March 15, 2007 8:34AM

Tax Harmonization Equals Higher Taxes

The politicians and bureaucrats in Brussels argue that taxes have to be equalized to improve the “efficiency” of the market. They make this rather absurd claim and then vehemently deny that tax harmonization has anything to do with making taxes higher. So why, then, does every tax harmonization decision in Europe inevitably result in higher taxes? The latest effort to increase the minimum diesel tax in the European Union, as reported by the EU Observer, is ample proof that tax harmonization is about giving politicians more money and power:

The European Commission has tabled a controversial bill to raise the minimum duty on diesel from 2012, aimed at stamping out so-called fuel tourism ... Mr Kovacs's paper suggests harmonizing the minimum level of excise duties at €359 per 1,000 litres of diesel in 2012 and subsequently at €380 in 2014, something which would force 21 EU states to increase their current rates. ...fuel tourism cost Germany – believed to be the strongest advocate of the tabled proposal - €1.9 billion in 2004, as excise duties represent roughly between 30 to 60 percent of the pump price and are responsible for six to 18 percent of the running costs of a road haulage business.