We understand why public opinion rejects "optimal" taxation in France

We assume that optimal taxation aims at correcting scarcities and externalities. The components of optimal taxation in France are therefore: An environmental tax, since CO 2 emissions are too large and the spontaneous price of CO 2 is too low; A reduction in companies’ social contributions, since this goes hand-in-ha nd with a rise in the employment rate and since the employment rate is abnormally low in France; A reduction in taxes on capital, which will encourage companies to invest more in sophisticated equipment that increases capital income, given the shortfall in these sophisticated investments in France. This "optimal" taxation (environmental tax, reduction in companies’ social contributions and in taxes on capital) is the one that Emmanuel Macron has proposed. It is unfortunately rejected by public opinion because it : Taxes the insiders (those who have kept their job s ) to the benefit of the outsiders (job seekers that would return to work), and because public opinion is dominated by the insiders’ preferences; Reduces the tax burden on those who receive capital income, who on average have high incomes. The political feasibility of implement ing an optimal tax reform in France is therefore low.