Sustainability-oriented tax-based alternatives to finance the EU budget

The financing of the EU budget becomes increasingly difficult due to new demands for more genuine EU public goods as well as the need to repay debt incurred as part of the EU’s post-pandemic economic recovery. This dissertation aims to contribute to the ongoing discussion on how to reform the EU system of own resources by introducing tax-based own resources at EU level. It discusses the advantages and disadvantages of such a reform, based on the fiscal federalism and public finance literature. A theoretical framework in which the suitability of potential tax-based candidates for innovative own resources can be analyzed is established. Within this framework three concrete options for tax-based own resources are studied. Those candidates are, a carbon-based flight ticket tax, a border tax adjustment complementing the EU emission trading system, and a net wealth tax. The creation of a new dataset, which merges flight route data with specific CO2 data, the re-calibration of an existing dynamic new Keynesian (DYNK) model in order to simulate a WTO-compatible border tax adjustment as well as the development of an econometric method to adjust the microdata of the European Central Bank (ECB) household finance and consumption survey (HFCS), utilizing data from various rich lists and the national accounts, to deal with non- and underreporting of wealth allow for the estimation of potential revenues. The dissertation is divided into 5 papers, each contributing to the scientific literature and together providing a comprehensive and coherent input to the ongoing policy debate about the EU system of own resources.