Germany fuelling tax competition
"Eurostat has a new statistic on tax developments in the European Union published EU27 , which shows that between 2000 and 2008 Germany has moved from being a "victim" of the cut-throat competition for the lowest taxes on capital into a "perpetrator."
Eurostat notes that the average tax rate has fallen in the EU-27 since 2000 (40.6%) to 39.3% of GDP in 2008 (Germany is exactly average: 39.3%). The figures also show a continued decline in the top rate of corporation tax since 2000 (31.9%) to an average of 23.2% today (2010). Similarly for Income Taxes: In 2000, the average top tax rate amounted to 44.7%, today it is now only 37.1%.
According to Eurostat, the implicit tax rate on capital in Germany fell from 28.4% in 2000 (EU average: 25.1%) to 23.1% in 2008 (EU average: 26.1%).
Germany has clearly opted for an aggressive international tax strategy that leaves it with little legitimacy in the fight against tax havens.
Endnote: this English blogger grudgingly congratulates Germany on its football victory yesterday. We can reveal, courtesy of this Suddeutsche Zeitung photo, how they did it. Hat tip: Markus Meinzer.