French Socialists: We should probably reform this convoluted tax code of ours, huh?

posted at 5:21 pm on November 26, 2013 by Erika Johnsen

I missed this last week, but in light of France’s third-quarter return to economic contraction and the anti-tax riots breaking out all over the country, it sounds like a few of the ruling French Socialists were finally moved to definite, growth-oriented action — or at least, to paying lip service to definite, growth-oriented action.

President Francois Hollande’s regime has been marked by back-and-forths on a bunch of new, grandiose taxation schemes, but none of them have done much to accomplish the deficit reductions for which the government has been aiming, and meanwhile, the French economy is struggling under a historically high tax burden. The economy and the employment rate, as you might very well guess, have only yo-yoed around stagnation levels, and the French are getting increasingly displeased with their indecisive and ineffective president as well as their prohibitively high tax rates. Check out this bizarre protest that went down over the weekend, as Reuters reports:

Thousands of horse-lovers paraded their animals through central Paris on Sunday in a protest against a planned sales tax rise they say will put riding centers out of business and send horses to the slaughterhouse. …

Anger at taxation, unemployment stuck at 11 percent and sluggish economic growth has sent thousands of people into the streets across the country over the past two months. …

Organizers of Sunday’s protest say the EU-mandated rise of France’s VAT to 20 percent as of January 1 – from the 7 percent reduced rate paid by equestrian centers today – will shut down a fifth of centers across France.

Some 6,000 jobs will be lost, they estimate, and 80,000 horses will have to be sent to slaughter. …

A guillotine was wheeled through the streets, its blade poised above a toy horse’s head. Another horse effigy was mounted on a crucifix.

Yep — I would say their tax code does sound a little complicated, no? Ergo, via the WSJ:

Prime Minister Jean-Marc Ayrault made a new pledge Tuesday to transform France’s tax system, acknowledging broad public discontent following a series of policy U-turns.

“France’s taxation system has become too complex, almost illegible, and French people too often misunderstand its logic or think what they pay is unfair,” Mr. Ayrault said in an interview published in the business daily Les Echos. “I think the time has come for a transparent overhaul of our tax system.”

[Sidebar: Did you catch that "French people too often misunderstand the logic" of the taxation system? ...How generous of him to say so.]

Mr. Ayrault told the newspaper he aims to overhaul the tax code in the 2015 budget and will soon begin meeting trade unions and business representatives to seek their input. …

Since entering office 18 months ago, President François Hollande has relied heavily on tax increases to rein in the country’s budget deficit. …

Such to-and-fros over taxes can hurt the economy because business leaders delay spending as they wait for greater clarity.

Standard & Poor’s Ratings Services, which downgraded France to double-A from double-A-plus this month, was among those warning that Mr. Hollande now has little political room for further measures to repair finances.

France’s ruling Socialists, however, have developed a habit of talking out of both sides of their mouths on taxes (…gee, imagine that), and the business community is skeptical that they are going to get either relief or certainty out of this latest tax-reform pivot. The government better do something soon, though, because France’s reputation as the “sick man of Europe” is only growing steadily worse.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

New simplified tax code:

Employers send all wages to tax authority, government re-distributes fairly.

BobMbx on November 26, 2013 at 5:31 PM

BobMbx on November 26, 2013 at 5:31 PM

Beat me to it.
It’s only the logical thing to do if the 75% rate isn’t working out…..

dentarthurdent on November 26, 2013 at 5:34 PM

France has more political mood swings than a woman.

France needs to buck up and adjust its national tampon.

rickyricardo on November 26, 2013 at 5:42 PM

French people too often misunderstand the logic

Yep, it’s the messaging, not the tax rate. Business and people love to pay high taxes as long as they understand them.

JusDreamin on November 26, 2013 at 5:46 PM

The tax code isn’t the cause of France’s problems – it is the result.

OldEnglish on November 26, 2013 at 5:49 PM

Much more than the tax code, France’s labor laws are just insane. I don’t know why any company in Europe would hire anyone in France.

slickwillie2001 on November 26, 2013 at 5:49 PM

So the socialist utopia failed again. Ah well, there’s always next time, they just need better people because the plan is a raging success.

Bishop on November 26, 2013 at 5:54 PM

Sire, the peasants are revolting!

WryTrvllr on November 26, 2013 at 6:01 PM

France’s ruling Socialists, however, have developed a habit of talking out of both sides of their mouths on taxes

It’s France. They don’t care if you speak out both sides of your mouth. Just so long as your pronunciation is correct and you don’t use any English.

Happy Nomad on November 26, 2013 at 6:08 PM

Sire, the peasants are revolting!

WryTrvllr on November 26, 2013 at 6:01 PM

And they seem to upset about taxes too.

Happy Nomad on November 26, 2013 at 6:09 PM

The French are good at horsing around.

Mr. Ayrault told the newspaper he aims to overhaul the tax code in the 2015 budget and will soon begin meeting trade unions and business representatives to seek their input. …

Ask the trade unions for their “input”, and they will dictate policy or declare a general strike if they don’t get their “revendications”. Everyone else will only have “les yeux pour pleurer”–eyes to weep with.

The French Constitution contains “the right to strike” even for employees of the national government. The unions can bring the government to its knees, and they don’t hesitate to do it, regardless of which party is in power. Jimmy Hoffa on steroids.

Steve Z on November 26, 2013 at 6:11 PM

Well “pivot” does sound French.

Flange on November 26, 2013 at 6:11 PM

Much more than the tax code, France’s labor laws are just insane. I don’t know why any company in Europe would hire anyone in France.

slickwillie2001 on November 26, 2013 at 5:49 PM

This. When it is impossible to fire anyone, there is great risk in hiring someone. And the regs that force ridiculous measures once a company reaches 25 (or is it 50?) employees stifles growth. And Obamacare is pushing us in that direction.

iurockhead on November 26, 2013 at 6:15 PM

Well “pivot” does sound French.

Flange on November 26, 2013 at 6:11 PM

True. Sounds like a synonym for O’Bozo.

WryTrvllr on November 26, 2013 at 6:19 PM

Whenever I see a post about the French, I always know it’s by Erika.

whoishe on November 26, 2013 at 6:23 PM

Let them eat cake.

ghostwalker1 on November 26, 2013 at 6:24 PM

France’s ruling Socialists, however, have developed a habit of talking out of both sides of their mouths on taxes (…gee, imagine that), and the business community is skeptical that they are going to get either relief or certainty out of this latest tax-reform pivot. The government better do something soon, though, because France’s reputation as the “sick man of Europe” is only growing steadily worse.

Don’t you feel so much better knowing that Barack Obama and his progressive allies are modeling their vision of the US on France?

Except they promise to implement it better….you know, like Obamacare.

Athos on November 26, 2013 at 6:27 PM

Things will not likely change in France until the parades replace the guillotines with horse effigies with guillotines with politician effigies. Only then will politicians remember the history of their country and back down from inflicting pain upon their citizens.

dominigan on November 26, 2013 at 7:35 PM

I’m sobbing so much for the French don’t bring me a crying towel.Make it a beach towel.

docflash on November 26, 2013 at 7:36 PM

Don’t you feel so much better knowing that Barack Obama and his progressive allies are modeling their vision of the US on France?

Except they promise to implement it better….you know, like Obamacare.

Athos on November 26, 2013 at 6:27 PM

“It’ll be different, because this time you’ve got me!”

slickwillie2001 on November 26, 2013 at 10:20 PM

I don’t have any idea how the French calculate their unemployment rate, but a more logical way of calculating our rate would also give about 11%. I can remember when our rate was downgraded to double A+ and that it became equal to France’s rate. I was mortified by both things, but I thought it was justified.

France pulled back into the lead in this little race.

burt on November 26, 2013 at 10:39 PM

…France needs a community organizer…

KOOLAID2 on November 26, 2013 at 10:59 PM