Tax Hikes Wont Help France
August 6, 2013 Taxation in France
PARIS – The heavy handed austerity measures and tax hikes implemented by the French government may be slowing the country’s economic growth.
Reductions in inefficient spending, and not tax hikes, are the key to fueling France’s economic recovery, according to a new report released on August 5th by the International Monetary Fund (IMF).
The tax burdens faced by individuals and businesses in France are already some of the highest in Europe, and it is now critical for the national government to re-balance its recovery efforts by reducing the reliance on tax hikes, and instead concentrating on cutting inefficient spending on social security and local governments.
Any increases to tax rates beyond current levels are likely to hamper economic growth by stifling investment and job creation.
The IMF noted that one of the most effective steps that the government could take at this point in time is to cut the overall tax burden on labor, thereby boosting enterprise competitiveness and economic activity.
The recommendations issued by the IMF fly directly in the face of recent statements made by the President of France Francois Hollande, who last month said that the government could not rule out implementing tax hikes in the near future.
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