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ORIGINAL FRENCH ARTICLE: Increasing number of challenges to the government’s tax regime

by Aurélien Soucheyre

Increasing number of challenges to the government’s tax regime

Translated Wednesday 21 February 2018, by Anne Sanders

Bruno Le Maire, the Minister of Economy and Finance, believes that “lowering taxation on capital will allow business to create jobs”. Why then has the “two billion euros paid to Carrefour since 2013 under the CICE (tax credit for employment and competitiveness) and tax savings” led to 2,400 job losses?

The government’s fiscal policy was questioned this Wednesday in the National Assembly, during the government question time session. In spite of the facts, the minister, Bruno Le Maire, claimed to be striving for an increase in purchasing power and the creation of jobs.

The deputies Ian Boucard (Republican Party) and Christine Pirès-Beaune (Socialist Party) questioned the government at the National Assembly on the reality of the much-vaunted increase in purchasing power. They took up a point used by the Communists and the left-wing party France Insoumise in the course of the discussion of the budget for 2018. “Savings made by the abolition of social security contributions and employer’s contributions are not sufficient to cover the rise in the cost of living”, said Christine Pirès-Beaune. She went on to list the rise in prices for gas, electricity, oil, diesel, hospital charges, mutual societies, insurance, tobacco, etc. Bruno Le Maire’s response was to ridicule the similarity between the criticisms from both sides of the chamber: ”It says a lot about the chaos in certain political parties and that they are unable to re-invent themselves.”

The 5% most affluent households will pick up 42% of the savings

Next the Minister of Economy and Finance repeated his hackneyed arguments on the usual theme: these budget policies will bring “social justice”. “Abolishing charges for business is social justice. Increasing the rate of ‘primes d’activité’ (employment supplement) is social justice. Cutting council tax is social justice.” “Our strategy is to create wealth via business and enterprise,” he proclaimed, rather than “distributing wealth before it has been created”. Never mind that it has already been proved that the trickle-down theory does not work. Never mind if the latest report by the French Economic Observatory, the OFCE, demonstrates that the government’s fiscal policy will benefit the better-off : the 5% most affluent households will pick up 42% of the savings, and the 5% least affluent will see their standard of living drop by 0.6% on average.

Carrefour sheds jobs while making profits

Bruno Le Maire, while he was at it, asserted that “lowering taxation on capital will allow business to create jobs”. A few minutes later, the question put by Muriel Ressiguier refuted this explanation. The France Insoumise deputy questioned the government on the 2,400 job cuts at Carrefour. She reminded them that the supermarket giant has received more than “2 billion euros since 2013 in CICE and tax savings”. Was this to save jobs? She thought not, recalling that Carrefour gave out more than 500 million euros in dividends (to its shareholders) in 2016. Bruno Le Maire ignored this remark in his reply. He maintained that Carrefour was going to invest 2.5 billion euros to deal with automation and “large-scale technological changes”, which, in his view, would allow for the creation of more jobs. This is quite illogical. Whenever the government makes a pronouncement, it’s that something or other will always lead to the creation of more jobs in the long run. Meanwhile, the fiscal policy benefits the richest, and Carrefour lays off staff while making a profit. But all is well. Bruno Le Maire also announced that he was seeking “exemplary support” for the workers laid off by Carrefour. It remains to be seen whether this new “promise” will be honoured, or whether it is just a simple wish.

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