ASSESSMENT AND RECOMMENDATIONS
OECD ECONOMIC SURVEYS: FRANCE © OECD 2017
30 2013 and 2014, amounting to between 50 000 and 100 000 jobs created or saved. Reducing
social contributions across the board while giving progressive income taxes a bigger role would be a simpler way to lower labour taxes on low wages. Many expenditures for which
social contributions are currently earmarked benefit society as a whole and would be better financed from the general budget, for example those for families, training, social housing
and non-contributory health insurance. Figure 14. High corporate tax rates go along with low revenues
1. Difference between the pre-tax and post-tax net present values of a one-period investment in each country, computed by taking into account existing tax allowances and statutory rates and assuming a given rate of return, scaled by the present value of the income
stream. The one-period investment is a composite of four assets plant and machinery, buildings, intangible assets and inventories financed by debt and equity.
2. Or latest year available. Source: Oxford Centre for Business Taxation 2017, CBT Database; OECD 2017, OECD Revenue Statistics Database.
1 2
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Figure 15. Taxes on labour remain high
1. The tax wedge corresponds to income tax plus employee and employer contributions less cash benefits. 2. At 67 of the national average wage.
Source: OECD 2017, OECD Taxing Wages Database.
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10 15
20 25
30 35
40
IRL SVN
CZE POL TUR
CHE ISL
FIN KOR GBR
HUN NLD SVK
SWE DNK ISR AUT
OECD NOR CAN
EST ITA LUX CHL PRT GRC NZL MEX AUS DEU ESP BEL JPN FRA USA
A. Average effective corporate tax rates¹
Per cent, 2016
1 2
3 4
5
SVN LVA TUR DEU POL HUN GRC ITA EST FRA FIN USA AUT ESP GBR DNK IRL NLD
OECD ISL
SWE ISR CHE CAN PRT KOR MEX BEL SVK CZE JPN LUX NZL NOR AUS CHL
B. Corporate income tax revenues
As a percentage of GDP, 2015²
10 20
30 40
50 60
CHL NZL ISR MEX KOR CHE IRL
AUS GBR CAN USA ISL
NLD JPN LUX OECD
NOR DNK POL TUR ESP GRC PRT EST FIN SVN SVK CZE ITA SWE LVA AUT FRA DEU BEL HUN
A. Tax wedge on low wages¹
of labour costs, single person no children², 2016
10 20
30 40
50 60
CHL NZL MEX CHE ISR KOR IRL
AUS GBR CAN USA JPN ISL
POL OECD
NOR DNK NLD TUR LUX EST ESP GRC PRT SVK LVA SVN SWE CZE FIN AUT ITA FRA HUN DEU BEL
B. Tax wedge on average wages¹
of labour costs, single person no children, 2016
ASSESSMENT AND RECOMMENDATIONS
OECD ECONOMIC SURVEYS: FRANCE © OECD 2017
31 The personal income tax currently contributes far less to overall tax revenues than in the
average OECD country Figure 16. It combines progressive impôt sur le revenu des personnes physiques and proportional contribution sociale généralisée components. The proportional PIT
has a broader base and generates more revenues, while only 42.8 of households paid the progressive PIT in 2016. Given the limited revenue share of progressive income taxes the tax
system contributes less to the reduction in inequality than in many other OECD countries Figure 17. The new government plans to compensate the revenue loss from the planned
elimination of employees’ contributions for health care and unemployment by increasing the
Figure 16. Structure of tax revenues, 2015
1
1. 2014 for the OECD. 2. Including the contribution sociale généralisée.
Source: OECD 2017, OECD Revenue Statistics Database.
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Figure 17. Taxes have limited effectiveness in reducing income inequality
Reduction in gross income inequality
1
due to household taxes, Gini coefficient points, 2014
2
1. After social transfers. 2. Or latest year available.
Source: OECD 2017, OECD Income, Distribution and Poverty Database.
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Personal income tax², 18.9
Corporate income
tax, 4.6
Social security
contributions, 37.1
Taxes on payroll and workforce,
3.5 Taxes
on property,
8.9 Taxes on
goods and services,
24.4 Other taxes, 2.7
A. France
