Friday, July 13, 2007

Regressive Taxation in France

Henry Farrell calls attention to an interesting paper by Kimberly Morgan and Monica Prasad comparing the historical evolution of the US and French tax systems. Contrary to the image d'Epinal, the US tax system is more progressive than the French and falls more heavily on capital than on labor. Morgan and Prasad attempt to explain why this is so. Worth reading.

2 comments:

kirkmc said...

19.6% VAT on most goods and services - that taxes capital? If only for VAT (not to mention charges sociales, that generally aren't considered "taxes" in the same way income taxes are) this concept seems eroneous. I have no background in economics, but I know what I pay in taxes in France, and as a profession libérae to boot, which means I pay much more in charges sociales than employees...

Unknown said...

I think you misunderstand the abstract of the paper. The authors assert that the US tax system bears more heavily on capital, the French on labor. Hence you are correct to complain that the VAT is not only regressive, its incidence is on labor.