New resources for the EU budget

How to erase new resources for the EU budget? This is the question of whether Emmanuel Macron asked in his speeches by Athens and Sorbonne when he stated that he wanted “a budget of several hundred billions of euros” for Europe. A high-level group chaired by Mario Monti, the former Italian president of the Council, worked on this issue. Its results made public in early 2017, return to Honor an idea once defended by Jacques Delors: create a tax on European companies.

For 30 years, in the name of “competitiveness”, a number of European countries have reduced corporate taxation: attracting investments, they reduce corporate tax and the strength of neighboring countries to do the same if they do not Do not want to be subject to cumbersome relocations …

At European level, the average income tax rate – which accounted for about 45% in 1985 – fell to less than 25% today and the European Commission indicates that the average effective rate is less than 20% .

In the United States, the federal income tax rate is 35% in addition to the “small” state taxes, which lead to an average corporation tax rate of 38%.

When Fdroosevelt arrived at the White House in 1933, the funds were almost empty because all states had engaged in a tax dumping without recovery: Texas dropped his taxes to attract business, then Florida and the Arkansas have followed a lawsuit and businesses moved their production to where the tax was the lowest. And because the federal government did not have the means to fight the crisis, the economy flows into a depressive spiral …

Roosevelt has decided to break with this logic and, in a few weeks, has adopted legislation for the creation of a federal tax on corporations: whether in Florida or Texas, companies had to pay a 35% tax of their benefits. Washington gathered the tax and then gave a large part to the Member States of the Union.

All historians insist on the decisive importance of “federal jump” implemented in a few months by the United States after the 1929 crisis. Without this federal effort, if they remained blocked in the logic of competition and The dumping, the United States could have collapsed, unable to finance the new transaction policy designed to combat unemployment and also unable to finance the war effort.

In an increasingly unstable and dangerous world, is not it urgent that Europe can also take a federal leap in selected areas?

Evolution of the corporate tax rate in Europe and the United States from 1993 to 2010

Today, the companies tax is 15 points below, on average, in Europe than in the United States. No country can, alone, combat this dumping, but nothing prevents us, at European level, to create a company (at a rate of 5%) that fuel a real European budget, of which an important part would be useful. To combat global warming in Europe, invest in research and replace the United States in “100 billion Copenhagen” funding for the South.

The net results of the euro area companies accounted for about 1.5 billion euros in 2016 for non-financial corporations and $ 410 billion for financial corporations.

A climate contribution of 5% of profits?

A tax whose average rate would be 5% would result in about 100 billion years (for the euro area only). This is in the order of scale of what is needed to participate in the co-financing of the project on the European territory and to finance the Global Alliance of Sustainable Development that Jacques Chirac has called to Johannesburg.

Thus, by being financed by 0% of loans for all that is profitable in 10, 15 or 20 years, and by new resources, with regard to the competence of a federal budget, the Covenant Financial climate powerfully accelerates our market towards a decarbonized economy in Europe and neighboring countries. 2021