Building up the EU Revenue Side: But What Is a Tax in EU Law?

Abstract

While the US Constitution expressly grants the federation the power to tax, Article 311 TFEU is silent on whether such power exists at the EU level. This contribution argues that the Union has the power to tax, provided that the chosen resources in the basket match the objectives and policies of the Union. Since the achievement of the internal market is a shared competence (Article 4 TFEU), the Union can decide the level of resources tailored to this goal. Although the Union has a broad power to tax under Article 311 TFEU to pursue its objectives and policies, the member states are still the "masters," able to decide the level of resources under the unanimity rule. To resolve this paradox, this contribution embraces a democratic legitimacy of EU taxes that grant the European Parliament the power to decide the revenue side of the EU budget. EU democratic taxes approved by the European Parliament could reaffirm the redistributive function of taxes, thereby allowing the redistribution of wealth from rich to poor.