L'Ombre de l'Olivier

The Shadow of the Olive Tree

being the maunderings of an Englishman on the Côte d'Azur

01 September 2006 Blog Home : September 2006 : Permalink

French Taxation

Catthy Seipp's Independent Women's Forum column is all about hiring help around the house. Its good in lots of ways and makes some excellent points about the pros and cons of such help. As someone who recently buckled to spousal pressure and hired a gardner I can say there are good reasons why hiring one makes sense, these guys are far far more effiicent at what they do than I am - I pay them for 4 hours work but if I tried to do the same it would take me 6 so it's worth it.

However she makes one tiny errorette:

What the U.S. government should do, Crittenden suggested, is follow the example of France, with its free health care and subsidized cash allowances for each child. (France's stratospheric tax rates, of course, are never mentioned in these fantasies about a better world for you and me.)

France's tax rates are not necssarily stratospheric - they can be if you fail to arrnage your affairs well but they don't have to be anymore than US ones do. Actually a family with children in France tends to be taxed less than in the US, particularly less than California (where I used to live), NY or the Peoples Republic of Massachussets.

Ironically for the feminists who seem to like the "French model", the French tax scheme works best for a "traditional" family with a stay at home mother looking after the (for optimum benefit) 3+ children. Obviously if you start making telephone number salaries then even this isn't going to help but for the average middle class or working class family it does. I reckon you need to earn close to €80,000 per person in your houshold (i.e. €400k=US$500k for a 2 parent + 3 child family) to start hitting tax rates that are as punitive as top rate CA ones. And yes in both US and Franch cases you can of course arrange affairs to avoid some of the top band some of the time.

Where France goes loopy is in corporate taxation and even more especially in legislating restrictive employment contracts, but its individual taxation is comparatively rational most of the time. Now it is true that social security charges muck this up - especially for the self-employed and small businesses - and hence these people all work "sur le black" as much as possible, but French taxes are nothing compared to the taxes in Germany (or, as I understand it, Belgium or Holland). Indeed a number of fellow expats reckon that the tax regime is more favourable in France than it is in the UK thanks to Mr Brown's years of stealth increases here and there.

I despise l'Escroc and Vile Pin