- Truths and Realities:
Tax harmonization will result in a raise in Britain's income tax to 53%.
This rumor was spawned by the assumption that Britain will be forced to
increase public spending by 7% of its GDP to match the EU average. No
such move is planned and there is nothing in any EU treaty or rules about
the single currency that would allow anyone to impose such a thing. The
EU lacks the powers to set common income tax or corporation tax rates and
as of yet no one is seeking to do so.
Value Added Tax will be placed on food and children's clothing driving up
the price of raising our children:
There have been no proposals made that threaten Britain's policy on
zero-rating. Zero-rated items are goods such as food and children's
clothes. What is happening however is a movement to add VAT on goods in
intra-community trade or exports from one EU State to another. It also
addresses the need to clamp down on fraud and tax evasion.
- Benefits of Tax Harmonization:
Ending Corporate Flight: First, the EU's tax harmonization efforts are
necessary to end harmful tax competition. Tax harmonization would mean
that businesses will pay the same taxes in Germany as they would in
Britain. Tax harmonization will prevent corporate flight. Companies will
keep their business in Britain and not abandon us for another European
country that offers better tax rates.
Generate Extra Tax Income for Britain's Government:
Second, most tax
harmonization will concern only investments by citizens of one EU State in
another EU State. Tax harmonization will not effect our ordinary shaving
or shareholdings. What tax harmonization truly amounts to is an attempt
to stop cross-border tax evasion by giving details of dividends and
interest payments to the tax authorities in the investor's home country.