In July, some EU Member States launched the program of higher taxation of the different taxes. France concentrated to the rich people and large enterprises "under the knife, Spain, Italy and other countries based on the tax increase of the consumption tax-based. Despite the strengths and weaknesses, but the overall size is not small. The indications are that the policy is to save Europe's debt crisis to the direction of tightening tax increases "two-pronged transition from one fiscal austerity. Tax increase really is a panacea to ease the debt crisis in Europe? Look at the case of France, to raise taxes this double-edged sword, government revenue increased at the same time, there is no synchronous growth of stimulating the economy, but on the real economic development has brought many negative effect.
The new government of France for the realization of the proportion of fiscal deficit to gross domestic product this year from last year's 5.2% to 4.5% to 3% in 2013 to 2017 to achieve the goal of fiscal balance. 2012 amendments to the budget submitted to parliament this month the government launched a ? 7.2 billion tax increase plan, including families with net worth of more than 1.3 million euros to levy an annual property tax, the annual income of more than one million euros crowd The top marginal tax rate of the tax by 45% to 75%, and cancel overtime pay tax-free policy introduced by the previous government. In addition, the oil reserves in the industry to levy a special industry tax, levy a 3% dividend tax on corporate dividends to shareholders in order to suppress the cash dividend, to encourage increased investment in fixed assets.
In fact, tax increases and not linked with economic growth. The French National Statistics and the Bureau of Economic Research data show that France last year's tax revenue reached 534.7 billion euros, an increase of 38.5 billion euros last year, an increase of 7.8 percent, the tax-GDP ratio rose to 43.8 percent from 42.5 percent in the previous year. Taxes a substantial increase in France last year, the public deficit-GDP ratio by 1.9 percentage points lower than last year, reaching 5.2%. The agency expects that the 2012 French tax-GDP ratio is likely to exceed the previously 44.2% of the highest value.
But the agency data also showed this year in the second quarter, the French gross domestic product (GDP) growth rate are 0, the third and fourth quarter qoq growth of 0.1 percent and 0.2 percent respectively, the expected annual GDP growth of only 0.3 %, the trade deficit will reach a record 70 billion euros. In addition, subject to a substantial tax increase, the French annual consumer purchasing power will decrease significantly. The French economic situation due to inadequate fiscal spending cuts, tax increase did not improve, the national debt continued expansion has accounted for 90% of GDP.
French President Fran?ois Hollande, the campaign had promised to raise taxes and increase spending way to stimulate economic growth, resolving the debt crisis. Its ruling at the same time to increase the rich tax is indeed a small increase in public expenditure. Since July 1, the statutory minimum wage in France, up 2%, the minimum hourly wage increased by 9.22 euros to 9.40 euros, increased to 35 hours a week, the legal minimum monthly salary of ? 1,398.37 ? 1,419.87. A sea perch fillets in a bottle of Evian mineral water ? 7 ? 26, ? 25 in Paris a small beef liver, increase the monthly income compared with the lofty price of 21.50 euros, it is "trivial." to boost domestic consumer market, and stimulate economic development, it is a drop in the bucket.
Nevertheless, the adjustment of the minimum wage or higher than the legal provisions to achieve a breakthrough. French labor law, and adjust the minimum wage standard for the protection of the purchasing power of the lowest income, the domestic inflation exceeds 2 percent, according to the legal ratio. After the French government is expected this year, the domestic consumer price index will reach 1.4%, the increase in the minimum wage more than the inflation rate by 0.6 percentage points. French Ministry of Finance data show that in 2011, France has 1.8 million people receiving the minimum salary, accounting for 10.6% of the total employed population, the increase in the minimum wage, annual increases in public expenditure of about ? 465 million.
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