Should listen to them more. The France is no shortage of young people and serious entrepreneurs who do not load relief, apply for that "aid are good to take, if aid", but in the eyes of that "none of this is determinative for launch, and porter, a business project.
But the official France remains trapped in its myths. Can doubt really, prepares rupture or not, to dispose of it. Social VAT proposal is an edifying example.
A breath is grip the Senate. Second report that the Senator and former Minister of finance Jean Arthuis dedicated to relocations, not reproduced not the same error of diagnosis than committed on the first (1993) by the Liberal commentators, among them the author of this column. The Chairman of the Board of Finance of the Assembly high alarm rightly of the extension of the phenomenon. Unfortunately, the remedy proposed would have all opportunities to accelerate the movement.
The solution is, as he said, to "zero-rated production" in removing or reducing the taxation of enterprises: (1) contributions, business tax, tax on wages. It would be to cure the lack to be collected by the taxation of "products", i.e. consumers. Among the contributions nailed to the pillory, Arthuis said not the most anti-économique: tax on companies (IS). But it is not our subject for today. In an information report dated November 3, 2004, the general rapporteur of the same commission, Senator Philippe Marini, is shunned as much as its Chairman for the Danish system. The VAT 25 (only in France described as "social") and the absence of social security contributions are two of the main features. Our two parliamentarians have revived the former popularity of the French right to the "Scandinavian model". Pompidou wanted to make our country "a Sweden with the Sun".
It is indeed étatiser a particularly dynamic pan of GDP (but its dynamism is considered a priori excessive once it exceeds the forecasts of the technocrats). Grace, call not "social" by destination health concern. Nothing more individual, and perceived as such, that care! It is true that the Senator of the Mayenne class report food among the "social needs". When a social service of food It ultimately well by finance through a VAT increase on foodstuffs, after have involved companies! Not dramatisons! The project is quite responsible for dynamite as it is.
Examine more closely how things are. The new system will quickly appear as the summary of the less known and the most harmful derives from contemporary capitalism. In consideration of his work, currently, an employee of a company receives remuneration regarded as almost all of its needs, because it pays directly on his direct salary, either because social security funds perform them for him with his money. These are fed by contributions paid by the company and indirect (or delayed) pay the employee. The Senate Bill is a market economy turning to a lower plan. Délestées part of the "cost of labour" by the lowering of contributions, dives in the competitive market should decrease of almost all their selling price HT. VAT to 24.6 (generally called) would apply to a reduced base. In principle, it should not result in an increase in the prices. Some decline is even possible in the event that the increase in VAT would be calculated in such a way that it does that partially offsets the decrease in the cost. But then it should be, except to reduce benefits, raise other taxes.
However, let us not forget that the market sector (which includes part of the public sector) is the one true creator of wealth. The new system would place the bar lower for businesses. It would be normal that they are less high. If the mass of wages to settle at the end of the month contract, I have tended to restrict the effort of investment, search for new clients, etc. In no case consumption is the engine of sustainable growth, contrary to claims the dominant modern doctrine and the national accounts statistics. There would be no dynamism of social VAT! The more worrying in the proposed system, is considered from a different angle, the spoofed role of consumption.
In the business world as well as that of "macroeconomics" (institutes of economy, OECD, Bank of France, departmental offices, etc.), on reasoning as if it was the consumers who were paying employees. Old fad dating back to the 19th century. All its forces, 20th is something to be true. It almost happened, without deeply damaging to the ability of capitalism to achieve full employment.
In practice, companies have not consciously and exception, maintain very little, to their credit, the equivalent of a "wages Fund". Peter Drucker imagined place one in each company in the same rank as the "investment funding. To pay salaries, there are the limit on net sales receipts and (freestyle) sophisticated management of cash flow. Difficult to manage without the assistance of a wheel of own and available funds, when the sales promotion is shot of credit granted to clients! The cash flow is expected to replace the capital. Is not another issue more crucial than this one to the precariousness of employment and the fragility of the wages. By substituting a tax paid by the consumer (indirect staff salaries) contributions paid by companies to the coffers of the social security system, it brings the consecration capitalism thrown overboard its essential responsibility, and with it, the pledge of its strength and its acceptability.