Under-Performing French Economy To Undergo Fiscal Overhaul

By Stewart Douglas

France are preparing to implement radical new fiscal measures to boost economic growth by an estimate half percent in 2008.  The proposals will drastically overhaul employment, scrap around 10billion in tax revenues as a stimulant to the rather stagnant economy.  After years at the rear of the European field, French Economy Minister Christine Lagarde has said it’s time for France to stop thinking on a conceptual level and start implement real economic policies to get the economy moving.

The proposals include encouraging French workers to increase the duration of their working week through offering a package of tax breaks and incentives, as well as imposing a ceiling 50% income tax to hold on to the wealthiest would-be tax exiles.  Taxes will also be scrapped for inheritance purposes and overtime pay, whilst homeowners will now be able to deduct the value of mortgage payments from their taxable income.

Despite the widespread agenda for change, the French authorities have been criticised for placing an emphasis on regressive taxation, and providing merely for the wealthy.  Largarde suggested that the countries heavy income tax burden, as well as the bureaucratic employment process act as a thorn in the side of business, and push the highest earners into neighbouring countries with less arduous taxation laws.  By streamlining taxation and removing much of the red tape associated with trade in France, the government hope to give an otherwise stale economy a new lease of life over the coming years, attracting increasing foreign investment and encouraging the all important tax-exiles to return to their native country, whilst promoting a stronger work ethic amongst the people of France in line with that of their European counterparts.  The plans, unveiled on Tuesday, are expected to be passed through the French parliament by the end of the Summer, before implementation can begin.