are raised.
Research has shown that spikes in tax rates can act as barriers to upward mobility. High marginal tax rates might directly influence the decisions workers make about accepting a raise, working additional hours, or whether they might remain on government benefits.
The EU’s recent VAT reform is an example of a win for governments, consumers, and companies. Charting a new path toward a more successful tax system.