EU 2020 = US in 1913?

With regard to the EU’s own financial resources, Europe is taking another page from U.S. financial history.

 
By Jacob Kirkegaard,

The European Union has begun to contemplate how its perhaps €500 billion new joint debt to help the economies of its member states recover from the pandemic will eventually be repaid.

In this context, a profound fiscal question arises: Will new sources of direct EU revenues be agreed to repay the debts, or will member states be asked to contribute more funds to do so?

 
Taxation and self-identity

While there isn’t much “love” lost between the Trump administration and the EU, the latter can, somewhat ironically, turn to U.S. history, in this case the time of the late 19th and early 20th centuries.

As is this case with the EU level in Europe now, the U.S. federal government had not yet acquired the right to levy direct income taxes on Americans.

By far the most important source of government revenues in advanced democratic economies comes in the form of the taxes levied on the incomes and consumption of the resident population.

And a relatively straightforward relationship exists between the level of taxation that people willingly allow their elected governments to extract from them and the strength of their identification with the government that imposes those taxes.

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Πηγή: theglobalist.com