Tax cuts suddenly fashionable in Europe

A decade ago it seemed that “tax cuts” was an extremely rude phrase in most of Europe. Not any more.

– Germany is looking at tax cuts.
– France is looking at tax cuts.
– Italy is talking tax cuts.
– Finland is cutting taxes.
– Sweden is rolling out tax cuts.

Most of these tax cuts are modest. However it does seems that tax cuts are no longer the height of rudeness in Europe. You can say “tax cut” and get elected.

The EU has a common currency and represents a free trade block. It allows for the free movement of labour. The central government of the EU (they are still in denial about calling it a government) has no direct tax powers. This sort of environment is ripe for a case of virtuous tax competition. It will be interesting to see what knock on response the current round of tax cuts spark.