ABSTRACT
Taxation is one of the few fields of European Union (EU) policy in which unanimity is required for new legislation to be implemented. Member states remain extremely reluctant to cede any of their sovereignty in tax matters to the EU. Tax harmonization may refer to the tax system as such. Internal customs duties have been abolished in the EU and have been replaced with a common customs tariff with regard to third countries. Most relevant to economic agents is the marginal tax wedge, which is the difference between the cost to an employer of an additional amount in wages and the additional net wage that the worker takes home. The most commonly stated reason for imposing excise duties on alcohol is for revenue purposes. The tax reforms suited the political and social climate of the 1980s with its emphasis on supply-side economics. In particular the top rates of the personal income tax have been lowered, thereby increasing income inequality.
