The tax systems of developed countries are as a rule very stable and larger changes are made over a long time. However, the world does not stand still. Several trends are undermining tax bases and tax receipts, while an ageing population will need more to be spent on social security.
In this paper, we summarize the main developments of European countries’ tax systems, looking at both longer term trends as well as more significant reforms in recent years. We look at labour taxes (including the personal income tax and social security contributions), corporate income tax, consumption taxes, and property taxes.
The focus of the study is on how the tax system is used to achieve innovation, better health behaviour and a cleaner environment. In particular, we map interventions that seek to influence people on innovation, health and environmental matters through excise duties and taxes, and which (ideally) incorporate behavioural insights that help to achieve better results in terms of innovation, health and environmental goals. In addition, we examine what behavioural insights are built into the broader tax system (with the goal of improving tax compliance and collecting more tax revenue).