If the aim is to increase the employment rate, which taxes should be cut?
The French government has decided to reduce a large number of taxes (tax on corporate earnings, corporate social contributions, wealth tax, residence tax, tax on capital income). If the primary aim is to increase the employment rate in France, the tax cuts should focus on those taxes that have a significant effect on employment. We try to identify the taxes that are the most favourable for employment by comparing the employment rate and the weights of various taxes across OECD countries. We find that corporate social contributions are the only tax whose weight is negatively correlated with the employment rate.