Pausing, not paying tax

By Global Tax Weekly

I apologize for returning yet one more time to the hoary old subject of French taxation, but I can’t let Prime Minister Jean-Marc Ayrault’s pledge that there will be a “tax pause” in France, in 2015 rather than 2014, pass without comment. I am reminded of a famous speech by Charles James Fox in 1800 in which he is replying to a suggestion that the war with France should be “paused” rather than that there should be peace negotiations. Said Fox: “…. if a man were present now at a field of slaughter, and were to inquire for what they were fighting – ‘Fighting!’ would be the answer; they are not fighting, they are pausing.’ ‘Why is that man expiring? Why is that other writhing in agony? What means this implacable fury?’ The answer must be ‘You are wrong, sir; you deceive yourself. They are not fighting. Do not disturb them; they are merely pausing. This man is not expiring with agony – this man is not dead – he is only pausing…..All you see, sir, is nothing like fighting – there is no harm, cruelty or bloodshed in it whatever; there is nothing more than a political pause.”

So now M Ayrault: “. . . plans to increase value-added tax, to raise retirement contributions, and to lower the family income tax break ceiling (le quotient familial) next year, within the framework of the 2014 Budget, merely represent a “slow down” in tax hikes. There will be a slowdown in tax rises next year before moving towards an effective ‘tax pause’ in 2015.”

So the French economy is not wrecked; the national debt is not rising; taxpayers are not being crushed under the weight of imposts. No, Sir! Not at all, you are mistaken; they are merely pausing! And what when the “pause” ceases in 2016? A return to more taxes, presumably.

And then M Ayrault continues by insisting that the Government has made “unprecedented savings totaling EUR15bn (USD20.3bn) in 2014, to ensure that tax rises are as small and painless as possible.” As I pointed out last week, this is disinformation of a particularly shoddy kind. The Government hasn’t made any savings at all: this figure is the withdrawal of tax breaks, in other words it is an increase in taxation. Ohhhhhhhh!

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