Today we have in Europe a very complex and unfair tax-system. People with small and medium income pay much more taxes then mostly large international companies and a small group of very rich people. The tax-rates and systems are different in each country too.
Plan is to make in whole Europe one new transaction-tax with a rate of 10% and stop using VAT and all taxes and social premiums at labor (including self-employed) and welfare income. Only people who receive more income than 4 times minimum wage per year must pay a minimum of 52% income-tax at the part of the income what is above 4 times the minimum wage per year. There are no tax-deductions for this top-income-tax. Only 2% till 3% of the people will pay this top-income-tax.
By this new tax-system all organizations and all people have to pay 10% tax at almost all money they receive from someone else. People don’t have to pay this tax at labor and welfare income. For selling houses and financial transactions (buying / selling stocks, bonds, other financial assets and exchanging currencies) we can use a special financial transaction-tax rate of 2%.
This new transaction-tax collects enough money to pay in whole Europe the cost of:
- Basic public income for all children and students*
- Basic public pension for all people above 67 years old*
- Basic public sick-leave, disablement and unemployment benefits*
- Basic universal public free healthcare
- Basic universal public free education (from basic-school up to and including university level)
*Amount of money per person per month differs per country / region for the cost of living.
Policy must be to convergence in time to one amount person per month for whole Europe.
The idea we can stop using VAT and almost all taxes and social premiums at labor and welfare income when we implement the transaction-tax looks at first sight too good to be true. The reason why this is possible is because:
- we stop using almost all tax-deductions and exceptions
- VAT, taxes and social premiums paid at labor and welfare income only have to be paid at a transaction
amount of about 50% of GDP
- The general transaction-tax will be paid at a transaction amount of about 250% GDP (GDP + intermedium
use of goods and services + all received money for interest, dividend and intellectual property rights).
When people have to pay the transaction-tax at the labor and welfare income too, the transaction amount that will be used for the transaction-tax will be about 300% GDP.
In about ten years we will use almost only digital / electronic money. When we do so, we can collect the transaction-tax fully automated. The transaction-tax will then be far the most efficient, simple, fair, transparent tax-system we can make and use.
This proposal is part of European tax system