G20 finance ministers and central bank chiefs will be meeting down under in Sydney, Australia, later this week. Trade and banking will be high on the agenda, but tax reform may also be discussed, especially as the G20 is working on implementing ambitious plans to improve the sharing of tax information between members as a way to help clamp down on global tax avoidance and evasion.

Unpaid taxes have been making the headlines in Europe recently, with French President François Hollande going after the internet giant Google and arguing that “tax optimisation” strategies will not be tolerated in France. Germany, meanwhile, has seen two recent high-profile cases of tax evasion, including the embarrassing resignation of a senior member of the German Social Democrats.

Tax will also likely be an important issue in the European Parliament elections in May, with parties of the Left in particular arguing that public sector cuts wouldn’t need to be so biting if everybody in Europe just paid their taxes fairly (and, don’t forget, you can vote in our Debating Europe Vote 2014 for the party you support).

Last year, we looked in detail at the problem of tax evasion and avoidance in Europe (and we published an infographic on the topic). We had a comment sent in by David arguing that there should be EU-wide rules in place to fight against tax evasion:

The EU should implement laws that would allow tax evaders to have their funds repatriated by the nation state they refuse to pay taxes in, and serving the offenders a Europe-wide punishment in an easy, straightforward way

We took David’s comment to Theodoros Skylakakis, a Greek MEP who sits with the Liberal Democrats in the European Parliament. He argued that the real problem was that taxes in Europe are too high, and that a “European IRS” to replace the tax authorities of 28 different countries could help solve the problem:

At least some of our readers would agree that many European taxes are too high! For example, we had a comment sent in by George, arguing that tax evasion takes place wherever taxes are raised disproportionately to the ability of the citizens to pay and the social and other services offered by the state. We took this comment to Wolf Klinz, a German MEP who also sits with the Liberal Democrats in the European Parliament. Klintz believes the problem has little to do with high taxes, instead arguing that “some people just take pride in not paying taxes”:

Next, we had a comment sent in by Vincente, arguing that it would be “very easy” to stop tax evasion in Europe: simply stop the free movement of capital and let central banks control capital exports and charge tax on any money being sent out of the country. We asked Wolf Klintz to respond:



Ok, that’s what the Liberal Democrats think. But what about the Eurosceptics? We also spoke to Morten Messerschmidt, an MEP with the anti-immigration Danish People’s Party (which sits with the Eurosceptics in the European Parliament):

Well, I don’t think we should limit or ban the free movement of capital. I think the free movement of capital is one of the major factors in a modern economy that actually creates the wealth and benefits we all like. So, I wouldn’t go in that direction. I think rather we should engage with the countries or territories that are the problem – such as the Cayman Islands or whatever it might be – and sanction them in ways that would influence those countries that have power over these territories. It’s something we do in many ways when we want to achieve something outside of European jurisdiction. The Cayman island, for example, is part of the British Overseas Territories, so if we want to limit tax evasion, tax speculation and so on in the Cayman islands, we must find a way to sanction Great Britain for not doing anything about it. And that could be done within the EU, speaking of agricultural subsidies or other benefits the UK might have. I think that’s the way of doing it, instead of speaking of banning the free movmeent of capital.

Are taxes in Europe too high? Does the EU need a united “European IRS” rather than the tax authorities of 28 different countries? Or is the problem caused by EU rules on the free movement of capital, and would letting central banks control capital exports again do the trick? Let us know your thoughts and comments in the form below, and we’ll take them to policy-makers and experts for their reactions.



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