This study evaluates the Monti report and the suggested new own resources from the point of the view of optimal taxation and fiscal federalism. Monti report emphasizes the objectives of EU and vaguely described European added value as criteria. The report also leaves aside the need to coordinate the budget reform and national tax policies. According to our assessment, the potential added value of the EU is linked to mobility of tax bases and the harmful environmental effects of production and consumption. We recommend therefore harmonisation of the corporate income tax bases and environmental and energy tax bases and use of minimum tax rates independently of the results of the budget financing reform. The minimum effort would be to remove the complicated VAT-based own resource and correction mechanisms. The most promising new own resources are CO2 levy, which completes emission trade, harmonised corporate income tax CCCTB and financial activities tax FAT.