#FRAPoli: Christine Lavarde: “Production costs are out of the ordinary in our country” – #FrancePolitics #FRPoli

Senator LR des Hauts-de-Seine insists on the weight of production taxes, which are very harmful to French competitiveness.

France remains the European champion in terms of fiscal and social pressure despite the drop in compulsory levies of 50 billion euros between 2018 and 2023. So this is not enough?

France has a long way to go when it comes to compulsory deductions. For households, taxation has actually fallen a little. But we must not forget that on January 1, 2018, the CSG, paid by employees and retirees, increased by 1.7 points. In addition, this reduction was mainly achieved with the abolition of the housing tax which was in the hands of local elected officials.
This decision was a mistake: some of the inhabitants have lost all links with the local public services from which they benefit. On the business side, the reduction in production taxes of 10 billion per year decided by the government is certainly a step forward, but it is not enough to improve the competitiveness of the country.

That is to say ?

The health crisis has shown our extreme dependence on certain productions relocated abroad. I am thinking, for example, of semiconductors or drugs. The relocation of production chains is a major stake in building a resilient economy. This raises the question of production costs which are out of the ordinary in our country. France has been dragging itself around for years. I am not embarrassed that a business pays tax when it makes a profit. On the other hand, it is necessary to reduce the charges that weigh even before the creation of a turnover, such as production taxes or the cost of labor.

Should we therefore tackle the contributions which remain extremely high?

It is necessary to reduce the costs weighing on production. Social charges are used to finance highly indebted social organizations. We must engage in real work on medical prevention, curative treatments have a much higher financial cost. Regarding pensions, I am in favor of postponing the age of entitlement. Parametric reform can be implemented quickly. We can also make these charges acceptable to employers, by going much further in the abolition of taxes on production. However, such a decision will need to be accompanied by a real reform of the financing of local authorities so as not to make them dependent on financial transfers from the State.

Are you worried that the “taxation of the rich” debate will pollute the presidential campaign?

This debate is already taking place and this is obviously not the right solution. Very well-off households are the most mobile. They must be encouraged to stay in France and thus contribute to growth. Many of these people take risks, invest and contribute to the economic development of the country. Investment in stone, which is considered unproductive, continues to be taxed. This is a major mistake because the housing market plays a key role in the economy.

Should we reform the income tax paid by fewer and fewer taxpayers?

There is indeed a segment of the population which is not considered to be “rich and mobile”, which works, which contributes largely to income tax, which does not benefit from any public aid because it is too “rich” and who feels downgraded. Here too, we have work to do so that there is a real interest in working by playing on different levers.

Let us come to the consolidation of public finances weighed down by the crisis. Should we start saving now?

The government’s strategy is to stabilize public debt with a rate of expenditure growth lower than GDP growth. It is a necessary condition but it is not a sufficient condition. France has a primary deficit. We must stop this headlong rush by attacking savings and improving the quality of spending. Today, we are asking the state for everything. The country is over-administered, as we have seen during the crisis.

>> Read the interview on LeFigaro.fr

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