10 Colum. J. Eur. L. 297 (2004)

Agustin José Menéndez, Ramón y Cajal Researcher, Departamento de Derecho Público, Universidad de León, Cidel-fellow, ARENA, Universitetet i Oslo.

The tax ought to be uniform; because the present constitution was particularly intended to affect individuals, and not states, except in particular cases specified

Je préfere la réalité d’un souveraineté partagée à l’illusion d’une souveraineté nationale tournant à vide

This paper considers the need for granting the European Union a genuine power to tax. The argument is developed in several steps. First, it is shown that the granting of such a power to tax is both legally mandated and legally framed. In stark contrast to classical international organizations, or for that matter, to the Articles of Confederation which predated the U.S. Constitution, the Communities were expected to acquire full taxing and spending powers. Special attention is paid to the affirmation of the principle of social and economic cohesion as one of the fundamental principles of Community law. Second, it is argued that the development of a genuine power to tax of the Communities is normatively desirable. The positive normative properties of a European power to tax are shown in two reform cases: the modest and the ambitious cases of reform. The principle of no public expenditure without taxation is shown to require financing of the present European budget through taxes. A proper determination of requirements of distributive justice in a complex political community is said to defend a larger European budget, aimed at the redistribution of economic resources among the citizens of the European Union. Third, the two cases of reform are prudentially advisable. Redistributive taxation is the price of European civilization. It constitutes a basic precondition for the successful consolidation of the Union as a political community, and for the proper integration of new members once enlargement to the East is fully effective. A summary look at the American case further shows that the creation of supranational institutions tends to lead to the establishment of central taxing powers. Such powers tend to be reinforced once the question of distributive fairness in the allocation of public burdens becomes a central one in the political agenda (as it was the case in the United States from, at the very least, the turn of the XXth century). Fourth, the two cases of reform are feasible. In sum, legal, normative and prudential criteria point to at least a partial transfer to the Union of the power to tax savings income and corporate income.