Eurostat, the statistical agency of the European Union, has released an informative update of tax trends across the EU over the past decade. By and large, the report shows a downward sloping trend in top statutory tax rates for both personal income taxes and corporate income taxes.
On average, the top personal income tax rate among the 27 EU nations fell 7.2 percentage points between 2000 and 2010, from 44.7 percent to 37.5 percent. Only four countries increased their personal income tax rates - Latvia (+1.0%), Portugal (+2.0%), Sweden (+4.9%), and the U.K. (a whopping +10.0% to 50.0%).
But the real story is on corporate income taxes where every country except Hungary, Malta, and Norway cut their top corporate tax rate during the past decade. Hungary was the only country to raise their rate, albeit 1 percentage point to 20.6 from 19.6.
As the table below shows, on average, the top statutory corporate tax rate among the EU27 fell 8.7 percentage points, from 31.9 percent to 23.2 percent. Among the 16 largest EU nations, the average rate is 25.7 percent.
By contrast, the top federal corporate rate in the U.S. has been fixed at 35 percent since 1993, and tops 39 percent when the average state rate is added to it. This is further evidence that the U.S. corporate tax rate is out of step with the rest of the developed world and needs to be cut dramatically for our economy to remain competitive globally.
| | Top Statutory Tax Rate on Corporate Income |
| Country | 2000 | 2009 | 2010 | Difference 2000 -- 2010 |
| EU 27* | 31.9 | 23.5 | 23.2 | -8.7 |
| EA 16* | 34.9 | 25.9 | 25.7 | -9.2 |
| Belgium | 40.2 | 34.0 | 34.0 | -6.2 |
| Bulgaria | 32.5 | 10.0 | 10.0 | -22.5 |
| Czech Republic | 31.0 | 20.0 | 19.0 | -12.0 |
| Denmark | 32.0 | 25.0 | 25.0 | -7.0 |
| Germany | 51.6 | 29.8 | 29.8 | -21.8 |
| Estonia | 26.0 | 21.0 | 21.0 | -5.0 |
| Ireland | 24.0 | 12.5 | 12.5 | -11.5 |
| Greece | 40.0 | 25.0 | 24.0 | -16.0 |
| Spain | 35.0 | 30.0 | 30.0 | -5.0 |
| France | 37.8 | 34.4 | 34.4 | -3.4 |
| Italy | 41.3 | 31.4 | 31.4 | -9.9 |
| Cyprus | 29.0 | 10.0 | 10.0 | -19.0 |
| Latvia | 25.0 | 15.0 | 15.0 | -10.0 |
| Lithuania | 24.0 | 20.0 | 15.0 | -9.0 |
| Luxembourg | 37.5 | 28.6 | 28.6 | -8.9 |
| Hungary | 19.6 | 21.3 | 20.6 | 1.0 |
| Malta | 35.0 | 35.0 | 35.0 | 0.0 |
| Netherlands | 35.0 | 25.5 | 25.5 | -9.5 |
| Austria | 34.0 | 25.0 | 25.0 | -9.0 |
| Poland | 30.0 | 19.0 | 19.0 | -11.0 |
| Portugal | 35.2 | 26.5 | 26.5 | -8.7 |
| Romania | 25.0 | 16.0 | 16.0 | -9.0 |
| Slovenia | 25.0 | 21.0 | 20.0 | -5.0 |
| Slovakia | 29.0 | 19.0 | 19.0 | -10.0 |
| Finland | 29.0 | 26.0 | 26.0 | -3.0 |
| Sweden | 28.0 | 26.3 | 26.3 | -1.7 |
| United Kingdom | 30.0 | 28.0 | 28.0 | -2.0 |
| Norway | 28.0 | 28.0 | 28.0 | 0.0 |
| Iceland | 30.0 | 15.0 | 18.0 | -12.0 |
| * Arithmetic average | | | | |
Source: Eurostat, "EU27 Tax Ratio Fell to 39.3% of GDP in 2008."
Go to the original author's site:I sent Virginia Attorney General Ken Cuccinelli a letter today, criticizing his office's amicus curiae brief in FFW Enterprises v. Fairfax County.
The case involves newly enacted special property taxes on property near what will be new Metrorail stations, with the revenue used to help fund the Dulles Metro extension. Such tax-benefit districts are common and justified under a "benefits conferred" approach whereby those who benefit from the spending are those who pay the taxes.
This case is different because Fairfax will impose the taxes only on commercial property. Residents and travelers will benefit at least as much, if not more, from the Dulles Metrorail improvements, so a tax only on commercial landowners within the geographic area surrounding the stations cannot be justified under a "benefits conferred" approach. Special district taxes for benefits from the Metrorail should be imposed uniformly over the taxing district, not arbitrarily on some types of property.
From the letter:
The Virginia Constitution limits policymakers' discretion in defining taxation categories in this context. Fairfax County and, unfortunately, your brief, argue that because the Uniformity Clause only requires uniformity "among the same class of subjects," the General Assembly is free to define the class however it wishes and survive any Uniformity Clause challenge. (Your 8-page brief does not even attempt to explain or justify the General Assembly's arbitrary action against taxpayers, instead pasting a page of text from the trial judge's opinion musing about possible rationales.)
If such a theory survived constitutional scrutiny, legislative classifications could routinely overburden select groups of private property to finance benefits enjoyed by the broader public. Such classifications could then be prone to a federal takings challenge because as a classification becomes increasingly specific to a certain type of property, a tax based on benefits conferred takes the nature of an arbitrary deprivation of property without due process.
The General Assembly's chosen route to raise revenues for the Metrorail construction may be administratively and politically convenient, but it creates exactly the type of discriminatory tax classification that the Virginia Constitution was designed to prevent. The General Assembly should not have the power to burden specific types of private property for public benefit under the guise of district-wide taxes. The state, and the state's Attorney General, has an obligation to protect taxpayers from such arbitrary actions.
For more on the FFW case, see here: http://www.taxfoundation.org/publications/show/26381.html
Go to the original author's site:The IRS has a helpful web page for all homebuyers who plan to claim the homebuyer tax credit on their income tax returns, and today the service updated the page to reflect Congress's action late on June 30 to extend a closing deadline for the program.
June 30 had been the final deadline for closing on a home sale for everyone who wanted the tax credit and had met the April 30 deadline for entering into a binding contract on a home sale. But at the last minute, Congress added 90 days, extending it to September 30 because real estate agents had complained that many purchasers who did meet the April 30 deadline were going to miss the June 30 closing deadline. Some observers predicted a high rate of fraud, asserting that people would backdate contracts entered into after April 30.
Whether fraudulent or legitimate, temporary tax credits for housing are just the same old congressional idea: to act as if they're solving a problem when they're actually just funneling taxpayers' money to powerful special interests like real estate agents, homebuilders and mortgage lenders.
It's particularly galling to see Congress twiddling its thumbs on the Fannie Mae/Freddie Mac fiasco. These mortgage goliaths -- once called "government-sponsored enterprises" - are now not much different from regular government agencies.
They're losing money at an astonishing rate, and they're still hiring!
You wouldn't expect an aggressive hiring campaign at an agency that has recently:
- contributed mightily to the economy's downfall by buying bad loans
- lost about $142 billion in taxpayer money over the last year
- been delisted from the stock exchange
- had CBO predict that they would continue losing money that may total $389 billion
And perhaps that CBO estimate of $389 billion is too low. CNBC is quoting housing experts who fear it may reach $1 trillion.
Go to the original author's site:
