Modern taxes and post-national States

• Author: Adriano Di Pietro
• Pages: 1-21

Studi Tributari Europei 1/2016!

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Modern taxes and post-national States*

Adriano Di Pietro1

1. Taxes and modern States: a necessary hendiadys

Financing public expenses through taxation and the existence of the modern

States represent an hendiadys which is nowadays recognized as necessary.

In the European experience and tradition, taxation has always aimed at

financing public expenses. It is an indispensable source of financing for the

modern countries; it is indispensable for the sovereignty and is strictly

intertwined to the territory on which the State, as a sovereign entity,

exercises its competences, in the plurality and with the distinction of public

functions, but also with the authority and strength, of which it has the

monopoly, to exercise them.

In Europe taxation has been crucial for the full expression, development and

consolidation of modern States. It supported an extraordinary financial effort,

the one necessary in order to finance the two Wor ld Wars, and the one in

order to support the post-war reconstruction. Then, with the peace and the

new Constitutions, taxation served to sustain the idea that taxation could

contribute to build social justice, a social justice which is necessary in order

to pursue the substantial equality between the citizens, not only the

taxpayers, also thanks to the redistributive role of progressive taxation.

In the last century the ability to contribute of the taxpayers has been

measured taking as a starting point some indicators such as income, heritage,

consumption, production, trades; these are expressions of an economic

model and benefited from a market that was allegedly national. With the

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* How to quote this article: A. DI PIETRO, Modern taxes and post-national States, in Studi

Tri bu ta ri Europei, 2016, n. 1, (ste.unibo.it), pp. 1-21, DOI 10.6092/issn.2036-3583/7822. !

1!Adriano Di Pietro, Full Professor in Tax Law at the University of Bologna, Tra ns la ted by Alessia

Fidelangeli, PhD student in European Tax Law at the University of Bologna (paragrafhs from 1

to 5 e paragrafo 9) and Piera Santin, research fellow in Tax Law at the University of Bologna

(paragrafi 6, 7 e 8).!

Studi Tributari Europei 1/2016!

!

© Copyright Seast – Tut ti i diritti riservati!

2!

consequent creation of constellation of taxes whose existence resists also

within the Internal Market notwithstanding the fact that national States lost

the linkage between the territory where to exercise sovereignty, including tax

sovereignty, and the economy and market, on which it originally relied.

2. The welfare States emphasizes the financial role of the tax without

modifying its structure

The improvement of the personal, social and employment conditions of the

citizens becomes the ambitious aim of welfare States. This reinforces both

the social services and Europe, together with the economic integration and

with the affirmation of the European legal system. The final aim is to support

an economic development whose purpose is to improve the employment and

to facilitate the fluidity of the labour market, rather than increasing the

income of the shareholders and investors. The success of these objectives

relied on the adequacy of the public funding. This entailed a leading role of

taxation, as it appears from the entity of the tax burdens. However, the tax

burden did not experience radical changes but only gradual changes which

were in turn influenced by the changes in the national level of wealth,

especially in the last years of long economic and financial crisis. Hence, the

financial role of those indicators of wealth such as consumption, income,

heritage, production and trades, that, in Europe, since last century, have

enriched the constellation of national taxation, improved. This type of wealths

were considered as objects of taxation in the traditional structure of the tax.

For sure their financial relevance vari ed depending on the national fiscal

policies. In fact the latter ones sometimes gave greater relevance to direct

taxation, sometimes to indirect taxation, also depending on the development

of the economy, even though this is less and less national, that sometimes

supports and sometimes suffers from trades, consumption and profits. Also,

the social burden of these wealths varies depending on how it is distributed

among the citizens; depending on how the Parliament decides to split the tax

burden. All this takes place taking into account the parameter of social

solidarity and also of financial solidarity that, considered by the Constitution

as a guarantee of the State as a community, had already forgotten the