Shadow of the Republic: France’s Delicate Dance with Welfare and Taxation

Shadow of the Republic: France’s Delicate Dance with Welfare and Taxation

2024-10-07 17:23:00


LAre French companies taxed too much or not enough? While a new fiscal blow looms over them in the framework of the 2025 finance bill, which will be presented next Thursday, the debate is relaunched.

On the one hand, some are calling for a reduction in their taxes to make them more competitive in the context of a globalized economy. Others assure that by taking into account reductions in taxes and social contributions, as well as public aid and subsidies, they are not doing so badly and that we could therefore increase taxation or eliminate these expenses. support.

To give food for thought to this debate, the economist Éric Dor, director of economic studies at the IESEG School of management, carried out a small calculation in a note using data from the 2022 national accounts. (the most recent) in order to compare the net tax and social pressure on businesses in France compared to our European neighbors.

France, second behind Sweden

Result, even taking into account the various tax cuts and public support, the weight of tax and social contributions on the net added value (that is to say reduced by the depreciation of investments) is greater in France than in most of our neighbors. Only Sweden (28.37%) is ahead of us. In France, this rate stood at 28.12% in 2022, compared to 16.08% in Germany or 20.86% in Italy.

“The reasoning according to which companies have been entitled to too many gifts and that it would be enough to reverse them to resolve the problem of the deficit, without consequences on investment, attractiveness and employment, is far too simplistic, if we look at these figures, or the average profitability of companies, which is also much lower than that of our neighbors,” analyzes Éric Dor.

For the economist, who considers the government’s project “worrying”, corporate taxes should not be touched globally. “But this is macroeconomic reasoning: that does not prevent us from looking a little more closely if certain sectors or certain companies cannot be called upon to contribute,” he continues. The Barnier government wants to put in place an exceptional contribution from companies with a turnover of more than one billion euros, which will take the form of a surcharge on their corporate tax.


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