The problem

As policy-makers strive to boost the European economy and to reduce socio-economic disparities between countries of the recently enlarged European Union, an opportunity has arisen to compare the tax-benefit systems of the various Member States and to examine how they support or hinder these efforts. In-depth analysis of the underlying mechanisms may suggest ways to harmonise these systems within the EU so as to maximise desirable impacts. A focus on growth, employment, sustainability, and processes linked to Union building would also contribute to such an analysis.

Overview:

Using a variety of models and analytical approaches (a computable general equilibrium model, a gravity model, heterogeneous panel data models, econometric analysis, etc.), the TAXBEN partners will focus on:

• links between tax-benefit systems and employment
  in the EU
• EU tax systems under tax competition and enlargement
• Tax-benefit systems in relation to the growth potential of the Union
• the macroeconomic role of national tax systems in promoting tax reforms under the single monetary policy
• achieving sustainable and environmentally friendly growth in the EU
• the role of green taxes and emissions trading in the energy sector

Contribution to policy development:

• TAXBEN will support the Lisbon process by exploring the links between tax/benefit systems and “a dynamic, sustainable (...) economy enjoying full employment and strengthened economic and social cohesion”
• The work will contribute to employment policy by highlighting tax/benefit reforms likely to enhance employment
• The project will help to build a knowledge base in support of tax harmonisation in the euro area and the enlarged Union

Project deliverables

• Tax benefits, labour markets, and employment policy: workshop; three working papers
• Tax-benefit systems under tax competition: workshop; three working papers
• Tax-benefit systems and growth potential: workshop; two working papers
• The macroeconomics of tax systems under the single monetary policy: workshop;
  four working papers
• Green taxes and sustainable development: workshop; five working papers

Dissemination

• A project web page, to be hosted on the website of the European Network of Economic Policy Research Institutes (ENEPRI – http://www.enepri.org) – ongoing
• Scientific publications and presentations – ongoing
• Reporting on project activities in the ENEPRI newsletter – ongoing
• Final report and conference for EU policy-makers – Month 22

Technical information

Project acronym: TAXBEN
Project’s official full title: Tax/benefit systems and growth potential of the EU
Research priority: 3.1. Impacts of tax/benefit levels for the pursuit of sustainable development, employment, pensions, social cohesion
Specific webpage: Not yet available
Proposal/contract no: 502639
Start date: 01/12/2004
Kick off meeting: 21/01/2005
Completion date: 30/11/2006
European Commission scientific officer: Ian Perry (ian.perry@ec.europa.eu)

Coordinator:
Name: Daniel Gros, Centre for European Policy Studies
Abbreviated name: CEPS
Address: Place du Congrès, 1
B-1000 Brussels
Country: Belgium
Tel: +32 2 229 3911
Fax: +32 2 219 4151
Website: www.ceps.be

Partners

Name: The Research Institute of the Finnish Economy
Abbreviated name: ETLA
Country: Finland 

Name: Centre d’Etudes Prospectives et d’Informations Internationales
Abbreviated name: CEPII
Country: France 

Name: Centre d’Etudes Prospectives d’Economie Mathématique
Abbreviated name: CEPREMAP
Country: France 

Name: Netherlands Bureau for Economic Policy Analysis
Abbreviated name: CPB
Country: The Netherlands

Name: Konjunkturinstitutet
Abbreviated name: NIER
Country: Sweden

Name: Centre for Policy Studies
Abbreviated name: PRAXIS
Country: Estonia