European Tribune - Community, Politics & Progress.

Why we agree to pay taxes

by Jerome a Paris
Sun Feb 11th, 2007 at 12:34:40 PM EST

Below is a translation of a petition launched by a number of economists, intellectuals and journalists, via the magazine Alternatives Economiques, which we've quoted many times here and which I recommend once again.

Appel : « Pourquoi nous consentons à l’impôt »
"Nous, soussignés, assujettis à l’impôt sur le revenu, et pour certains d’entre nous, à l’impôt de solidarité sur la fortune, considérons ces prélèvements comme légitimes et sommes fiers d’apporter ainsi notre contribution aux dépenses publiques nécessaires au progrès, à la cohésion sociale et à la sécurité de la nation.
Nous considérons également qu’un impôt progressif sur les successions est le corollaire indispensable des libertés économiques offertes par l’économie de marché. Le marché est facteur de progrès parce qu’il permet à l’esprit d’entreprise de s’exprimer. Mais les inégalités qu’il engendre sont mortifères pour la démocratie si aucune limite n’est mise à la transmission héréditaire de la richesse. Celle-ci doit être acquise par le travail, par le talent, et non par le simple fait d’avoir hérité de ses parents.
Une société où le pouvoir économique se transmet par héritage, est une société condamnée à une croissance lente, où les rentiers l’emportent sur les créateurs et où travail et mérite perdent toute valeur.
Why we agree to pay taxes.
We, the undersigned, pay income taxes, and, for some among us, the wealth tax. We regard these payments as legitimate and are proud to thus contribute our share to public expenditure, which is necessary for progress, social cohesion and the safety of the nation.
We also consider that a progressive estate is the essential corollary of the economic freedoms offered by the market economy. The market is factor of progress because it makes it possible for entrepreneurship to expressed itself. But the inequalities which it generates are deadly to democracy if no limits are set to the hereditary transmission of wealth. It should be acquired by work and talent, and not by the simple fact of having inherited it from one's parents.
A society where economic power is inherited is a society condemned to slow growth, where the rentiers override the creators and where work and merit lose their value.

L’Etat doit bien sûr savoir se réformer. Augmenter les impôts n’est pas une fin en soi et la liberté de chacun passe par la libre disposition d’une large part du fruit de son travail. Mais voir des candidats à la magistrature suprême proposer des mesures démagogiques en matière fiscale et justifier la sécession sociale des plus riches nous consterne.
Car nos revenus ne proviennent pas seulement de notre talent personnel. Ils ont été acquis par notre travail, mais celui-ci ne porterait pas ses fruits sans le stock d’infrastructures, d’innovations, de savoir-faire, de goût d’entreprendre, de lien social, qui nous a été transmis par les générations qui nous ont précédés. C’est cet héritage commun qu’il nous revient de préserver et de développer en priorité afin d’assurer la qualité actuelle et future de notre vie individuelle et collective. Ce qui passe par un niveau élevé de dépenses publiques. Ces dépenses ne sont pas seulement un coût, elles sont aussi un investissement, gage à la fois de justice et de dynamisme.
C’est pourquoi nous consentons à l’impôt et récusons des baisses de la fiscalité dont la contrepartie serait l’insuffisance des moyens donnés à la protection sociale des plus pauvres, à l’éducation, à la recherche, à la santé, au logement ou encore à l’environnement.
The State must of course learn to reform over time. Increasing taxes is not an end in itself and the freedom of each of us comes from the ability to enjoy a large part of the fruits of one's work. But we are dismayed to see some presidential candidates putting forward demagogic tax measures and justifying the social secession of the richest.
Our income does not come only from our personal talent. It was provided by our work, but that work would not bear its fruits without the stock of infrastructures, innovations, know-how, entrepreneurial spirit, and social bond which was transmitted to us by the generations which preceded us. It is this common heritage which it is incumbent upon us to preserve and to develop in priority in order to ensure the current and future quality of our individual and collective lifes. And that requires a high level of public expenditure. That spending is not only a cost, it is also an investment, which guarantees at the same time justice and dynamism.
This is why we agree to pay taxes and cannot consent to tax cuts whose price would be the weakening of the means given to the social protection of the poorest, to education, research, health, housing or to protection of the environment.

You can join the petition here

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Why we agree to pay taxes | 20 comments (20 topical, 0 editorial, 0 hidden)

Re: Why we agree to pay taxes (none / 1)

Excellent.

There's a constant drumbeat in France about how the wealthy are mistreated. Johnny Halliday can noisily support Sarkozy at the same time as he's trying to change his French nationality so as not to pay tax, then moving to Switzerland for the same reason. Last week I caught sight, on TV, too late to see who the little poor rich man was, a guy saying he would come back and live in France if Sarkozy was elected president.

It's good to read the point of view above. It needs to be stated more often.

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 11th, 2007 at 01:03:51 PM EST

Re: Why we agree to pay taxes (none / 1)

the problem isn't really paying taxes, it's how the tax money is used. France has an apalling record in mismaning taxpayer money through archaic regulations. A country like Sweden has a higher tax pressure than France but a far better living standard for the poor and socially disabled, because the losses in administration are minimal. The best example is healthcare where about 50% goes to administration in France and 20% in Sweden.

The "taxes on the rich" is only a part of the tax debate since they amount to a very little part of the national wealth. Even of the rich were taxed to 90% it would improve the resoources of the state minimally. "Taking from the rich to give to the poor" sells politically but allows politicians from all tendencies not to cut into the pork or to do needed reforms. Because that would piss off the nomenclatura and imply that you might not be reelected.

by oldfrog on Sun Feb 11th, 2007 at 01:17:41 PM EST
[ Parent ]

Re: Why we agree to pay taxes (4.00 / 2)

It's not only a question of taxes on the very rich, yet it's around these unhappy people that a great deal of media discourse revolves, which is what I wanted to point out. What matters is to maintain the genuine progressivity of taxes. But the upper rates of income tax have been lowered in France, and a 60%-of-income ceiling placed on annual tax paid. Sarkozy wants to take this anti-tax movement further. By the propaganda in favour of wealthy "victims", people are psychologically prepared to think that "it stands to reason" that things would work better if there were less taxation.

On the spending side, of course it's right to want efficiency. But the complaint that, in France, the State wastes huge sums of money is an old saw of the right. I heard Bayrou bring it out last week on TV. After saying he would make education a priority (good, I agree, and Bayrou is credible on education), he was asked how to pay for it. Reduce spending elsewhere, there's so much waste, he said. All that paperwork. Do you know you need an authorisation from the prefecture to hold a Vide-grenier? (Kind of car trunk sale).

He didn't get a follow-up question, more's the pity, on just how much he thought he would gain (to pay for major investment in education) by doing away with the prefectoral authorisation for Vide-greniers. The truth in all this is that the State would only save money by massively reducing public service jobs. That is something no candidate, Bayrou included, is going to promise. Especially as there is no guarantee of the private sector taking up the slack on the job market, nor any guarantee of greater public-service efficiency afterwards.

You've mentioned 50% administrative costs in French healthcare before, I think. Can you point us to a source for it?

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 11th, 2007 at 03:32:07 PM EST
[ Parent ]

Re: Why we agree to pay taxes (4.00 / 2)

Comparing public service in Sweden and France shows that you can have a similar level of quality (if not sometimes better) with less public service employees.
If Bayrou want to fire one third of the French "fonctionnaires", more a reason to vote for him. That means that we'll get to a normal average European level. Anyway it will happen because a large part of the civil servants working for the tax services, collecting TV-licenses etc won't be renewed when going into pension. The simple measure of prelecting tax to the source (France is the last Western Country not to have that system) will produce that and a the same time it will reduce "black jobs". This hasn't been implemented for 20 years for the simple reason that the powerful union at Bercy "didn't want to change its routines".

You don't need an authorisation to have a yard sale in France as a private person. It goes through normally an association (like a sport one, neighbourhood association etc...) which have a general authorisation. The problem is that the system is often misused by professional salesmen to evade tax. So I don't what Bayrou meant, but he probably didn't mean to finance efficiency with that measure. I suppose it was an example and a bad example. He could have taken "the formation professionelle" (mostly education given to unemployed) thet costs round 60 billions Euros yearly and has proven completely inefficient.

France has 2000 billions Euros in debt
The deficit of the trade balance is 30 million Euros
the state cannot longer collect enough money with taxes to provide the basic public services, next year it will have to borrow 20% of the expense.

the latest socialist response is to tax the French abroad ! I thought that DSK was more intelligent than that. One thing is sure, he lost about 250 000 votes.

Regarding the cost of the administration of healthcare in France I am pretty sure of my statement, I'll try to find a link soon.

Sweden had relatively the same problem than France 1995 and was nearly bought by Soros. They kicked about one third of their civil servants. It saved them.

by oldfrog on Sun Feb 11th, 2007 at 06:00:57 PM EST
[ Parent ]

You're increasingly (4.00 / 2)

repeating the mantra of Sarkozy et al, you know...

debt is not 2,000 billion, it's 1,200 billion. Each time, it has increased a lot more under rightwing governments than under socialist governments (like everywhere else). But still at 65% of GDP, it's not out of control. It's the same as in the US, where it's universally seen as a sign of "dynamism" and "trust in the future". Doubls standards
same thign with the trade deficit: does it reflect healthy consumption (and sharing of benefits) à la US or "healthy" "reforms" as in Germany where wages have stagnated for the last many years?
it's not the "formation professionelle" which cost 60 bn euros, it's the sum of all job creation or support schemes, 3 quarters of which are statutoty social charges exemptions. At most, you could play around with 7-9 bn euros. Not nothing, but not quite the same sum. And that's money wasted to corporations, somethign the right loves and encourages at all times
generally, the "we'll cut waste" promises are typical demagogery of the right, which somehow never goes around to fulfill them once in power (quite the opposite). Maybe we need 70 years of the socialists, like in Sweden, to have an ultra efficient State...

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Feb 12th, 2007 at 01:40:27 AM EST
[ Parent ]

Re: You're increasingly (none / 0)

- sorry for the figure it's 1200, it was a typo. It's too much anyway. It was 21% in the late seventies. 77% of the French debt goes to pay the administration, 33% the Healthcare (Sécu). Sign of dynamism ?

Année Dette publique
en % du PIB Déficit public
en milliards d'euros Déficit public
en % du PIB Dette publique
en milliards d'euros

1978 21 % -4,5 -1,3 % 72,8
1979 21 % +0,3 +0,1 % 82,8
1980 20,8 % +0,7 +0,2 % 92,2
1981 22 % -10 -2 % 110,1
1982 25,3 % -14,4 -2,5 % 145,5
1985 30,3 % -21,4 -2,9 % 227,7
1986 30,9 % -25,2 -3,1 % 249,3
1990 35,3 % -24 -2,3 % 363,6
1992 39,8 % -48,8 -4,4 % 440,1
1994 48,9 % -63,1 -5,5 % 564,8
1995 55,1 % -65,5 -5,5 % 657,9
1996 57,6 % -49,8 -4,1 % 707,2
1997 58,5 % -37,8 -3 % 742,5
1998 58,7 % -34,6 -2,6 % 778
1999 58,2 % -23,6 -1,7 % 795,3
2000 56,7 % -21,1 -1,5 % 817,2
2001 56,3 % -23,2 -1,5 % 842,5
2002 58,2 % -48,8 -3,2 % 901,8
2003 62,4 % -66,6 -4,2 % 994,5
2004 64,4 % -60,6 -3,7 % 1069,2
2005 66,6 % -49,3 -2,9 % 1138,4
2006 (estimation) 64,6 % -42,6 -2,7 % 1152
'wikipedia)
the deficit has steadily increased under the Mitterand years and the Jospin years. No difference.

the trade deficit was historically high this year, when France was in excedent 4 years ago. Healthy "à la US" ? You must be kidding, why not invite Walmart and buy more chinese stuff ?
Formation professionelle :

see here it's at least 23 billions in "education that leads nowhere". I got the 60 billions from Jacques Marseille on a recent debate. But I might be wrong.
http://www.lepoint.fr/economie/document.html?did=188859

even if it isn't 60, we are NOT talking about subventions to enterprises.

- The pork in Sweden before its bankrupcy 1995 was cut by their first right wing government (Carl Bildt) in 50 years. It wasn't sufficient, the social-democrats
who won again 1996 had to fulfill the same policies. Remember that Sweden 1994 couldn't pay the interest rate on its debt any longer.

let me state something clearly : I don't defend the right here. I just try to see where the problems are. And it's obvious that France has an archaic administration compared to the Nordic countries. When I came back from Sweden 1999, I found myself proppelled back to the sixties arriving here... paper work, 36 different administrations doing the same thing... I couldn't believe my eyes...

For me the rethoric of those who more ore less defend this system (défense du service public mantra) is the same rethoric from the Swedish communists, not from social-democrats.

Both type of FRench governments tolerate a level of cheating and threats from unions, lobbies etc.. which would never been accepted in any Nordic country, Germany or even the UK. The mentality "somebody is going to make so I don't pay my parking fines" is everywhere...

Failing to say the reality is often fatal.

by oldfrog on Mon Feb 12th, 2007 at 03:40:45 AM EST
[ Parent ]

On the deficit (none / 1)

I personally agree with you that debt should be reduced and budgets more or less balanced (so that they can be used in downturns)

But look at when debt increased the most:
86-88
93-97
02_06

All Chirac/right wing governments.

Who stands a better chance of getting value for money from government? Those that value the output of government, or those that use it as an endless source of subsidies?

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Feb 12th, 2007 at 04:01:12 AM EST
[ Parent ]

Re: Why we agree to pay taxes (4.00 / 2)

Bayrou was talking about improving education by massive investment. Do you really think it would have been intelligent of him to offer to finance it by cutting out vocational training (formation professionnelle)? That would really be robbing Peter to pay Paul, wouldn't it? (And, though, while being wrong about the cost, you may be right that vocational training could be better done, is it possible to totally do away with schemes for re-training the unemployed?)

Generally, it's often been remarked here on ET that it is easy to say: look, Sweden does this, Denmark does that, look at Finland! But much harder to show how systems that have evolved in small, tight, consensual economies like those can readily be transposed to a much bigger economy like the French (British, German, Italian). We should just kick out a third of public servants is the kind of reactionary panacea you can hear in any French town at the bar of the Café du Commerce. It's not a serious proposition.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Feb 12th, 2007 at 02:20:24 AM EST
[ Parent ]

Re: Why we agree to pay taxes (none / 0)

size doesn't matter. Percents do.

by oldfrog on Mon Feb 12th, 2007 at 03:41:58 AM EST
[ Parent ]

Re: Why we agree to pay taxes (none / 1)

So you're assuming Sweden is the same as France is the same as Austria is the same as UK is the same as Denmark is the same as Spain is the same as Germany? No history, culture, specific conditions? No qualitative difference between small countries with a tighter national consensus and much larger ones with a greater spread of opinion?

Yes, percentages matter for purposes of comparison. But you can't evacuate the rest.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Feb 12th, 2007 at 04:28:41 AM EST
[ Parent ]

Re: Why we agree to pay taxes (none / 1)

Most excellent, Jerome!!! A great initiative that should be copied in many ways. I would add my name gladly if I belonged.

oldfrog: that old excuse for the rich to claim "their money is ...very little... and poorly used" is really worn out.

If they have paid their taxes and see a problem, let them start a campaign to change the system. Call, meet, write, write to the papers, send a video! That´s no excuse for the rich to evade taxes, create a "foundation", with their name of course,... and abuse the rest of society, on which they made their money.

It is not very little, it is "what is due".
Applicable and enforceable on individuals AND CORPORATIONS.

Our knowledge has surpassed our wisdom. -Charu Saxena.

by metavision on Sun Feb 11th, 2007 at 03:40:41 PM EST

Re: Why we agree to pay taxes (none / 1)

I don't condone tax evasion
the riches part of the total nation's taxable capital is very little compared to the total wealth

see : http://obouba.over-blog.com/article-3627560.html

even a country like Germany is slightly more "inequal" than France. Of course we haven't reached the Nordic level yet, despite a similar level of taxation. The diagram validates the point made in previous posts. The French taxpayer money goes largely to an inefficient administration of public services. There is no other rational explanation.

"their money is ... poorly used". Don't make me say what I didn't say. It's MY money that is poorly used. As an example, until recently it costed one and half more money to collect the national public service TV license than the total money collected. Finally the Finance minister (Sarkozy BTW) had the genial idea to collect it as a part of the local tax. And OMG, OMG !!!! the TV collectors duties were transformed into other duties within the local tax collection. Of course the unions were there chanting about the "destruction of the public service.
Most riches in France pay their taxes, cases of fraud are minimal. The problem is that they can completely legally nearly "evade" their taxes through a very complicated fiscal system with plenty of wormholes. The interesting part is that this system has never been reformed by any socialist government and plenty of "wealthier" socialists have of course been keen to use it. Besides income tax in France is lower for EVERYBODY than in similar European countries and France is one of the few countries with a tax on fortune, which is payed by a minimum of tax payers.

All this reminds of Sarkozy's son scooter story. Oh horror, the police did a terrible efficient inquiry - with even DNA tracing - when Sarkozy's son scooter was stolen. The same cops would tell Mr Dupont to go and fuck himself in a similar case... the problem is that exactly the same kind of inquiry was done 2003 when Hollande's (socialist party first secreterary) son scooter was stolen... as by magic the socialist criticism against Sarkozy's prerogatives became very quiet when this became known...

"But we are dismayed to see some presidential candidates putting forward demagogic tax measures and justifying the social secession of the richest."
"and cannot consent to tax cuts whose price would be the weakening of the means given to the social protection of the poorest, to education, research, health, housing or to protection of the environment."

I'd like to have specified which proposed tax cuts on the rich (or others) are today threatening the welfare of of the majority of the French... when 20% of the state budget has to be loaned abroad to cover the current depenses...

In my opinion the threat "to the social protection of the poorest, to education, research, health, housing or to protection of the environment" is not primarily caused by the lack of money but by archaic laws, inefficient administration, pork, political cowardice (all parties apply), franco-centrism (cite the Nordic model but avoid to tell people what are the market rules there) and unrepresentative unions protecting their own nomenclatura to the detriment of the majority...

start with solving the above problems and then go and squeeze the balls of the rich. Because in the later case it would be at least REALLY motivated...

by oldfrog on Sun Feb 11th, 2007 at 07:16:53 PM EST
[ Parent ]

Re: Why we agree to pay taxes (4.00 / 2)

All this reminds of Sarkozy's son scooter story. Oh horror, the police did a terrible efficient inquiry - with even DNA tracing - when Sarkozy's son scooter was stolen. The same cops would tell Mr Dupont to go and fuck himself in a similar case... the problem is that exactly the same kind of inquiry was done 2003 when Hollande's (socialist party first secreterary) son scooter was stolen... as by magic the socialist criticism against Sarkozy's prerogatives became very quiet when this became known...

The facts are not quite the same. Sarkozy's son's scooter was stolen off the street. Thomas Hollande was beaten up and had his scooter stolen. Not quite the same.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Feb 12th, 2007 at 01:31:30 AM EST
[ Parent ]

Re: Why we agree to pay taxes (none / 1)

I would be very happy if my friend's Mohammed's son who got beaten up round the corner and whose scooter became stolen got it back through DNA testing. Where do you think I live ? in Neuilly ?

the elites know how to protect themselves, no mater what formal political tendency they belong to.

by oldfrog on Mon Feb 12th, 2007 at 04:14:50 AM EST
[ Parent ]

This is the direct family (none / 1)

of a senior political figure (leader of the largrst party and leader of the opposition). His son was actually beaten up, a slightly rarer crime than that of vehicle theft. Do you find unreasonable to at least have an inquiry?

It's not just a small theft like for Sarkozy's own son. There was actual violence.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Feb 12th, 2007 at 06:26:44 AM EST
[ Parent ]

Re: Why we agree to pay taxes (4.00 / 3)

Excellent idea. Petition signed.

One funny thing: every second week I receive a phone call from a company proposing to help me pay less taxes and I enjoy their stupefaction when I answer I'm glad to pat taxes!

From the experience I have gathered by helping administrations to implement the working time reduction(35 hours), I agree partly with oldfrog: there are a lot of improvements to be made in the French administrations. However, you cannot take it as a whole: some administrations are very efficient and productive (and even lack personnel), others are bloated and inefficient.

In my view, improving the productivity of public services is a republican duty and it doesn't necessary mean less civil servants. It can mean better service in volume and quality with the same number of civil servants.

"Ce qui vient au monde pour ne rien troubler ne mérite ni égards ni patience." René Char

by Melanchthon on Sun Feb 11th, 2007 at 06:35:58 PM EST

Grrr! (none / 1)

I'm glad to pay taxes!

"Ce qui vient au monde pour ne rien troubler ne mérite ni égards ni patience." René Char

by Melanchthon on Sun Feb 11th, 2007 at 06:37:06 PM EST
[ Parent ]

Re: Why we agree to pay taxes (4.00 / 3)

It can mean better service in volume and quality with the same number of civil servants.

Yes!

This is a key point, I think. Instead of laying people off--unemployment benefit, sickness benefit, problems with families, in schools...etc...

Instead of that, just find the unproductive people and...give them new, more-productive tasks. Always thinking in terms of projects: What is the aim? Who do we need to do it? What can we get those who we don't need for this project to do instead?

Maybe there'd be some slack in the system, but overall I think some slack is good... Gives people a chance to regroup, retrain... You have their support (because they're not being threatened with losing their jobs), and you have people in place for the...next task(s).

Don't fight forces, use them R. Buckminster Fuller.

by rg (leopold dot lepster at google mail dot com) on Sun Feb 11th, 2007 at 07:05:33 PM EST
[ Parent ]

Re: Why we agree to pay taxes (4.00 / 4)

I mean, I agree with oldfrog's point about how you can do the same with a third less personnel, and that this extra third is a major financial...cost. But turn it round, see it as a form of re-structuring... If people aren't afraid of losing their jobs/salaries, they'll be better placed (psychologically? Emotionally? Intellectually?) to help find those one-third of improvements. Someone mentioned previously (was it someone ? ;) that because of the relationship between the swedish unions and the employers, they can afford to start projects which don't succeed. They can cut their losses because overall the workers are supported, so they don't hang on to the bitter end when the structure is failing...

Something like that...

Don't fight forces, use them R. Buckminster Fuller.

by rg (leopold dot lepster at google mail dot com) on Sun Feb 11th, 2007 at 07:09:41 PM EST
[ Parent ]

Re: Why we agree to pay taxes (none / 1)

I used to dislike paying taxes, until I used taxes as a indicator for my personal prosperity. So now the more taxes I pay the better off I am. Thus I do not mind paying them anymore. Though at times I am frustrated what they are used for - but that is another topic.

by Fran (fran at eurotrib dot com) on Mon Feb 12th, 2007 at 03:54:58 AM EST

Why we agree to pay taxes | 20 comments (20 topical, 0 editorial, 0 hidden)

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