ABSTRACT
Within the past 10 to 15 years, the conditions for the funding of public sectors have changed worldwide through the increasing integration of capital markets. Within the European Union (EU), this development has been reinforced by the abolition of remaining capital controls as part of the internal market programme. At the same time, the completion of the internal market encompassed the abolition of border controls between EU member states, resulting in increased trans-border mobility of consumers. These simultaneous changes in factor and commodity markets pose a number of challenges for tax policy in the European Union, which are of relevance for other integrating regions.
