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Is Brussels the New Borscht Belt?

Posted By J.D. Foster, Ph.D. On October 20, 2010 @ 12:00 pm In Economics | Comments Disabled

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Borscht Belt is a colloquial name for the Catskills Mountains in New York where famous comedians of the 1940s to 1960s would work their trade. Named after borscht, a beetroot soup popular in Central and Eastern Europe, the area was known for hotels and clubs that catered mainly to New York’s Jewish families and featured stand-up routines by the likes of Milton Berle, Phyllis Diller, and Jackie Mason. It was a golden age of comedy.

Recent evidence suggests that this may be where the distinguished parliamentarians of the European Union sitting in Brussels get their inspiration, because some of their ideas would make Phyllis Diller’s hair stand on end.

The latest nugget from EU stand-up café is the announcement that Brussels is looking into new tax options [2] to fund the $120 billion a year EU budget. For example, one popular proposal is a new European-wide tax [3] to ease the financial burdens on national governments. Some of the other wiz-bang ideas for financing a meta-national government in Brussels include a financial transactions tax, a carbon-emission tax, and an aviation tax [4].

The EU budget today is funded 76 percent by member countries based on the size of their economies, with the balance funded by a slice of national value-added tax revenues. This arrangement makes the EU government beholden to its member states for financial support, deeply cutting into its independence, which of course was the point all along.

So, to make life easier on struggling national governments, the EU proposes to become self-financing. It has kindly offered to undertake to impose its own taxes on European citizens so as to relieve the individual nations of the burden.

Two immediate results would follow if the EU were permitted to levy its own taxes. The first is that the EU taxes would compete with national taxes for revenues. This relieves national governments of nothing. Instead, it would exacerbate current fiscal pressures while simultaneously putting total Europe-wide spending on an even faster trajectory ever upward.

Second, it means the last great step toward a fully empowered meta-government in Brussels and the written epitaph of national governments. If this is what Europeans want, then they should say so. But given the difficulties Europeans have had with the ratification of a lesser construct, it seems pretty clear that most Europeans like their individual countries and want to see them preserved.

The Borscht Belt has long since faded away, overtaken by Las Vegas, Atlantic City, and changing demographics. If Euro-elites in Brussels can’t find anything more productive to do than tax policy stand-up comedy, then maybe Brussels will go the way of the Borscht Belt, too.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/10/20/is-brussels-the-new-borscht-belt/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/Europe090318.jpg

[2] new tax options: http://af.reuters.com/article/energyOilNews/idAFLDE69J17T20101020

[3] new European-wide tax: http://www.google.com/hostednews/afp/article/ALeqM5hZiXEzBQ-btGvgaX63JndLHL2r9Q?docId=CNG.d1ed550b2fc462fc20edac5d256b5591.1b1

[4] financial transactions tax, a carbon-emission tax, and an aviation tax: http://www.ft.com/cms/s/0/28f58052-dbb1-11df-a1df-00144feabdc0.html

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