The European Trade Union Confederation (ETUC), in cooperation with the European Trade Union Institute (ETUI), organised a workshop on taxation against the background of the financial and global economic crisis. The objective of the discussion was among others to make recommendations to stem the Casino capitalism and to find methods for a fair taxation.
To start the discussions, Andreas Botsch of ETUI outlined the status quo at European level. During the now expired legislative period, the Commission had tried to find a common Consolidated Corporate Tax Base; due to the fact, however, that the 27 EU Member States had been unable to reach an agreement, this modest target failed. A major hurdle for reaching an agreement is the unanimity requirement. It needs only one Member State to veto a new tax regulation for it to fall through.

Botsch in particular criticized the situation according to which the tax burden had been shifting to labour since the 90ties, whilst the pressure had been taken of the capital. However, the question had to be asked - especially now - who would pay off the debt which was run up as a result of the financial crisis. Directly associated with this issue would also be the future financing of socio-political measures and the guarantee of making funds available for active labour market policy.

Pierre Habbard of the Trade Union Advisory Committee to the OECD outlined which tax matters had to be discussed within the OECD. These concerned in particular the influence of taxes on growth and financial stability, but also tax avoidance.

In particular models, aimed at avoiding taxes could endanger financial stability. For example, there would be debt financing structures, which would make it possible - completely legal - to deduct incurring tax twice or several times from taxable income. Financial instruments such as hedge funds or hybrid capital as well as off balance sheet financing models or leveraged by-outs would thereby apply. The different legal situations in the Member States would make a so-called tax arbitrage possible.

Within the scope of the G20 action plan one can only hope that progress will be made concerning fiscal policy matters. The G20 meeting in London, however, only produced marginal improvements. Hence, it was acknowledged that the current world economic crisis had been caused by missing or wrong financial regulations and the lack of financial market regulation. Agreement on off balance sheet financing models has been agreed. A breakthrough was achieved in case of tax havens, which have now come or will come under pressure by the G20. Results for protecting mortgage debtors or measures on international taxation, however, were missing.

Jacques Gombeer, General Auditor at Federal Public Service Finance, Belgium and Ludo Vekemans of the ETUC pointed out that based on its legislation the European Court of Justice would play an increasingly major role in fiscal matters and should therefore also be taken into account in any considerations on fiscal policy.

A worrying factor at European level would also be a noticeable erosion of corporate tax rates. In particular new Member States had introduced a “flat tax”, i.e. a uniform tax rate for income and corporate tax.

Fiscal policy would be an important subject for the trade unions because they were THE instrument for the redistribution of wealth and for financing a social Europe, was the final statement of Ludo Vekemans of the European Trade Union Confederation.