In a very fragile French economy, the 20 billion euro increase in taxes on businesses will have negative consequences on investment, reindustrialization and employment, warned the Minister of the Economy. Many sectors of activity have already announced that they are suspending their projects in France.
“Be careful of excess tax!” The Minister of the Economy created controversy with his short sentence this Thursday in the columns of Le Parisien. Did Antoine Armand shoot an arrow at Michel Barnier? Was this a warning to MPs?
What if, more simply, Antoine Armand had addressed all French people to tell them that we will not solve budgetary problems by “taking the money where it is”. In this case in company coffers.
Since the start of the debates on the 2025 Budget, the Macronist minister has noted this fiscal inflation. Every tax increase finds a justification. The corporate tax surcharge? This only concerns very large profitable companies which must participate in the effort. Tripling the tax on plane tickets? Good for the environment since it is a CO2 emitting sector. The planned increase in the mobility payment on public transport? This is to help local elected officials complete their budget while property tax revenues are at half mast.
But when we add up the planned tax increases, we arrive at 20 billion euros. Not to mention possible increases in contributions on low wages. They are also very well justified by their promoters. It is a question of “de-risking France” by smoothing the degression curve of reductions in charges.
Companies are sounding the alarm
Why target businesses? Because it is almost politically painless, a company neither demonstrates nor votes. At least not with a ballot in a box.
Because a company still votes but by another means: with its checkbook. Site closures, investment cancellations, hiring freezes, layoffs… The consequences of the companies’ “vote” are ultimately the French who suffer.
And it has already started, even though the tax increases are not effective. Since April, according to the Trendeo firm, the balance between openings and closures of industrial sites has been negative for the first time in years. In other words, over the last six months there have been more factory closures in France than openings.
In an already complicated situation with numerous social plans announced in recent months, certain sectors are sounding the alarm. Like that of medicine. The French chemist Seqens, who is in the process of relocating paracetamol production to Isère, explains in Les Échos that the sector is ready to leave France again.
In the air, Ryanair has also warned. In the event of a tripling of the transport tax, the company is seriously considering reducing its presence in France by half by leaving ten airports.
Michelin had warned the deputies
Empty threats to put pressure on the government and the legislator? Nothing is less certain.
The case of Michelin is illuminating in this regard. Last September, Florent Menegaux, the president of the tire manufacturer, was questioned by deputies of the Economic Affairs Committee on salary policy at Michelin. In a precise and quantified educational exercise, the manager explained that an employee in France cost him 20% more than the same one in Germany, on average.
He added that its production costs were 20% higher in Europe than in the United States and double those in Asia due in particular to the much higher standards on the Old Continent. For example, he cited the obligation of traceability of rubber for European companies which would cost Michelin 200 million euros per year.
A detailed presentation of the loss of competitiveness of his group in France. This did not prevent the deputies from voting for a battery of new taxes, against the advice of the government. Michelin has since announced the closure of two sites in the country. More than 1,200 employees are affected.
