Report
The French model does not work, so proposals to make it even worse should be avoided
Compared with other OECD countries, France has: A very high tax burden, especially on companies; Very high income inequality before redistribution; Which are explained not by a high income level but by a low employment rate; As a result, very significant redistributive policies, which explain the high tax burden, leading to low income inequality after redistribution. This model does not work: the correction of inequalities leads to a high tax burden, which leads to a low employment rate and generates even greater income inequality (before redistribution). So, in the future it is crucial to: Not make this vicious circle even worse by further increasing the size of the redistributive policies; Focus on economic policies that can drive up the employment rate and not on redistributive policies, which will become less necessary if the employment rate rises.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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