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Sarkozy unviels masterplan to kickstart French economy - 6/7/2007 3:57:29 PM   
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Status: offline 		Sarkozy unveils masterplan to kickstart French economy
by Rory Mulholland2 hours, 41 minutes ago



French President Nicolas Sarkozy's government on Thursday unveiled details of an 11-billion-euro (15-billion-dollar) masterplan to "shock" the economy back to life, the first part of his ambitious economic and social reform drive.

The eight-chapter tax and finance bill seeks to exempt overtime work from taxation; make mortgage interest payments tax deductible; all but eliminate inheritance tax; and put a 50-percent cap on overall individual taxation.
It will be debated by the new parliament after this month's legislative election.

http://news.yahoo.com/s/afp/20070607/bs_afp/francepoliticseconomy_070607201444

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RE: Sarkozy unviels masterplan to kickstart French economy - 6/7/2007 4:46:46 PM   
Griswold


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Status: offline 		"The bill also proposes tax credits of 20 percent of the interest paid for the first five years of repayments for home loans."

(Brilliant).

< Message edited by Griswold -- 6/7/2007 5:33:42 PM >

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RE: Sarkozy unviels masterplan to kickstart French economy - 6/8/2007 8:24:10 AM   
philosophy


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Status: offline 		Where's he going to get the money to pay for this from? Or to put it another way, who will be the losers?

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RE: Sarkozy unviels masterplan to kickstart French economy - 6/8/2007 1:27:25 PM   
meatcleaver


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quote:

ORIGINAL: philosophy

Where's he going to get the money to pay for this from? Or to put it another way, who will be the losers?


Well he seems to expect the EU to protect French industry and you can bet your life his reforms don't go as far as wanting reform of the European Agricultural Policy. He has no intention of taking the French snouts out of the trough.

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RE: Sarkozy unviels masterplan to kickstart French economy - 6/9/2007 6:59:31 AM   
Manawyddan


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Status: offline 		After reading about the man prior to the election, I wasn't so crazy about him ... but I definitely preferred him to the socialist he was running against.

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RE: Sarkozy unviels masterplan to kickstart French economy - 6/9/2007 2:45:59 PM   
meatcleaver


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quote:

ORIGINAL: Manawyddan

After reading about the man prior to the election, I wasn't so crazy about him ... but I definitely preferred him to the socialist he was running against.


Time will tell but reading between the lines of his speaches he is a typical French protectionist at heart and will resist opening up the French economy to real competition. Royal was up front about her policies and had a male chauvanist party behind her that wanted her scalp more than they wanted the opposition's scalp which is one of the reasons she looked weak and he looked strong. He has already made compromises but like a true politician he is portraying them as victories.

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RE: Sarkozy unviels masterplan to kickstart French economy - 6/9/2007 3:46:29 PM   
Griswold


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quote:

ORIGINAL: philosophy

Where's he going to get the money to pay for this from? Or to put it another way, who will be the losers?


In order:

Productivity.

There will be none.

(Next?)

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RE: Sarkozy unviels masterplan to kickstart French economy - 6/9/2007 10:10:14 PM   
Sinergy


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Status: offline 		"It is the 63rd anniversary of D-Day.  We are still waiting for the Thank You card, France!" 
Stephen Colbert.

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RE: Sarkozy unviels masterplan to kickstart French economy - 6/11/2007 9:00:44 AM   
philosophy


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quote:

ORIGINAL: Griswold

quote:

ORIGINAL: philosophy

Where's he going to get the money to pay for this from? Or to put it another way, who will be the losers?


In order:

Productivity.

There will be none.

(Next?)


...oddly enough, that was more or less what Thatcher said would happen. Also oddly enough that turned out to be a pile of something not very nice. Is there an example of this happening anywhere in the modern western world where there were no losers?
The old productivity argument never seems to work quite the way they say, in my experience........and the losers always seem to be the most vulnerable.

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RE: Sarkozy unviels masterplan to kickstart French economy - 6/11/2007 11:12:26 AM   
Archer


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Status: offline 		Eliminate the tax on overtime work,

Employees will be more willing to work OT at 1.5 time and have it be tax free too.
Thus Employers will be less inclined to hire new workers and simply offer more OT to their current employees.
That part looks great to Employees and Employers, But those looking for a job will certainly be hurt.

I don't see much of the down side to the other items mentioned in the OP.

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RE: Sarkozy unviels masterplan to kickstart French economy - 6/11/2007 11:13:41 AM   
philosophy


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Status: offline 		......well, the drop in tax revenue may have side effects....or do you think there'd be an increase in tax take somehow?

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RE: Sarkozy unviels masterplan to kickstart French economy - 6/11/2007 11:31:00 AM   
Archer


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Status: offline 		It's a 15 bilion dollar cut the vast majority (5-6 billion) of it being in the OT pay being tax exempt The rest of the items are 1-3 billion dollar reductions in projected revenue.

Seems he wants fo have the consumers spend the nation out of it's problems.

OT pay without taxes will certainly be spent in most cases. (judging by the US worker spending habits).
If it works and jump starts the economy into a spending mode then the loss could be made up later with more folks working as production needs to increase to meet demand.

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RE: Sarkozy unviels masterplan to kickstart French economy - 6/11/2007 11:36:08 AM   
philosophy


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Status: offline 		..would there be a lead time for that process to occur...by which i mean, would there be a year or two with no funding for projects desgined to help the vulnerable?

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RE: Sarkozy unviels masterplan to kickstart French economy - 6/11/2007 11:44:07 AM   
Archer


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Status: offline 		Not framiliar enough with French Government to say for sure. If they can do as the US does and spend in deficit then maybe not. But that seems to not be a great option for them since the EU is taking them to task for their debt level as it stands according to the story.

I know that we took a year or two to spend out way out of the recession back when the dreaded Bush Tax cuts came into effect. So a couple years of reduced services with the associated incease in middle class spending vs slowly derading services with increased demands for services, while hoping something will spur the economy organicly.

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RE: Sarkozy unviels masterplan to kickstart French economy - 6/11/2007 11:49:05 AM   
philosophy


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Status: offline 		..seems to me we're back to vulnerable people paying the cost though........

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RE: Sarkozy unviels masterplan to kickstart French economy - 6/11/2007 11:59:19 AM   
Archer


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Status: offline 		Well Since we don' have any details as to what services are going to be cut we don't know who will "suffer".
Since it applies to OT pay I would assume it won't be upping the incomes of upper middle class but rather it will be upping the income on hand of the lower middle class and the lower class. Up till the point of the unemployed. (5 hours a week OT without taxes would likely make up for alot, In fact it could put enough people over the hump of needing the services to make those remaining be able to maintain their current levels. (I'm sure that is the hoped for result)

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RE: Sarkozy unviels masterplan to kickstart French economy - 6/11/2007 1:04:56 PM   
meatcleaver


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quote:

ORIGINAL: Archer

Eliminate the tax on overtime work,

Employees will be more willing to work OT at 1.5 time and have it be tax free too.
Thus Employers will be less inclined to hire new workers and simply offer more OT to their current employees.
That part looks great to Employees and Employers, But those looking for a job will certainly be hurt.

I don't see much of the down side to the other items mentioned in the OP.



The sole aim of eliminating tax on overtime is to increase productivity not jobs. What Sarkozy has to do to encourage companies to take on more workers is to get rid of some of the job protection because at the moment it is almost impossible to fire someone in France. Also Sarkozy needs to decrease the social security costs of employing someone. Both of these factors in France have seen many companies move to Britain or register in Britain and pay the lower social security costs there. Sarkozy also needs to cut the bureaucracy that makes starting up a new business in France a nightmare, a reason that has caused thousands of young people wanting to start up new businesses to move to Britain to do it. There has been an exchange of population between France and Britain, Brits going to France to buy holiday homes or retire and young entreprenurial French moving to Britain. Needless to say, Britain has done better out of this deal than France, something that wrankles with Sarkozy.

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RE: Sarkozy unviels masterplan to kickstart French economy - 6/11/2007 1:17:32 PM   
Archer


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Status: offline 		The initial reason for making OT pay at time and a half a law was to encourage companies to hire more workers rather than work the ones they have harder and longer. The subtext was that the employers were working thier employees too long and the welfare of the workers was suffering in the form of accidents/ lack of family time/ etc.

I have no real problem with paying OT and If you want to target relief to the lower and midle class this is certainly one way to do it. (upper class tend to be salary and thus not get paid OT to begin with).

Now very short term it will reduce hireing in the established jobs market. If the workers can get OT pay tax free they will certainly try to work alot of OT which will slow down the new hires for established job market.

(Owner says I need another worker to get the productionI want. Employees say hey just pay me the OT I'll get the job done and you don't have to spring for training and a new employee's overhead.)

The exodus of new start up businesses may well be true, wasn't part of my "instantly availale information" But this OT thing will do only a little to help that. You gotta remove the barriers to new start ups. And certainly France has a reputation for being excessively tight on employers for taxes. Even the article said flatly that the changes would bring France more into line with what the rest of europe does as far as taxes. (trusting the article is at least that accurate)

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