Tuesday, September 2, 2008

Piketty Attacks the RSA

Economist Thomas Piketty is strongly critical of the Revenu de Solidarité Active (RSA). He ignores the new tax proposed to finance the RSA and goes straight for the heart of the measure itself. It will, he argues, reduce the incentive to move from part-time to full-time employment. But his central criticism is that it will not eliminate the complexity and "illegibility" of the current hodge-podge of assistance to the working poor and unemployed.

Piketty couples his critique to a call on the Left to seize on this issue as the centerpiece of an ambitious program of tax overhaul and welfare reform. Politically, we are through the looking glass. The RSA originated in the Socialist camp. Sarkozy co-opted Martin Hirsch, one of its sponsors, and made the idea his own. Now that it seems likely to be extended to the entire country--a move that many Socialists, such as François Hollande, are calling a success--a leading Socialist economist has gone on the attack to say that it was always the wrong idea, and that what is really needed is a comprehensive new tax and incomes policy.

It's probably a good idea to pitch the future economic policy of the PS toward comprehensive reform, but, if so, a critique of the RSA strikes me as rather too small a peg to hang it on. It's also tactically unwise to undermine the RSA on the point of implementation, since it was a part of the PS platform in the last election. Still, Piketty deserves credit for trying to move the debate in a more productive direction.

1 comment:

Anonymous said...

Thus not only does the RSA represent another unwelcome tax burden it also appears to be counter-productive.
No doubt, in the original proposal the RSA works in theory - and theory always trumps practice. At least in France it does. ;-)

Chris P.