{"id":35349,"date":"2023-10-28T02:20:00","date_gmt":"2023-10-28T02:20:00","guid":{"rendered":"https:\/\/www.lifeandnews.com\/articles\/?p=35349"},"modified":"2023-10-31T13:34:44","modified_gmt":"2023-10-31T13:34:44","slug":"calls-grow-in-europe-for-wealth-tax-to-finance-the-green-transition","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/calls-grow-in-europe-for-wealth-tax-to-finance-the-green-transition\/","title":{"rendered":"Calls grow in Europe for wealth tax to finance the green\u00a0transition"},"content":{"rendered":"\n

Martin Baloge<\/a>, Institut catholique de Lille (ICL)<\/a><\/em><\/h1>\n\n\n\n

Slowly but surely, calls for a wealth tax to finance the green transition are picking up in Europe, with a number of initiatives from different political movements put the issue (back) on the political agenda.<\/p>\n\n\n\n

In a September French parliamentary report<\/a>, Jean-Paul Mattei of the MoDem group, part of President Emmanuel Macron\u2019s ruling majority, spoke favourably of a such a tax to finance the ecological transition. At the beginning of the summer, Social Democrat MEPs Aurore Lalucq and Paul Magnette submitted a request to the European Commission for a \u201cEuropean citizens\u2019 initiative\u201d on the subject. If it gathers a million signatures in at least seven countries within a year, it could lead to the drafting of a European directive introducing an \u201cecological and social wealth tax\u201d targeting the 1% richest households<\/a>. In July, the commission gave the green light<\/a> to the collection of signatures.<\/p>\n\n\n\n

A study commissioned by the Green Group in the European Parliament and carried out by the NGO Tax Justice Network looked at the potential impacts of such an initiative. It found that a European tax on the 0.5% richest households would bring in 213 billion euros<\/a> a year, anything but insignificant.<\/p>\n\n\n\n

This is all the more remarkable given the virtual disappearance of wealth taxes within the member states of the EU. In 2023, only Spain still has one, with a threshold of 700,000 euros and rates that vary from one autonomous community to another. While it seems unlikely that such a tax will be reinstated at national level in France and Germany \u2013 the two countries that were the subject of our work<\/a> \u2013 the debate seems very different at European level when climate issues are involved.<\/p>\n\n\n\n

Ended in France, suspended in Germany<\/h2>\n\n\n\n

One of French president Emmanuel Macron\u2019s early measures was the abolition of the _imp\u00f4t de solidarit\u00e9 sur la fortune (ISF), a \u201csolidarity tax\u201d on wealth enacted in 1981 by Fran\u00e7ois Mitterand\u2019s government. To plug the budgetary hole, Macron replaced it with a tax on property wealth, the IFI. Despite the new tax, the change considerably reduced revenues: the ISF brought in 4 billion euros<\/a> to public coffers in 2017, the IFI only 2.35 billion euros<\/a> in 2022. The impact of the change on reducing the tax exile rate or improving the country\u2019s competitiveness remains unproven<\/a>.<\/p>\n\n\n\n

\"\"\/<\/a>
CC BY-SA<\/a><\/figcaption><\/figure>\n\n\n\n

In Germany, a wealth tax is still part of the country\u2019s Basic Law<\/a> (which acts as the country\u2019s constitution) although it has not been levied since 22 June 1995, when the Federal Constitutional Court ruled that it didn\u2019t respect the principle of equality before the tax \u2013 property was assessed on the basis of 1964 property values, while financial assets were assessed at market value. As property was taxed less heavily than financial assets, the court asked Helmut Kohl\u2019s government to revise the property values on which wealth tax was based. As the Kohl government chose not to do so, the tax was automatically suspended \u2013 though not abolished \u2013 on 1 January 1997.<\/p>\n\n\n\n

An unlikely return to the national level<\/h2>\n\n\n\n

In the two countries often described as the \u201cengines of Europe\u201d, the question of a return of capital taxation has frequently arisen. In Germany, all the left-wing parties put it on their manifesto at every legislative election, but with the exception of die Linke<\/a>, none is taking action.<\/p>\n\n\n\n

Interviews<\/a> we conducted with SPD and Green Party members of parliament between 2010 and 2016 show that the defence of wealth tax is just a fa\u00e7ade. Its main purpose seems to be to rally electoral, association, and trade-union support rather than be included in the various coalition contracts negotiated over the years. For example, in 2021 the SPD and the Green Party joined forces with the Liberal Party (FDP, right-wing) to form a new government. While they were in a strong position to reintroduce a tax on society\u2019s richest, even through a temporary measure, the possibility was quickly dismissed, and without any real surprise.<\/p>\n\n\n\n

Various strategies to reintroduce the wealth tax in France have been uniformly rejected by Emmanuel Macron, with Economy Minister Bruno Le Maire saying that creating such a tax \u201cis not the solution\u201d<\/a>.<\/p>\n\n\n\n

This situation is largely due to how opponents of a wealth tax have reframed the debates. While originally conceived as a solidarity measure in France and as a budgetary resource for the L\u00e4nder in Germany, opponents have successfully emphasised their supposed effects on businesses](https:\/\/link.springer.com\/article\/10.1007\/s11211-021-00383-y). Although business assets have been excluded from the tax base, the tax was decried as a disguised corporate tax<\/a>. The claim was that the ISF would lead to an exile of the wealthiest in a context of tax competition between states, a flight of capital and thus job losses.<\/p>\n\n\n\n

A European solution?<\/h2>\n\n\n\n

Caught in this impasse, the advocates of a wealth tax have shifted the battle to the EU level and linked it to a new issue \u2013 the environment.<\/p>\n\n\n\n

An analysis of parliamentary archives for the period 2010-2016 shows that no party in France or Germany, including ecologists, used this political framing. The issue of reducing social and economic inequalities through taxation has therefore given way to a potentially more consensual issue that is likely to attract wider support. A similar strategy has already been observed in the case of other public policies such as the reform of the labour code in Portugal<\/a>.<\/p>\n\n\n\n

By moving to the European level, the supporters of a wealth tax can bypass the criticism that individual nations\u2019 firms are being weakened in European economic competition. It is certainly this dimension that has led France\u2019s Ministry of Economics to keep open<\/a> the possibility of a European wealth tax.<\/p>\n\n\n\n

If the European Citizens\u2019 Initiative reaches the required number of signatures, it would enable supporters of the wealth tax to mobilise European public opinion. In many countries, including Germany<\/a>, public opinion seems to be in favour of such a measure.<\/p>\n\n\n\n

While a wealth tax still has a long way to go to make a major comeback in Europe, there is movement in Brussels. Such a tax would also lay the foundations for a common tax system that would strengthen the EU as a whole, at a time when the continent\u2019s far-right Eurosceptic parties, in advance of the 2024 elections, are seeking to weaken it.<\/p>\n\n\n\n

Martin Baloge<\/a>, Ma\u00eetre de Conf\u00e9rences en Science politique, Institut catholique de Lille (ICL)<\/a><\/em><\/p>\n\n\n\n

This article is republished from The Conversation<\/a> under a Creative Commons license. Read the original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Martin Baloge, Institut catholique de Lille (ICL) Slowly but surely, calls for a wealth tax to finance the green transition are picking up in Europe, with a number of initiatives from different political movements put the issue (back) on the political agenda. In a September French parliamentary report, Jean-Paul Mattei of the MoDem group, part […]<\/p>\n","protected":false},"author":44,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5],"tags":[9092,1743,14470,6740],"_links":{"self":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/35349"}],"collection":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/comments?post=35349"}],"version-history":[{"count":2,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/35349\/revisions"}],"predecessor-version":[{"id":35375,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/35349\/revisions\/35375"}],"wp:attachment":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media?parent=35349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/categories?post=35349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/tags?post=35349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}