Taxes and spending in the "Fairer Europe" proposal by Thomas Piketty et al (source; click to enlarge). Notice the emphasis on addressing climate change, both on the tax side and the spending side. by Gaius PubliusThomas Piketty, the anti-neoliberal French economist most famous for his groundbreaking book Capital in the Twenty-First Century, has spearheaded a proposal for a "fairer Europe" which includes a thorough revision of both its political structure — the proposal includes a new sovereign governing body — and its economic structure, the fairer Europe ("a new model to ensure the fair and lasting social development of its citizens") that its authors hope to create.The proposal is in the form of a manifesto (English version here), and there are two Guardian articles about it, one by Piketty himself that largely repeats the language of the manifesto, and one about the proposal by Jennifer Rankin, from which the above graphic was taken. True to its author, the proposal is decidedly anti-neoliberal as well. This piece will serve to give you a taste of what the proposal offers. Much of the summary below is taken from the Rankin article, but please click through to the manifesto itself and read its detail for yourself. A word of caution: Before dismissing the idea as impractical or politically impossible, consider the large revolutionary changes that have already occurred — Trump, Brexit — because people on both sides of the Atlantic are desperate for structural disruption of the status quo. The push against the old order (for example, though in a rather mixed and muddle way by the gilets jaunes movement against Macron in France) isn't going away.It's going to be important, therefore, to put healthy-for-democracy alternatives to the old order on the table, not just angry, fascist, Trumpist ones. This is a Sanders-type change proposal in an European context.From the Rankin article:
Group led by Thomas Piketty presents plan for ‘a fairer Europe’Manifesto by progressive Europeans calls for €800bn of levies to tackle inequality, disillusionment, climate change and migrationA group of progressive Europeans led by the economist and author Thomas Piketty has drawn up a bold new blueprint for a fairer Europe to address the division, disenchantment, inequality and rightwing populism sweeping the continent.The plan, crafted by more than 50 economists, historians and former politicians from half a dozen countries, includes huge levies on multinationals, millionaires and carbon emissions to generate funds to tackle the most urgent issues of the day, including poverty, migration, climate change and the EU’s so-called democratic deficit.Published as the British parliament is set for a climactic Brexit vote, the “manifesto for the democratisation of Europe” says EU institutions are stuck in “a technocratic impasse” that benefits the rich.“Following Brexit and the election of anti-European governments at the head of several member countries, it is no longer possible to continue as before,” says the document.
That much is certainly true. The need for the West to adapt to the unrest that threatens it unarguable. About the proposal itself (my emphasis throughout):
At the heart of the manifesto is a call for a European assembly that would have a budget of up to €800bn a year, financed by taxing corporate profits more effectively, as well as [taxing] income and wealth.The EU has been accused of failing to address the manifest unfairness of huge multinationals such as Apple, Google and Amazon channeling profits through member states where taxes are lowest.The budget would be worth 4% of the EU’s GDP – four times the current budget. Funds would be raised from four sources: an extra 15% levy on corporate profits, tax increases on individuals earning more than €100,000, a wealth tax on personal fortunes above €1m, and a tax on carbon emissions.Half of the proceeds would be returned to member state governments. A quarter would go to research, innovation and education. A fund to better manage migration and a fund to make agriculture and industry greener would also benefit.
About implementation:
Insisting they do not want a “transfer payments Europe” [a Europe in which significant amounts of money flow from some countries to others], countries would see only a 0.1% difference in what they collect and get in return – a big difference from proposals for a eurozone budget that many economists see as a long-term necessity for the 19-country bloc.The money would be overseen by a new European assembly consisting mostly of national politicians and some MEPs. While the assembly would be in touch with EU institutions, it would sit outside EU treaties and have the final word on spending.
In other words, the new assembly would not destroy the existing European institutions, but sit on top of them. More about the new assembly from Piketty himself:
Because we must act quickly but we must also get Europe out of the present technocratic impasse, we propose the creation of a European assembly. This will enable these new European taxes to be debated and voted as also the budget for democratisation. This European assembly can be created without changing existing European treaties.The assembly would, of course, have to communicate with the present decision-making institutions (in particular the Eurogroup in which the ministers for finance in the eurozone meet informally every month). But, in cases of disagreement, the assembly would have the final word. If not, its capacity to be a locus for a new transnational political space where parties, social movements and NGOs would finally be able to express themselves would be compromised. Equally its actual effectiveness, since the issue is one of finally extricating Europe from the eternal inertia of intergovernmental negotiations, would be at stake. We should bear in mind that the rule of fiscal unanimity in force in the European Union has for years blocked the adoption of any European tax and sustains the eternal evasion into fiscal dumping by the rich and most mobile, a practice which continues to this day despite all the speeches. This will go on if other decision-making rules are not set up.Given that a newly created European assembly would have the ability to adopt taxes and to affect the very core of the democratic, fiscal and social compacts of states, national and European parliamentarians must be central. This is why we propose, in the democratisation treaty available online, that 80% of the members of the European assembly should be from national parliaments, with 20% from the present European parliament. This choice merits further discussion. In particular, our project could also function with a lower proportion of national parliamentarians (for instance, 50%). But in our opinion an excessive reduction of this proportion might detract from the legitimacy of the European assembly in involving all European citizens in the direction of a new social and fiscal pact, and conflicts of democratic legitimacy between national and European elections could rapidly undermine the project.Thus national elections will de facto be transformed into European elections. National elected members will no longer be able to simply shift responsibility on to Brussels and will have no other option than to explain to voters the projects and budgets they intend to defend in the European assembly. By bringing together the national and European parliamentarians in one single assembly, habits of co-governance will be created which at the moment only exist between heads of state and ministers of finance.
I haven't captured all the detail here. Again, please read the manifesto itself and/or Piketty's article describing it. Notice that the goal of the proposed tax isn't to create a pool of money that passes from some countries to others, but to redistribute resources within countries — from the wealthy, high income-earners, largest corporations and from carbon emissions, to those whom the wealthy starve of resources. In other words, it's a tax that serves the good of the mass of the everyone else. The proposal can be adopted by any country that wishes to do so, and it takes effect for those countries, if I read the proposal correctly, so the idea won't get stuck in a ratification process, as is the case in the U.S., for example, with proposals like Equal Rights Amendment to the Constitution.It's an interesting concept, and I think it has "legs." Piketty's reputation will ensure it gets a hearing, and the usual enemies of anti-neoliberal change (whom Rankin's article quote at some length) are already in arms against it — a good sign that it actually threatens what they live to protect. This Piketty proposal is something to watch as the old world continues to crash and a new one struggles for birth.GP