The European Union member states must balance their own tax needs with EU Treaty objectives. The EU has a mostly harmonized tax policy for indirect taxes, and partly for direct taxes, to support free movement of goods, services, capital, and labor. Member states must avoid discriminatory tax measures that disadvantage other member states. Differences in national tax systems can restrict free movement, so some level of tax harmonization is needed. Without harmonization, there can be negative effects like reduced tax bases, suboptimal public services, and distorted resource allocation in the single market.