the president of Medef opposes the increase in labor costs and calls for the establishment of a “social VAT”

The president of Medef, Patrick Martin, denounced, Saturday November 16, in The Parisian and “recessive budget” and advocated the establishment of a “Social VAT”warning that with the planned tax increases, French companies risked hiring less and cutting jobs.

“If we combine the 4 billion euros in reductions in charges, the 2.5 billion euros transferred from health insurance to supplementary health insurance – and, therefore, to businesses –, the 1.5 billion euros Euros of savings on learning aid means an increase of 8 billion euros in labor costs. Which corresponds to the average gross annual salaries of 300,000 employees”estimates the leader of the first French employers' organization.

“If companies no longer have this money, they will inevitably hire less, cut jobs if necessary and they will not be able to increase salaries as much as they would like”he warns.

Comparing the “tax surcharge” on large companies in France “the reduction to 20% of the corporate tax rate” announced by the elected American president Donald Trump, the boss of Medef believes that “the gap (…) will further deepen with the United States ».

“Balance of efforts”

“Between tax increases and job creation, we have to choose. As written, this budget is recessive”advances Patrick Martin in a speech, contrasting with the position displayed until then on the budget, according to which businesses were ready “to contribute to the war effort”.

“The government had promised a balance of efforts: a third coming from taxpayers, including businesses, and two thirds from a reduction in State structural spending. In reality, in the current project, it is quite the opposite (…). The conditions are therefore not met”he justifies.

Rather, he advocates a “Social VAT” : “why not think about reducing contributions on salaries and increasing VAT by one point, except of course on essential products”. “This would bring in around 10 billion euros to the State and would have the merit of reducing labor costs and increasing the net salary of all employees. Additionally, VAT applies to imports but not to exports. What promotes French competitiveness »also says Patrick Martin.

The centrist senators, an important force in the majority in the Senate, proposed the week of November 4 to 10 to increase VAT and working hours in the budget debates. “To rebalance the effort”Patrick Martin also suggests “make another arbitration between retirees and active workers”believing that “Parliament lacked political courage” on the indexation of pensions to inflation.