Congratulations on the victory. Now comes the next goal: Saving France! France has long switched back and forth between socialists who were prevented from fixing France because they needed the support of the unions, and conservatives who spent all their energy needlessly fighting the unions, believing they had to crush the unions like Thatcher did.
But the biggest problems in France aren’t the unions. The biggest problems is the horribly complicated tax system and all the rules and regulations that prevent people that need work to create their own jobs, while at the same time making it possible for rich people to avoid paying taxes.
I lived and worked in France between 2003 and 2010, and I have also worked in Sweden, Norway, Iceland and now Poland. I’ve therefore seen several different solutions to company laws and taxes. And France’s is a mess.
In international rankings France gets high points for being business friendly. For example it’s quick and cheap to start a company. But that’s only if you know what you are doing. I’ve had companies both in Sweden and Poland and in both cases starting a company was a straightforward process. In France it took me almost a year and two accountants to start a company, forcing me to work through my Swedish company for that first year. The main hurdle was figuring out what type of company to start. There are so many types of companies in France that even my accountant didn’t know how many it was, but it was at least twenty different types. All with their own tax plans and tax deductions and incentives. A programmer can not have the same company type as a software developer, because the latter has to deal with copyright and therefore ends up as a different company, and even different social security structures. When I was employed in France my employer changed company types at least twice, because there was certain company types that get tax deductions for innovative work, but only for two years. So they had that structure for two years, then switched to another one that had other benefits.
All this is absurd. A country needs only two to four types of companies: Firstly, single owner, full liability companies, where there is no practical difference between the owner and his company, typically used by small businesses. And secondly, multiple owner, limited liability companies used for bigger companies where investors and banks share the risks with the owners. You can also have multiple owner full liability companies, used for family businesses, farms etc, where the owners are fully responsible for the economy of each others, and lastly single owner limited liability companies. But these two types are not necessary, Sweden for example does not have this last type of company.
By simplifying the company tax structures you make it easier and faster to start companies, people who have business ideas can more easily learn what is necessary and you free up the time of those working in the tax authority so they are less overworked. By removing all kinds of different tax structures, incentives and tax credits you make it harder for companies to evade tax, increasing the tax revenue. Everyone wins. Well, maybe except accountants, who definitely get less work. I think France can live with that.
And if it wasn’t enough that companies can evade taxes in France, the owners also can. Everything in France is a deductible. My accountant told me to save the receipts when I bought a Whiskey as a present to my step-father, because I could claim it as a company cost. I know of company owners who have credit at the butcher and gets an invoice once a month, claiming it to be for a company event. France should here do what Poland has done: No deductions for food or drink of any kind. I love the famous three-hour business lunches, but I eat lunch every day, it shouldn’t be a tax deductible.
The combinations of all the tax deductions meant that even though my tax rate in Poland is just 19%, I still pay a higher tax here than in I did in France. And here lies the main problem with the economy: Only those who are employed pay the taxes they should. Fix that, and you fix the economy. Make any income pay the same amount of tax. It’s fair, good for the economy as a whole, and the unions should love it. Does that mean that businesses will hate it? Not at all. A simplified tax structure makes their job easier as well, as it’s easier for them to predict how much taxes they need to pay and they don’t have to spend time and money to evade taxes, because they can’t anyway. And most importantly, it makes it easier to start a company, giving extra opportunities for youth with ideas to create their own income.
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