The debate between the right and the left in France is heavily focused on taxes. Some believe that taxes should not be increased, as France already has the highest tax burden in Europe, which is true. Any increase in taxes would harm the competitiveness of the economy and encourage tax evasion among the wealthy. On the other hand, a decrease in taxes would stimulate growth, lead to a decrease in unemployment, and generate new resources for individuals, businesses, and the state in a virtuous circle.
Others believe that the priority should be to strengthen public services to better meet the needs of citizens. This would require increasing revenue by placing higher tax burdens on the well-off. Advocates of this approach believe that selective and moderate action would have negligible negative effects on investment, competitiveness, and growth. Conversely, increasing public spending and improving public services would have a positive impact on the economy. The upcoming budget debate risks becoming a dialogue of the deaf between proponents of these two approaches, but it is uncertain whether the terms of the debate are well set.
Firstly, caution should be taken when comparing tax systems. For example, in France, supplementary pensions are considered mandatory contributions because they are a mechanism mandated at the national level by the state. In many countries, supplementary pension systems are defined at the level of each professional branch through collective agreements, and are not considered mandatory contributions, even though they are just as obligatory for companies affiliated with the professional branch and their employees. Moreover, there is no mechanical link between the level of tax burdens and competitiveness. For example, Denmark has a highly competitive economy with high tax burdens, particularly in income tax, yet it has a strong export sector and a surplus in its balance of trade.
It is important to consider the conditions for effectiveness when discussing tax policies. One side argues that reducing taxes would lead to economic growth and job creation, benefiting individuals, businesses, and the state. The other side advocates for higher taxes on the wealthy to fund public services and respond to citizen needs. However, the debate is complex and there is no simple answer, as different countries have different tax systems and levels of competitiveness. Ultimately, the upcoming budget debate in France may not fully address the nuances and complexities of the tax issue.
