GoKawiilKEY INSIGHTS + A budget financed by wages: Gross national income-based national contributions rest largely on taxes on labour and consumption, so the EU budget ultimately leans on ordinary earners.
Gross national income-based national contributions rest largely on taxes on labour and consumption, so the EU budget ultimately leans on ordinary earners. The net-position trap: While Brussels depends on national transfers, the debate collapses into who pays in and who takes out, crowding out any discussion of European public goods.
While Brussels depends on national transfers, the debate collapses into who pays in and who takes out, crowding out any discussion of European public goods. Taxing the very wealthy: A minimum tax on individuals with net wealth above €100 million carries by far the largest revenue potential of the options assessed.
A minimum tax on individuals with net wealth above €100 million carries by far the largest revenue potential of the options assessed. Mobility argues for Europe: Financial trades, crypto assets and flights cross borders too easily for national taxation to bite, which is precisely why EU-level levies would work better.
Financial trades, crypto assets and flights cross borders too easily for national taxation to bite, which is precisely why EU-level levies would work better. New money, not recycled money: Taxes on ultra-high wealth and crypto transactions barely exist nationally, so an EU levy would add revenue rather than take it from national treasuries.
Spending needs for the EU budget for 2028–2034 have grown, and nowhere more so than in the investment required for the social and ecological transformation. At the same time, it is important to move beyond the problematic debate about higher national contributions to the EU budget, since those contributions are financed largely through taxes on labour and consumption. We have analysed how new EU revenue sources — among them taxes on ultra-high wealth and on crypto transactions — could help to do exactly that.
Political negotiations on the EU budget for the years 2028–2034 are entering a critical phase. The European Commission has presented a concrete proposal for a larger EU budget. Under it, the budget for the 2028–2034 period would amount to almost €2 trillion, or around 1.26 per cent of the EU’s gross national income (GNI), compared with approximately 1.1 per cent under the current financial framework.
The larger budget is intended to address growing public spending requirements related to climate action and digitalisation, public security and competitiveness, while also meeting the repayment obligations arising from the Covid-19 recovery fund.
The EU budget is currently financed predominantly through contributions from the member states, calculated on the basis of GNI and raised, in turn, mainly through taxes on labour and consumption. They are supplemented by revenue from value-added tax and customs duties.
This financing architecture has long been criticised, because it frequently narrows political debate to national net positions. Attention then fixes on how much each member state contributes and how much EU funding it receives in return. Such a perspective makes it more difficult to view the EU budget as an instrument for financing common European tasks, and it thereby limits the political scope for collective action at the European level.
... continue reading