A-Infos (en) France, OCL CA #353 - Economic Brief - We've found the money! (ca, de, fr, it, pt, tr)[machine translation]

Bayrou's budget wasn't just an austerity budget; it was a class war 
budget. Lecornu's budget is bound to be very similar, depending on what 
the movement that's starting to take shape in September manages to wrest 
from him. ---- Let's start with the thing that's already been scrapped: 
working two extra days for free. Explain to me how that fills the state 
coffers (we can clearly see how it fills the corporate coffers), except 
in a very indirect way. Obviously, there's no question of them going 
back on the retirement age of 64 or the required contribution period (in 
countries where retirement is later, contribution periods can be 
shorter, resulting in much better pensions). Bayrou also proposed 
nothing less than freezing social benefits, including pensions. And so 
the tightening of the screws on social welfare recipients continues 
under the guise of cracking down on fraudsters, and so the failure to 
replace retiring civil servants continues, and so the dismantling of the 
Labor Code continues... With just a tiny pinch of taxes on the wealthy 
to make it look good. Let's remember that the wealthiest pay 
proportionally less tax on their income than modest households. And 
that's untouchable!

I suggest we don't dwell too much on the state deficit, which would 
require an article of its own to explain. Admittedly, the public debt 
represents 114% of GDP[1]. By that measure, it's best to live in 
Bulgaria, where the public debt represents only 24% of GDP. I suggest 
you go and explain to the Bulgarians how their situation is so much 
better than ours. In fact, the debt is largely long-term; we only have a 
portion to repay right now. Debt servicing, meaning what's spent on 
interest and loan repayments, represents 7% of the state budget, or 
about 1% of GDP. So, yes, there is a debt problem, but no, let's not 
exaggerate, the situation isn't that dire. What's lowering France's 
global credit rating is, firstly, that financial markets abhor political 
uncertainty, and secondly, that they still want to exert pressure to 
align with the policies they advocate (the two are contradictory, 
everyone agrees).

Bad timing for Bayrou and now for Lecornu (if he's still around when you 
read this): the Senate has released a report on aid to businesses. 
Because, get this, this government that's forcing us to tighten our 
belts was unable to say how much it was paying to businesses. Mind you, 
it wasn't exactly a state secret. The thing is, he'd never actually done 
the math. And that, even from the perspective of sound capitalist 
management, is a bit much. Very much so, in fact, when you consider that 
after six months of investigation, the Senate estimates the amount at a 
minimum of EUR211 billion for one year. Others estimate it at EUR270 
billion[2]. The difference stems from the fact that the Senate didn't 
include tax exemptions in its aid estimate. We're not talking about tax 
cuts for the wealthy or corporate tax. We're talking about subsidies, 
tax and social security exemptions, tax credits, in-kind aid... from 
both the state and local authorities. And obviously, when you don't even 
know how much you're paying out, it means you can't possibly monitor how 
companies use it. In fact, while these subsidies are subject to certain 
conditions, there is most often no conditionality whatsoever. This means 
that once the right boxes are ticked, there is no obligation regarding 
the use of the aid, and therefore no oversight. This is an aberration 
from a purely managerial perspective.

The Senate identified more than 2,200 business support schemes. And it 
only focused on large companies. I quote from the excerpt of its 
mission: "to establish the cost of public aid granted to large 
companies, defined as those employing more than 1,000 people and 
generating a net worldwide turnover of at least EUR450 million per year, 
as well as the cost of aid paid to their subcontractors." The EUR211 
billion figure, therefore, applies solely to large companies. 40% of the 
aid comes from municipalities (or inter-municipal bodies), 25% from 
regions, and 20% from the national government. The report cites several 
examples of companies that laid off employees after receiving 
significant public aid: Auchan, Michelin, ArcelorMittal, 
STMicroelectronics, and LVMH. While the rapporteur, Fabien Gay, a 
Communist senator, has been very vocal about this aid, the chairman of 
this committee is Olivier Rietmann, a Republican senator, who has 
undoubtedly been careful to ensure that the companies are not unfairly 
accused.

There are, therefore, three particularly important sources of the public 
deficit, which should not be confused with one another. First, public 
aid to businesses, as we have just seen. Second, the reduction in 
corporate tax. Indeed, between 2016 and 2022, the standard corporate tax 
rate fell from 33.3% to 25%. The effective rate (in accounting jargon, 
the gross implicit tax rate) decreased by 3.2 percentage points. But 
averages are always misleading. This rate for small and medium-sized 
enterprises (SMEs) fell by only 1.7 percentage points over the period, 
settling at 21.4% in 2022. The rate for micro-enterprises increased by 
0.4 percentage points over the period, reaching 19.0%. It remains higher 
than that of large companies, which fell by 5 percentage points to 
14.3%. So, we are still following the same trend. Large corporations pay 
the least tax and have seen the greatest tax decreases, while 
micro-enterprises have seen tax increases. Finally, there's the 
reduction in taxes for the wealthiest individuals. This is not the same 
thing. Corporate income and the assets of their owners are separate. 
Owners receive a portion of the profit after corporate tax has been 
paid. In fact, it's precisely because of this that they don't pay. 
Indeed, the Constitutional Council argues that this would constitute 
double taxation. Taxing the wealthy is not taxing corporations. It's 
taxing their owners. We're told that in these times of globalization, 
taxing them would force them to leave. We don't care; they're not the 
ones hiring, their companies are. And when you're wealthy, you generally 
choose where you live regardless of financial considerations. Hence the 
idea of the Zuckman tax. This isn't a revolutionary idea, and many 
capitalist countries have already implemented it throughout history. 
According to the Inequality Observatory, the combined wealth of the 500 
largest business owners and their families increased 9.3 times between 
2003 and 2023. Taxing them at 2% per year wouldn't bankrupt them; it 
would only slightly slow the growth of their fortunes.

So, as we can see, the deficit is just a pretext to strip us of our 
social gains. It's an episode in the class war. And simple measures like 
controlling corporate subsidies and the Zuckerberg tax would largely 
solve the problem. These measures would simply be good capitalist 
management to maintain social peace. But what we need to understand is, 
first and foremost, that employers want to bring us to our knees so they 
can intensify exploitation. Secondly, the financial markets would want 
to seize the new markets that would be opened up by the privatization of 
public services. And they are, of course, ready to use debt as leverage. 
Therefore, social-democratic reformism has little chance of succeeding. 
Authoritarian management, possibly even the far right, suits the 
bourgeoisie better at the moment. And the only thing that can stop them 
is the balance of power.

Main source: Senate report

Notes
[1]Compare to 123% in the United States and 255% in Japan

[2]Matthieu Aron and Caroline Michel-Aguirre, *Le grand détournement*, 
Allary Editions.

http://oclibertaire.lautre.net/spip.php?article4539
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