By Patrick Artus
The supply-side policies implemented in France since 2017 are many and varied:
- reduction in production taxes (halving of the CVAE, the business value-added tax);
- lower corporate tax rate (from 28% to 25%);
- abolition of the wealth tax (ISF) ;
- creation of a single flat-rate withholding tax (PFO) on capital income;
- degressive exemption from social security contributions from 1 to 3.5 SMIC ;
- reduction in the duration and amount of unemployment benefit ;
- professional training reform ;
- reform of the labor market (favoring company agreements).
The estimated cost of this policy since 2017 is €60 billion a year.
There are many critics of this supply-side policy who argue that it has been ineffective.
We analyze this point and defend the idea that other factors have played against the recovery of productivity in France: deterioration of the education system, weight of regulations and standards, high cost of labor.
