‘An environmental tax reform (ETR) shifting the tax burden from welfare-negative taxes, (e.g. on labour), to welfare-positive taxes, (e.g. on environmentally damaging activities, such as resource use or pollution) can be a win-win option to address both environmental and employment issues.’

‘ETR can also help to alleviate the possible adverse competitiveness effects of environmental taxes on specific sectors. If the action is closely co-ordinated at the Community level, these impacts can be further reduced compared to unilateral actions by Member States.’

‘Reductions in labour taxation or social-security contributions which tend to benefit lower-income households, can counterbalance any possible regressive effect from environmental taxes.’

‘Finally, with an ageing population, which increases pressure on public expenditure, and globalisation that makes taxation of capital and labour less viable, the shift of tax burden from direct taxation towards consumption and, in particular, environmentally damaging consumption, may provide considerable benefits from a fiscal perspective.’

From: Commission of the European Communities (2007) Green paper: on market-based instruments for environment and related policy purposes. COM (2007) 140 final, Brussels.

 ’Shifting taxes away from labour should be a priority for all Member States in order to stimulate demand for labour and create growth.’

‘Progress on taxation also implies reducing taxes on labour to the minimum necessary and adapting the European framework for energy  taxation in line with the EU energy and climate objectives.’

From: European Commission (2010) Annual Growth Survey: advancing the EU’s comprehensive response to the crisis. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. COM(2011) 11 final, Brussels.