Taxation Trends in the European UnionSource: www.ec.europa.eu2009 Edition (Adapted)
This year's edition of the
Taxation Trends in the European Union appears at a time of upheaval.
The effects of the global economic and financial crisis have hit the
European Union (EU) with increasing force from the second half of 2008.
Given that the last year for which detailed data are available is 2007,
this year's report cannot yet analyze the consequences of the recession
on tax revenues. Nevertheless, the report takes stock of the tax policy
measures taken by EU governments in response to the crisis up to spring
The European Union is, taken as a whole, a high tax area. In
2007, the overall tax ratio, i.e. the sum of taxes and social security
contributions in the 27 Member States amounted to 39.8% of GDP. This
value is about 12 percentage points above those recorded in the United
States and Japan.
The high EU overall tax ratio is not new, dating back
essentially to the last third of the 20th century. In those years, the
role of the public sector became more extensive, leading to a strong
upward trend in the tax ratio in the 1970s, and to a lesser extent also
in the 1980s and early 1990s.According to paragraph 3, the role played by the public sector