Tax competition V Tax Harmonization in an enlarged European Union Research Proposal

Tax competition V Tax Harmonization in an enlarged European Union - Research Proposal ExampleSome people believe tax harmonization creates unity and a level playacting field, some believe its stifles competition and creates a socialist economic bloc. In this thesis I will examine both sides of the argument by face at how the debate and policy has evolved over the years with a specific focus on how tax harmonization affects multinational corporationswhether it encourages them to invest in the EU or to pull out.Part of the basis of the European arrangement was the centralization of monetary policy. This was a huge amount of sovereignty for individual countries to give up. The hypothesis underlying this ceding of power by national governments really is that all economies within the European Union are created equally and the same measures for each saving are the appropriate way forward. This itself was controversial enough, but at the time left the national governments to at least se t their own tax grade and compete for business by having differing corporate tax rates. This idea too soon bit the dust. Countries like France and Italy with high corporate tax rates were greedy that a country such as Ireland with a natural depression tax rate was able to drum up so much business. They began to push for a single minimum rate across the whole of the EU. For high tax countries this levelled the playing field, but forcing more competitive countries to become less sofor low tax countriesoften with much smaller economies to begin withthey had to punish companies that had come to them in the first place seeking a safe haven for investment.The bare(a) knee-jerk logic is this As factor mobility increases within the EU, pressure will be placed on member states to lower their tax rates on erratic factors in order to attract business. This unchecked competition will lead to a race to the bottom in which tax rates will lapse so low as to threaten countries abilities to su pply public goods. In response, one might argue for the necessity of strict