Voters, Peter Mack warns anyone who wants to abolish the veto in the EU

06/06/2024 20:02 | Conversation

Petr Mach, leader of the European candidate SPD and an economist, fears that from the statements of economics professor Danusa Nerutova, one cannot form a clear idea of ​​what he really wants. “Whatever he has in mind, I don’t want the Czech Republic to become a guinea pig for his disturbing ideas.” A majority vote on its budget revenue.

Voters, Peter Mack warns anyone who wants to abolish the veto in the EU

Hans Stumpera

Description: Excerpts from Politics: Political Scenario in 2024. Is that right? Discussed by Tomio Okamura and Petr Mach

I was interested in your televised debate with Dhanusa Nerutova on maintaining independence in taxation. Mrs. Nerud said he wanted to leave taxes in the independent capacity of member states, but then he got caught up in the interpretation of EU capital market and corporate taxes. Translated into layman’s language, what does the head of the STAN candidate refer to?

Mrs. I can honestly say that I am not very familiar with Neruda’s statements. It seems to me that they often contradict each other. The area of ​​taxes is one of the few last areas where the EU still decides on unanimity, meaning that each state can veto the Commission’s proposals. Mrs. Nerud once said he wanted to leave the taxes at the national level, then he said he wanted to shift part of the taxes in the EU to qualified majority decision-making, meaning the abolition of the right of veto.

Ms Nerudova also spoke about the fact that the Green Deal should be funded from the proceeds of this tax. Given how expensive this “decarbonization” plan is going to be, do you think it’s realistic that corporate taxes could pay for it all?

We must realize that emission allowances are actually taxes in disguise. The European Union ignored consensus policy when it called the payments of companies from power plants, heating plants, glass factories – and gradually other parts of the economy – not “taxes” but “allowances” from CO2. It has the same effect as a tax, which affects companies and consumers and goes into EU and national budgets. We can already see how harsh this is for companies and residents, so it seems to me from another planet that they want to pile higher taxes on the altar of the Green Deal.

Ms Nerudova also talked about replacing the veto with a qualified majority, including on taxes. What does it really mean for the EU’s majority member states to be able to dictate what their budget revenues should be?

The EU has already set minimum electricity tax, cigarette tax, gas tax, beer tax, alcohol tax and minimum VAT rates. Ms. said that the EU should somehow decide on corporate income tax rules. Nerudova now calls. If taxes were to be changed to a majority vote as Ms Nerudova wanted, at least 15 of the 27 states would be enough to oppose the Czech Republic. This is how the Treaty of Lisbon was introduced. For larger states it is easier to override smaller ones. In my opinion, Czech voters should whip anyone who wants to repeal the right of veto!

The classic argument for this transfer of power is that when capital is transnational or global, its regulation and taxation must be transnational. What do you see as an alternative to multinational companies not being able to export their profits, as is apparently happening in the Czech Republic?

Capital can move around the world and various taxes are not a barrier. People and companies invest here in America, here in China, here in the Czech Republic – and various taxes do not interfere in any way. For too long, I have been critical of so-called investment incentives, when our governments gave tax holidays to huge corporations. I called for a uniform corporate profit tax in the Czech Republic, the same tax for everyone. Let there be a flat tax somewhere in between instead of zero tax for a select few and high tax for the rest. That’s what I always think.

However, we should retain the right to have taxes set by the Czech Parliament, not Brussels! The problem with Czech tax evasion abroad is that the tax authorities only lightly check the false invoices between a subsidiary in our country and a parent company somewhere in Cyprus, reducing the tax base fraudulently. It is enough for our tax authorities to detect these so-called “transfer payments”.

If the Czech Republic is unlikely to set up its own tax revenue, what does that mean for our economy?

It is important to realize that when the EU sets minimum tax rates, it does so to suppress tax competition. Because of the EU, taxes on cigarettes and petrol had to be raised so that Germans wouldn’t come to the shop, and thus taxed us. So is the EU attempt to set income taxes. The Germans and the French don’t want their companies to go to us for lower taxation.

Ms. Neruda’s argument was somewhat confusing. And this is not the first time. Do you think this economics professor with a research focus in taxation is clear about what he really wants to achieve in this area?

It remains a great mystery! From his statements, it is impossible to form a coherent idea of ​​what Professor Nerudova really wanted. Whatever he has in mind, I don’t want the Czech Republic to become a guinea pig for his confused ideas.

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Author: Jakub Vosáhlo

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