ISBN Taxing Capital Income in the European Union ( Issues and Options for Reform ) book

Following the introduction of the euro the European Union has started to debate the desirability and feasibility of more co-ordination in the field of capital income taxation. In contrast with product taxes the EU Treaty does not provide for explicit authority to harmonize income taxes. So far little co-ordination has taken place even though the capital income tax base is much more mobile and hence more difficult to tax than is for instance consumption (and labour). There is much discussion on a minimum withholding tax on interest and on a code of conduct for business income taxes but in practice little real progress is being made in aligning the various capital income taxes. More fundamentally a broad tax-policy type of discussion on whether where and how capital income should be taxed is lacking. The papers in this volume try to fill this void. Roger Gordon addresses the question of whether or not capital income should be taxed. Subsequently Peggy Musgrave and Richard Bird / Scott Wilkie try to come to grips with the question of where capital income should be taxed–in the member state of source or the member state of residence. Michael Devereux and Harry Huizinga / Søren Bo Nielsen then analyse various issues that arise in taxing equity income and imposing a withholding tax on interest. Next Stephen Bond and Sijbren Cnossen discuss specific comprehensive proposals for taxing capital income in open economies. Finally Scott Newlon and Charles McLure / Joann Weiner look at the difficulties of and alternatives to maintaining separate corporate income taxes in the EU. This introductory chapter summarizes the various papers and briefly discusses the basic issues and solutions.