(In)congruence Between Taxation, Spending, and Representation: The Ambiguous Character of Tax-based Contributions

The free movement of persons and services, related secondary legislation, and the jurisprudence of the Court of Justice of the European Union (CJEU) have provided the basis for increased personal mobility within the European Union (EU). Notwithstanding the corresponding significant benefits for both EU citizens and Member States, this phenomenon has also led to an increasing disintegration between the jurisdiction in which an EU citizen may influence taxation and spending and the one in which they actually pay (most of their) taxes. This article explores the potential of an EU own resources system that is (increasingly) built on tax-based contributions in order to address the intensifying mismatch between taxation, spending, and representation. It is shown that such an assessment produces mixed results. The situation of taxpayers with transnational realities of life would be improved by a transfer of fundamental decision-making processes to the Union level. However, democratic legitimacy would simultaneously be reduced in relation to taxpayers who (mainly) pay their taxes in their respective Member State of citizenship. This article therefore contends that the ambiguous character of tax-based contributions from a democratic legitimacy perspective should be taken into consideration in negotiations on the (re)shaping of the EU’s own resources system.