Ülo Ennuste Economics

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Perhaps Maastricht criteria will need some additions?

Perhaps Maastricht criteria will need some additions?

From Prof  Ülo Ennuste

Sir, Matti Vanhanen is absolutely right (FT June 17 “Europe will need to raise taxes in harmony”) claiming: “We should avoid tax competition and the damage this would cause to Europe’s economic growth.” Understandably this kind of damage comes first of all from incompetent competition instead of rationally coordinated cooperation between the partner countries, as e.g. Prof Krugman has proved.

But as a PM, Vanhanen is certainly not in the position to propose or design implementation mechanisms for optimally coordinated taxing systems. But perhaps it would be at the moment most convenient just to add some new clauses to the Maastricht criteria `a la:  taxes on earned capital income should not be less x% and/or value added tax must not exceed y% etc.

Ülo Ennuste,

Tallinn University of Technology,

Tallinn, Estonia

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June 19, 2009 - Posted by | Uncategorized

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