FISCAL POLICIES

FISCAL RESPONSE TO THE CRISIS

Public finances were debilitated, the government took fiscal policies based on the increase in the net tax while maintaining net spending equal, so they could reduce budgets deficit.

By the end of 2014, two-thirds of the measures implemented in France were made to enhance revenue and one-third to decrease spending. 

France chose to increase VAT rates, social insurance contributions, rise in  income tax  aimed at the highest income individuals, rates, rose of the marginal tax rate from 40% to 45%, new tax on incomes above €150,000, growth of firms tax base with a tax credit based on expenses.

Governments collect revenues mainly for two purposes: to finance the goods and services they deliver to citizens and businesses and to fulfil their redistributive role. This indicator is measured in terms of thousand USD per capita and as a percentage of GDP. All OECD countries compile their data according to the 2008 System of National Accounts (SNA 2008), except Chile, Japan and Turkey (SNA 1993).

Figure 1General Government revenue( total % of GDP)

Tax revenue is defined as the revenues collected from taxes on income and profits, social security contributions, taxes levied on goods and services, payroll taxes, taxes on the ownership and transfer of property, and other taxes. Is measured in million USD and percentage of GDP.