Description
For decades after establishing the EU, member state representatives, policymakers, business representatives, members of the European Parliament, academic experts and numerous others have discussed why and how the EU should harmonize corporate tax systems. In 2011, a concrete legislative proposal – the Common Consolidated Corporate Tax Base (CCCTB) – was put forward after over a decade of development. While negotiations seemingly went nowhere, the idea was slightly modified and then re-launched in 2016. This paper argues that the re-launch of the CCCTB as an anti-avoidance tool in 2016 can partly be explained by the rise of a centre-left project that successfully politicized the issue of corporate taxation since 2012 – well after the global financial crisis. However, the structural power of capital, manifested amongst other things in the existing network of tax havens and the continued ability of mobile capital to shift profits, proved decisive in the prevention of any political agreement on adopting the CCCTB. Assuming a historical materialist policy analysis, this paper explores not only the struggle over corporate taxation between capital and a centre-left project and how this materialized through EU institutions, but also unravels the overlapping as well as opposing interests of different capital fractions. In doing so, it shines a light on how the ‘case of taxation’ can expose the persistent need for national borders – and, thus, states – within a neoliberal project, while the latter is often characterized to be solely focused on globalisation and liberalisation of capital flows. Drawing on 28 expert interviews and an in-depth analysis of meeting reports of the Council of the EU, this paper contributes to our understanding of how underlying power relations shape tax policy, because it regards the state not as an actor itself, but as the terrain through which the struggle over taxation materializes.
