TAX SYSTEM WAR

La compétition entre Paris et Londres ne s’est pas arrêtée aux JO. La question de la fiscalité, relancée au G20, oppose les deux capitales européennes. En quoi Londres apparaît-elle comme un pôle plus attractif pour les entrepreneurs ? Qu’est ce qui explique que la vague des évadés fiscaux français ne se soit pas encore déferlée sur la capitale britannique ? 

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At the G20 meeting, in Los Cabos (Mexico), the “tax system war” was declared between Paris and London. David Cameron, the British prime minister, teased François Hollande about his project of taxing the highest incomes at 75%. He said he would “roll out the red carpet” for the French entrepreneurs who will flee the French tax system and move to London. Indeed London prides itself on being pro-business. Under David Cameron’s behest, the tax rate for firms was reduced from 28% to 24% whereas it is at 33% in France. This accommodating tax system is due to a typically British liberal spirit, which clashes with the war against the “Financial enemy” that Hollande started. So French businessmen come to London to benefit from this uninhibited money-making spirit. And as far as the highest revenues are concerned, David Cameron reminded he reduced their tax rate in order to enhance London’s dynamism and attract investors.

However, French entrepreneurs seem to have chosen Belgium! This could be related to the side effects of the British fiscal system. The problem is not the tax rates per se but how the government uses the money earned through taxes. In this matter, London can’t give Paris any lesson. There is a lack of public investment in education and health, which deters many French entrepreneurs from settling in London. Indeed, the French often understand the meaning of their taxation as it provides efficient public services.  As far as education is concerned, the French system provides high quality teaching, which costs much less than the Private Schools in Great Britain. So the money saved through the British tax system still has to be used in the public services to be on an equal footing with France. That could explain why French entrepreneurs haven’t massively walked the red carpet.

Léa LEGENDRE et Marion SENDERENS

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One thought on “TAX SYSTEM WAR

  1. Pingback: London is closing in upon itself | Frogs Save The Queen

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