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Political and Economic Integration in the EU: The Case of Failed Tax Harmonization

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  • Fabio Wasserfallen

Abstract

The European Union (EU) tax mandate remains narrow. That there was only a limited transfer of tax authority to the EU exemplifies the failure of political and fiscal integration. Using a political economy framework, this article analyzes why the heads of state rejected tax harmonization proposals in the intergovernmental conferences. The presented findings of the original data on the Maastricht, Nice and Lisbon negotiations support the main hypothesis derived from the theoretical framework – namely that resistance against tax harmonization came predominantly from low‐tax countries. Moreover, the results indicate that after the accession of the central and eastern European countries the prospects of harmonizing tax policy starkly decreased. The analysis shows that tax heterogeneity and the enlargements have negative effects on tax integration. Based on the empirical findings and the theoretical framework, the article concludes by discussing how the creation of the monetary union restructured the politics of tax Europeanization and fiscal integration.

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  • Fabio Wasserfallen, 2014. "Political and Economic Integration in the EU: The Case of Failed Tax Harmonization," Journal of Common Market Studies, Wiley Blackwell, vol. 52(2), pages 420-435, March.
    • Handle: RePEc:bla:jcmkts:v:52:y:2014:i:2:p:420-435
    DOI: 10.1111/jcms.12099
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    2. Fabio Wasserfallen & Dirk Leuffen & Zdenek Kudrna & Hanno Degner, 2019. "Analysing European Union decision-making during the Eurozone crisis with new data," European Union Politics, , vol. 20(1), pages 3-23, March.
    3. Kozuharov, Sasho & Ristovska, Natasha & Ilieva, Jana, 2015. "Harmonization Of Tax Policies:Reviewing Macedonia And Croatia," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 6(2), pages 255-265.
    4. Alex Cobham & Petr Janský & Chris Jones & Yama Temouri, . "An evaluation of the effects of the European Commission's proposals for the Common Consolidated Corporate Tax Base," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    5. Sebastian Blesse & Pierre C Boyer & Friedrich Heinemann & Eckhard Janeba & Anasuya Raj, 2019. "European Monetary Union reform preferences of French and German parliamentarians," European Union Politics, , vol. 20(3), pages 406-424, September.
    6. Elisabeth Bustos Contell & Salvador Climent-Serrano & Gregorio Labatut-Serer, 2018. "The evolution of the tax burden for EU companies," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 12(4), December.
    7. Thomas Lehner & Fabio Wasserfallen, 2019. "Political conflict in the reform of the Eurozone," European Union Politics, , vol. 20(1), pages 45-64, March.
    8. Silvana Târlea & Stefanie Bailer & Hanno Degner & Lisa M Dellmuth & Dirk Leuffen & Magnus Lundgren & Jonas Tallberg & Fabio Wasserfallen, 2019. "Explaining governmental preferences on Economic and Monetary Union Reform," European Union Politics, , vol. 20(1), pages 24-44, March.
    9. Andreas Cassee, 2019. "International tax competition and justice: The case for global minimum tax rates," Politics, Philosophy & Economics, , vol. 18(3), pages 242-263, August.
    10. Neill Nugent & Mark Rhinard, 2016. "Is the European Commission Really in Decline?," Journal of Common Market Studies, Wiley Blackwell, vol. 54(5), pages 1199-1215, September.

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