Wednesday, January 2, 2008

The Social VAT Returns

Eric Besson, the Socialist Judas who jumped ship in the midst of Ségolène Royal's campaign, turned his coat, and joined the other side in time to denounce his erstwhile championne in a much-publicized and quickly forgotten book, may no longer appear to be such an opportune acquisition to his new comrades. Today he revived the social value-added tax, or social VAT, which has been rebaptized the "anti-delocalization tax" to make it more palatable to beleaguered consumers at a time when the government is emphasizing purchasing power rather than tax reform--the demand side rather than the supply side, if you will. To Besson, the social VAT seems "inevitable"--and indeed, some form of tax increase is inevitable if France is to meet the terms of the EU Stability and Growth Pact while maintaining the Sarkozy tax reform package known as TEPA (Travail, Emploi, et Pouvoir d'Achat). Besson's candor is noteworthy, but his timing could not be worse for the majority, with municipal elections looming on the horizon. After all, it was François Fillon's (correction: Jean-Louis Borloo's--see Justin's comment) inopportune mention of the social VAT that many believe cost the majority 50 or more seats in the last legislative elections. Besson's statement is a gift to his former party, the Socialists. Some in the UMP may be asking whether Besson was a fifth-columnist, or simply un misanthrope so devoted to inexpedient truth-telling that he can't see where his interest lies. If there is a rejiggering of the cabinet anytime soon, expect Besson to be shown the door.

4 comments:

Anonymous said...

Credit where credit is due:
it was Jean-Louis Borloo's (not François Fillon's) inopportune mention of the social VAT that many believe cost the majority 50 or more seats in the last legislative elections. Fabius largely tricked him into mentioning the social VAT during a televised debate. People say that's why he was "promoted" to environment rather than the more influential Bercy that he first held after Juppé lost the election in Bordeaux (and Bercy by the same stroke of faith).

Unknown said...

Thanks for the correction--I made this same mistake once before. Just can't seem to keep from blaming Fillon.

Unknown said...

But will social VAT work?

The only paper I can find on its principles is at: http://www.faxfn.org/03_jobs.htm

Anyone know of anything better?

Unknown said...

The principal report in favor of the TVA sociale is by Eric Besson:
http://www.premier-ministre.gouv.fr/IMG/pdf/TVA_sociale_rapport_remis_par_Eric_Besson.pdf