|
In 2014, the average French worker will
be working until July 28th to finance government spending, i.e. 2 days longer
than last year
Despite calls
for a tax freeze, France continues to hold the record for average worker
taxation, alongside Belgium
Using data computed by ERNST
& YOUNG, Institut
économique Molinari has calculated the tax liberation days for the European Union’s 28 countries.
The survey’s 5th edition shows that:
French employees will be released from their social security and
tax contributions as of July 28th 2014, i.e. two days later than last year.
France is one of two countries that tax employees at the highest
rate, just behind Belgium.
2014 TAX LIBERATION DAYS
March
|
|
April
|
|
May
|
|
June
|
|
July
|
|
August
|
|
|
|
|
|
|
|
|
1 Romania
|
|
|
|
|
|
|
|
|
6 Portugal
|
|
|
|
6 Belgium
|
|
|
|
|
|
|
7 Denmark
|
|
|
|
|
|
|
|
|
|
|
8 Slovenia
|
|
|
|
|
|
|
|
|
|
|
10 Estonia
|
|
|
|
|
|
|
|
|
|
|
12 Spain
|
|
11 Germany
|
|
|
|
|
|
|
12 United Kingdom
|
|
13 Croatia
|
|
|
|
|
|
|
|
|
|
|
14 Poland
|
|
14 Greece
|
|
|
|
|
|
|
18 Bulgaria
|
|
18 Lithuania
|
|
16 Hungary
|
|
|
|
|
|
|
|
|
19 Czech Republic
|
|
|
|
|
21 Cyprus
|
|
|
|
|
|
20 Finland
|
|
|
|
|
|
|
|
|
|
|
20 Latvia
|
|
|
|
|
|
|
|
|
|
|
20 Slovakia
|
|
|
|
|
|
|
|
|
|
|
21 Nether-
lands
|
|
|
|
|
|
|
|
|
|
|
23 Sweded
|
|
25 Austria
|
|
|
|
|
28 Ireland
|
|
|
|
|
|
|
|
|
|
|
28 Malta
|
|
30 Luxembourg
|
|
30 Italy
|
|
28 France
|
|
|
KEY LESSONS
The average tax levy on employees continues
to grow as a result of fiscal
austerity policies.
In 2014, the average worker’s real tax rate reached 45.27%
in the EU, an average increase of 0.21% on last year and of 1.27%
since 2010, when the study series
began.
This average conceals different trends
across different countries. 15 EU
countries have contributed to the tax burden’s
increase, while 9 others pulled the figure down.
While some governments have continued
their policy of higher social
security costs and taxes, introduced in the wake of the 2008-2009 financial crisis, others are
moving in the opposite direction.
The largest increase took place in Greece, where the pressure from social security costs and taxes rose from 45.98%
to 53.33%. The largest drop was in Italy, where
total levies went down from 52.12% to 49.55%.
French employees,
virtually the most heavily taxed in the whole European Union
Just like last year, the most voracious tax
collectors are Belgium and France.
The tax burden in those countries will
stand at 59.60% and 57.17%, with tax liberation days on August 6th and July 28th
2014. They are followed
by Austria, Hungary, Greece and
Germany, with tax burdens ranging from 56.20% to 52.38%
and tax liberation days between
11th and 25th July.
On paper, the typical French worker
is among the highest paid (€ 55,314), but his social security
payments and taxes are also particularly high (€
31,620). Payroll taxes alone (€
27,710) are higher than his purchasing
power (€ 23,692), a record
ratio for the European Union.
The sheer scale of these levies helps
explain the tensions between French bosses and employees. The former look at the total payroll, including mandatory employers'
contributions to be paid on top of gross wages,
while the latter worry about their
take-home income. Employers thus legitimately claim that they spend a lot on
their employees, while these often
feel that their contribution is not adequately
recognized.
The disconnect between
level of taxation and quality of
public services
Many studies, in fact, show
that France obtains mediocre scores on a variety of global indicators, despite its high levels
of taxes and public spending.
This is true of
competitiveness-oriented surveys:
Ranking countries according to the
ease of doing business there, the
World Bank has placed France in
38th position out of 189 countries (down 4 places relative to the previous edition).
Within the EU, it had assigned France the 15th position out of 28 (down 1 place).
The World Economic Forum, meanwhile, ranks France 23rd out of 148 countries (down 2 spots). Within
the EU, it puts France in 9th position out of 28 (down
by one place).
Indicators that focus on quality of service or quality of life reveal a similar picture:
The United Nations ranks France 20th out of 177 countries
in its Human Development Index report.
At 8th place, France’s standing within the EU is not on a par with
its public spending. Indeed, nations
with a lower tax burden than France got similar
HDI scores (Austria, Finland, Slovenia, Denmark) or significantly higher scores (Germany,
Sweden, Netherlands).
A comparison with OECD nations tells a similar story. The latest
edition of Better Life also reports
less-than-impressive performance by France. Based on an average of the various criteria it uses, the OECD places France 18th out of 36 countries surveyed. EU-wide,
France ranks 11th, and is outperformed by several countries with lower taxes (Ireland, United Kingdom, Luxembourg,
Denmark, Finland, Netherlands,
Sweden, Germany or Austria).
All this suggests that France’s
high labour costs and tax pressure
cannot be explained by
better-than-average services and, instead, that
its public and
social benefits are anything but
“cheap”.
Quote by Cécile Philippe
(Director of Institut
économique Molinari (IEM) and co-author)
“France’s situation is
very worrying. Despite calls for a tax
freeze, the tax pressure has been constantly growing.
In 2014, the tax burden on the average French worker
has increased significantly, in
contrast to what happened in Italy, the Netherlands,
Belgium, Germany and the United Kingdom.
And despite a tax grab the like
of which we had not seen since 2010, public accounts still record a deficit and
government debt is sky-rocketing. Once virtuous France has joined the
club of Europe’s most indebted
countries.
Incapable of reforming itself, France
is seen as the EU’s sick child, hence its
declining influence compared with its
neighbors, who have been able
to rethink their policies and
lower their public spending” says Cécile Philippe.
* *
*
This study was prepared by
Nicolas Marques, Cécile Philippe
and James Rogers of Institut économique Molinari (Paris,
Brussels) based on published Eurostat and OECD data. Payroll
tax calculations were made by Ernst & Young Belgium.
The report is available in French at: http://www.institutmolinari.org/fardeau-social-et-fiscal-de-l,1906.html
The English version is available at:
http://newdirectionfoundation.org/content/2014-tax-liberation-calendar-2014-steuerzahlertagkalendar
|
|