Reducing taxes

Governments demanding less of their financing from their citizenry.

In 1999, the European Union decided to authorize member states to apply VAT at a reduced rate to certain services provided locally. The member state governments were able to choose from up to three types of services from a list of five. First on the list were repairs to such items as bicycles, shoes and other articles in leather, clothing and household linen. The renovation of private homes was next on the list. The third group of services included window cleaning and household tasks. The fourth and fifth types of services were those of hairdressers, on the one hand, and home help, including help with children, the elderly and the sick, on the other. This reduction of VAT rate on services aimed to encourage consumers to use them, without resorting to moonlighters, often numerous in the sectors in question. Besides, the lower rates were to stimulate job creation, given that all the activities in question required labour, not machines. The system was planned to operate from January 2000 to December 2002.

Bureaucratic inefficiencies and misguided spending policies have increased the tax burden intolerably. Efficiency programmes in government and reducing spending, especially for military purposes, would lower the income needs, and hence the taxes required.

Reducing government income reduces government services in most cases.