The discussion continues -- Max: I would argue [that] coordination of the VAT would be a progressive step towards more comprehensive tax coordination in the EU, including the taxation of capital and EU-wide taxes (the latter of which would probably finance fiscal aid to low-income regions in the EU). My view depends to some extent on the premise that the distribution of the tax burden is not as important as the distribution of the fiscal system -- taxes and expenditures -- and most any tax will do in making possible a larger public sector and greater redistribution. Sid: You are arguing this in the abstract, Max. Yes, indeed, all of this would be *possible*. It just so happens, however, that the kind of changes that are occuring in Europe have nothing to do with a fiscal system that is part of a larger effort to grow the public sector or redistribute wealth or income. It is the institutionalization of neoliberalism, with its attendant privatization of public assets and services and cuts in public expenditures, that lies at the core of this effort. Sid: > [Your] view of the European project is counter-intuitive, given the > neoliberal thrust to reduce taxation and other social obligations. Do you > have any evidence that would back up this view? Max: Yes -- the extent to which nations with less jurisdictional fragmentation or greater centralization of fiscal systems have larger public sectors, and up to a point bigger is better.... Sid: Max, I'm really having problems with your analysis. It strikes me as rooted in wishful thinking. How do you reconcile your hopes with what is actually happening in the context of European neoliberalization? Max: I do think unification provides some (not all) of the preconditions for more progressive taxation, even though all eyes are currently on the VAT, as well as redistributive fiscal policy among regions. Sid: How about elaborating on how the reactionary project that is currently being pursued by forces sympathetic to capital will open the way for qualitatively different, progressive results? (More from Sid in earlier message quoted by Max): >Suffice it to say that there is a great deal of skepticism that this is the case, > not a small amount of which has been expressed here on Pen. A great > deal of communication exchanged hereon has argued that this is, in fact, > the opposite of what is happening in Europe. Max: I've been watching and there hasn't been all that much talk here (PEN-L and PKT) about the EU. Moreover, my impression is that the social-democratic left in Europe is quite divided on this. Sid: Max, old boy, you are a recent addition to the Pen family. Prior to your arrival, there was a huge battle over the merits/demerits of NAFTA (that's going back ten years) and then the merits/demerits of European unification (a more recent discussion). In both of these disputes, Trond Andresen and I were among the proponents of what Tom Weiskopf characterized as the "progressive nationalist" position, while those who favoured both NAFTA and European unification were called "progressive internationalists." (It was out a desire not to repeat both of these heated and lengthy series of exchanges that I argued against the recent proposal to re-open them.) Sid: > I am one of the folks who has consistently taken the latter position. Given > the increasing social unrest across Europe, with concerns about > undermined social safety nets, higher unemployment, etc. that is seen as a > direct result of European unification along neoliberal lines, it seems to me > that the burden of proof is on those progressives who maintain that > opposition to European unification is "unreasoning". Max: To me the lesson of this is that form is prior to content, and, taking a logical leap to the present context, that federation is prior to a united social- democratic Europe. Sid: So let me see if I've got this right: the folks who are in desperate straits in Europe, due to rising unemployment rates and beseiged social safety nets -- which are not indirectly related to the terms and conditions of membership in the EU requiring countries who want to become members to reduce their fiscal deficits to 3% of GDP -- should take the long term view and realize that they are just short term casualties in an effort which will create a form that may ultimately lead to a social democratic Europe?
