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(2015)www.progressiveeconomy.eu. Mark abstract European Member States that have signed the treaties on fiscal consolidation are now experiencing difficulties to finance infrastructure and social services. Following the treaties, governments must urgently reduce their loans since their annual budget deficit should not exceed 0.5% of GDP and total sovereign debt should be lowered to 60% of GDP. Moreover Eurostat recently expanded its definition of sovereign debt to include public-private collaboration and financial guarantees by public authorities. The private sector on the other hand is not using its huge amounts of cash to increase production and employment. Instead corporations increase dividends, buy back shares and pay for take-overs and mergers. The latter rarely create jobs and often destroy some. The financial sector invests in the stock market instead of in the productive economy.While the European treaties prohibit additional borrowing by MS, they do not exclude that governments generate higher income. This is possible by preventing the massive tax avoidance and evasion that was recently documented, estimated by the EC at 1000 billion euro annually.Europe should implement and extent actions against tax evasion decided by the OECD, the G20 and the US Treasury. They include automatic exchange of information on bank accounts in more than 40 countries; the BEPS tax Action Plan (OECD-G20, 2013); and, in the US, FATCA (2010) and retroactive actions against tax inversion already effective. Also, the EU should add the earnings in all nations of each multinational, and redistribute this sum to MS using objective criteria. All this does not require a change in legal tax rates in MS.Another lead is taxing capital that leaves the EU if resulting in lower taxation. Each MS should ban rulings that lower the tax revenue. By increasing their internal revenue MS can reduce their debt, and simultaneously finance economic growth, in order to 1) avoid the massive loss of jobs in the public sector decided under austerity policies; 2) remedy the waiting lists in social housing, affordable nurseries, old age homes, hospitals and care for handicapped and refugees, school buildings, insulation, maintenance of roads, canals and rail, green energy, water conservation, and the ridiculous shortage of proper personnel in internal revenue services, the police, justice departments and detention centres, in several MS. This immediate rise in employment will increase demand and business results (updated July 2015).

Please use this url to cite or link to this publication: http://hdl.handle.net/1854/LU-6934799



Autor: Frank Roels

Fuente: https://biblio.ugent.be/publication/6934799



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