The case is known: turning his back on his promises Bourget, Francois Hollande has worked during his mandate to defend the interests of major French banks and the financial market of Paris. In a period that is favorable to financial regulation, it has defused any attempt at ambitious banking reform, both at the French and European level. He also curbed the four-pronged draft European tax on financial transactions.
It is difficult to estimate the role played by Emmanuel Macron, advisor to François Hollande, deputy secretary general at the Elysée, then Minister of Finance, in the flip-flop of the one who called himself “the opponent of finance”. But it is enough to consider the positions of the now favorite in the presidential election to see his good disposition towards the markets.
In an interview published in Libération on March 24 , Emmanuel Macron announces the color: for him, the European tax on financial transactions (FTT) ” is not the priority “. The candidate considers that the Brexit negotiations could spell the end of the FTT. While the negotiations of this tax abhorred by French banks and markets get bogged down, this statement sounds like a bad omen.
Especially since Emmanuel Macron had already taken definite positions on the issues of financial regulation. In a debate organized by the Confederation of SMEs on March 6, he announced he wants to relax the rules that were imposed on banks and insurers after the financial crisis. These would have “only a risk reduction objective” and would have “disincentives to finance the economy”. But it is precisely the speech of financial lobbies, who denounce financial regulation to better ignore the harmful role of speculation or fiscal discipline on the economy.
Another aspect and not least: the reform of the solidarity tax on wealth (ISF). For Emmanuel Macron, it is necessary to ” reform in depth ” by removing ” the part that finances the real economy ,” and in particular the holding of shares, to make a ” tax on real estate rent“. The property tax represents the most “unfair” part of the ISF. Sometimes, as a result of an inheritance and the rise in property prices, modest households are subject to the ISF. Holding an important heritage in the form of an action is synonymous with “true” wealth. But not necessarily financing the economy! Since the 2000s, the contribution of equity markets to the financing of the economy is almost zero in France. It is therefore neither more nor less to amputate the ISF on its most significant part, for misleading reasons! And for the benefit of the shareholders.
A policy of painful rigor
These same shareholders had to welcome the proposal of Emmanuel Macron to remove the progressivity of the tax on capital income – that is to say on interest, dividends … The candidate also proposes to lower the corporate tax rate of 33.3% to 25%, indistinctly the size of the company. However, the weight of corporate tax in France is one of the weakest among advanced countries, because of the “optimization” of large companies that take advantage of a base mitigated by many tax loopholes.
In short, Emmanuel Macron wants to multiply tax expenditures for the benefit of shareholders and the richest, while imposing a painful discipline policy for the rest of society; Conversely, a report published this week shows that it would be possible to recover nearly 200 billion euros to finance public services and ecological and social emergencies, including through a real FTT and the fight against tax evasion.
Another effort, Mr. Macron, not to appear as the candidate of finance!