 Welcome everyone. Once again, let's talk about politics and governance. We focus on this big question. Does the European Union have the power to tax? I have invited my speaker today, Ricardo Garcia Anton from Tilburg University, and I've invited Ricardo to help us navigate through the legal arguments for and against EU taxation. I want to discuss, of course, the implications for democracy and political legitimacy. Ricardo, welcome to our episode. Thank you very much, Rodrigo, for this kind of invitation. And yes, indeed the topic of whether or not the Union has the power to tax is extremely relevant today. As the speaker, the audience knows, I mean, it's clear that the Union right now does not have enough resources. Why? Because 70% of the resources that the Union has in the budget are basically contributions of the member states. So the idea of this paper, of this contribution was to research whether or not the Union has a power to tax. Therefore, I think also, maybe you asked me about the legal basis. Well, the research, and I think it's nice to put it in that way. The research tried to enter into the legal meaning of approvision in the treatise, article 311, that only speak about resources, but not taxes. Of course. So some research, so following what you said, some research was still needed also on how to reconcile the European Union's power to tax with the member states sovereignty. Yeah, yeah, because at the end of the day when you talk about taxes, the member states are extremely reluctant to give away sovereignty. So what is happening right now, that the Union is still a sort of prisoner, but put it in that way, a prisoner of let's say the member states. Why? Because the member states are the ones deciding the budget, let's say the expenditure side. And on the other hand also, they are in charge of the revenue side because the unanimity rules is needed to approve the new resources for the Union. So that means that if the Union depends on the member state to define policies and take, let's say, get the money, well, at the end we don't have autonomy. So this is the important, this contribution tried to shed light on whether or not the Union has this power to levy taxes. Of course. So you have given us a short, on point, promising background. So let us know now the most important findings or highlights of your study. Yeah. Well, the most important highlight, let's say, highlight from this research is that in article 311, the treaties speak about resources. Resources is a word that is quite common in international organizations like United Nations, NATO, etc. Well, in the Union now, we are not any longer in an international organization. We are beyond an international organization. The Union is a super national entity. So therefore, what I see in my research that article 311 speak about resources, very general, very broad. If we take the definition of taxes that the Court of Justice has handled in case law regarding, in this case, taxes of the member state, we came up to the conclusion that the concept is extremely broad. Therefore, in my article, I argue that taxes fall within this broad category of resources. But of course, then we have the unanimity rule. So new taxes. Can the Union levy new taxes? Yes. But of course, the unanimity rule will make or we can block, let's say, this initiative. This is the, let's say, the most important finding, like at the end, the Union has to follow the policies. Therefore, with the new environmental taxes, let's say the plastic, recycled plastic, plastic tax is for the first time a political resource. In the mean that the Union has a competence on environmental issues, fights against climate change, so environmental policy. And we have a resource that is this plastic tax to, let's say, compensate for this. Compensate is not the word, let's say, to get funds for this policy. So we clearly see a relationship between Union policy, Union competence on environmental issues and resource to pay for. So this is the important, let's say, the important action that we clearly see in the new design of resources. So the next generation budget for the first time try to make this link quite visible. Link between, I repeat, between policies of the Union, competence of the Union and resources. So we are not talking any longer of policies and goals of the member state. We are talking about authentic, unique, specific policies of the Union. And in practice, what does that mean for European Union public policy processes or politically? So I'm curious to know more about the consequences of this. Yeah, the consequences are tremendously because we know now the next generation is temporary. So the next generation for the audience means a temporary budget, let's say, to pay for infrastructure's resilience of the member state's economy. So it's not really money that is allocated to the Union. So it's money that is going to be spent by the member states. So what is the point that if we achieve in the future a sustainable and autonomous EU power to tax, we will have the Union providing for policies for the citizens. For instance, if member states do not have, for instance, subsidies for people who lost their jobs, whatever, or infrastructure, let's say the Union come, what we call it, provide public goods to the citizens. So this is the real impact of this research, ongoing research, trying to design a fiscal power of the Union that allows the Union to have autonomous resources to pay for autonomous policy goals. And of course, at the end, we benefit all. I think that is the main goal. At the end, we make a robust, more egalitarian Union, a Union that provides for public goods and not an Union that simply take care of what the member states want. So this is the important issue of designing an autonomous power to tax. And what are, in your opinion, future venues of research from now on, analyzing case studies beyond environmental policy, for example? Yeah, the idea also is to design, we have already this financial framework from 2021 to 2027. We have already scheduled several resources, environmental resources, that they are not taxes, because they are designed a way that are basically contribution of the member states. So what is the next step in the research? The next step is to design, let's say, taxes upon individuals, upon corporations. You know, the Commission has launched the new proposal, BEFIT, let's say harmonized taxable based for groups. That will be the basis of our own resource based on profit. That will be a major, major milestone in this evolution towards autonomous power to tax. So we are really in a very preliminary stage. So we have already only the input of the next generation budget. We have this new resources schedule, but we are still far away for what people call in America, Hamiltonian moment, when the Union has, let's say, in the power to tax the Congress, the US Congress has the power. And also, I would like also to point out that we have to get closer to a more democratic Union in the sense that the parliament has to have, should have a major role in approving the own resources. It's clear that this democratic legitimacy of the parliament in taxation is crucial. And at the moment, if we read article 311, the role of the parliament is extremely merely consul. So we want to have a strong Union, a strong European Parliament, let's say approving the budget and the resources for this budget. There's still much work to do. As you can imagine, we are now entering into this road. Of course, it's, well, in terms of future finish for research, still the tip of the iceberg that we're looking at. This has been a very straight on point episode, Ricardo, but I would like you to make an exercise now. If someone just came to this conversation and just didn't listen to anything you said before, what is the one two sentences that you would like to pass as a core message of this episode and your research? Yeah, that we need a more autonomous EU power to tax, that we need more taxes, more EU taxes, more EU resources, to EU policies. Great episode, Ricardo. Thank you very much. Thank you very much, Rodrigo. For all the viewers who are watching us on YouTube, you can find all the resources, all the materials, including the research, the article that served as base for this conversation on the Let's Talk About Politics and Governance website. 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