Article URL: https://www.socialeurope.eu/europes-ultra-rich-could-fund-a-substantial-part-of-the-eus-budget Comments URL: https://news.ycombinator.com/item?id=49084515 Points: 5 #…

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. Expanding genuine EU own resources — that is, revenue that does not come directly from national budget contributions but rests on common European levies or cross-border tax bases and is permanently assigned to the EU budget — could partly break with this logic. On the one hand, the Commission’s proposal for the 2028–2034 EU budget includes channelling 30 per cent of the revenue from the Emissions Trading System (ETS) and three-quarters of future revenue from the Carbon Border Adjustment Mechanism (CBAM) into the EU budget. On the other hand, it includes a levy on uncollected electronic waste, a European tobacco tax and a new corporate contribution. Together with adjustments to existing own resources — such as reducing the share of customs revenue retained by member states and increasing the plastic levy — these measures are intended to generate an additional €58.2 billion in annual revenue. The plans presented by the European Commission have, however, already encountered reservations in several member states. It therefore makes sense to consider options that go beyond the Commission’s current proposals. Our study assesses both the own resources proposed by the European Commission and a range of alternative options, evaluating them according to criteria that include their European dimension, their distributional effects, their suitability for addressing environmental and societal externalities, and their revenue potential.