In response to the COVID-19 crisis, we at the Austrian Economics Center have brought together many of the most prominent pro-market organizations from Europe to develop a vision for the future of Europe and how it should look like. The declaration has been signed by 27 organizations. Read it below or download here.
1) De-Bureaucratization via e-Government
It is an absolute must to simplify the rules and regulations that burden economic activity. We believe that e-government can play an essential part in cutting red tape across the continent.
Thus, we propose: the digitization of all state procedures and administrative processes in the three branches of each of the government jurisdictions; the automation of personal and business tax calculations to replace all the current tax declaration systems. Moreover, the opening of companies should be possible in 24 hours or less, in a complete digital manner.
2) Tax Competition and Fiscal Sustainability
A transparent and sustainable tax system must be affordable, easy to understand for taxpayers. It has to be easy to understand and comply with. When the rates are too onerous or the tax code requires a battalion of accountants and lawyers for their understanding, the system becomes unsustainable, opaque, and, ultimately, unfair.
We advocate for an agile, moderate and simple tax code. Specifically in the case of companies, taxes should only be levied on dividends or salaries. As long as the funds are kept in the company’s account or reinvested, they should not be taxed.
Why? Because companies that are just starting out and struggling to generate income do not have to worry about paying anything beyond their own expenses. The objective is clear: to promote a culture of entrepreneurship and the growth of businesses throughout Europe.
3) A Pro-Innovation Mindset
Policymakers need to completely change their mindset and understand that innovation, new products, services, and business models must, in principle, always be allowed. It is highly detrimental towards innovators that the default position of European authorities is the Precautionary Principle.
Innovation must instead be protected by the principle of the presumption of innocence. This way, we will put creative responses back in charge of problem-solving rather than regulations and prohibitions that hinder and stifle entrepreneurial spirit.
Is there any role for the state regarding innovation? Yes. Minimal control to safeguard the population. Nonetheless, innovation should be the focal point coupled with only minimal regulation, not the other way around.
4) Cash & Crypto Should Be Kings
We are frightened by the periodic discussions and trial balloons launched by European authorities in order to abolish cash. A cashless society would not solve any problems. However, it would bring a series of very real problems to individuals and companies. The first one has to do with privacy and personal freedom. The second is how vulnerable cashlessness would make us vis-a-vis disruptions such as power failures or communication breakdowns. Consequently, cash should not only be preserved but the €500 bill must be immediately brought back and the benefits of a €1,000 bill need to be discussed.
European citizens should also fully enjoy the possibilities that technology has brought to us. That is why we call for the total legalization of cryptocurrencies and crypto assets. They should be able to serve as a means of payments and transactions. In addition, any store that possesses the technical means to charge in cryptocurrencies such as Bitcoin, Litecoin, Monero, etc. must be able to do so without any regulatory hindrance.
5) Welfare and Rights for the 21st Century
Europeans have to regain the ability to protect themselves and their families. Freedom of association is essential to this. In the 21st century, there shouldn’t still be any compulsory memberships and contributions to unions. Similarly, the possibility of free choice for pensions must be opened. The state may very well promote a mandatory minimum contribution. But it is necessary that there are private options to manage both this minimum and possible additional contributions that citizens want to make. The gradual closing of state-run pension systems may also be considered in the medium to long run.
What is more, a voucher system for education and health can bring these important decisions back to the citizens instead of anonymous bureaucracies.
The plethora of subsidies and government handouts must be dramatically reduced and simplified. The main objective of social spending has to be the retraining and reinsertion of unemployed people to the workforce. A safety net ought to be provided but only as a temporary aid. Welfare payments must not become either a trap or a lifestyle.
The AEC’s fundamental goal is to promote a free, responsible and prosperous society. Through education and improving public understanding of key economic questions, the AEC promotes the idea of a free market economy and the ideal of a free society.