People in the euro zone don't have enough money in their pockets due to labor taxes being too high, said the president of the Eurogroup at the World Economic Forum in Davos on Thursday.
An overhaul of the tax system is essential to empower euro zone citizens and improve their spending capacity, Jeroen Dijsselbloem argued, in response to questions about how to both boost growth within the region and quell the ongoing surge of support for populism.
"There is one topic that all of us — and I mean, in the euro zone, literally, all of us — should consider and that is tax reform," the Dutch politician contended.
"Tax wage on labor in our countries is much too high — which is hindering job growth and recovery in labor markets — while at the same time large corporates, being helped by the Netherlands and other countries, are not paying enough. We need to rebalance that," Dijsselbloem stressed.
Describing progress already made in the Netherlands with regards to decreasing taxes for lower income workers, he highlighted continuation of this momentum as critical.
"We really need tax reform in Europe to get people a little more spending power — money in the pocket, to bring down the costs of labor — and at the same time, think of how to finance it," Dijsselbloem added, before sharing his views on how such financing should be done.
"We need the large multinationals to pay more tax, and that's a global issue that I'm raising everywhere. ... Big companies need to start paying taxes and acknowledge that," he concluded.