The outbreak of the Covid-19 coronavirus and its heavy human, economic and social toll have awakened economists, whose the most mediatized think that more taxes will make up for the state’s shortcomings.

Although the pandemic is by definition of sanitary origin, and its contagiousness and dangerousness therefore fall within the scientific domain and not at all within the economic domain, a growing part of public opinion considers that raising taxes will solve everything.

The problem is particularly acute in Europe and even more so in France, the most heavily taxed country in the world. An American citizen since 2012, economist Esther Duflo believes that France must re-establish the “wealth tax (ISF)” which does not exist in the United States.

Considering it “reasonable” even though the latter taxes each year the wealth that has already been taxed before, Esther Duflo does not specify that France was exporting 12,000 millionaires in 2016 mostly to the benefit of the United States which was importing 10,000 millionaires.

If many Europeans are calling for more taxes, they specify however that this should apply to everyone but themselves. Thus, the definition of “the rich” varies according to individual interests, completely invalidating the so-called popular consensus for an increase in taxation.

Also, multiplying socialist proposals allows elected politicians to avoid tackling the real cause of state debt and inefficiency, namely their management of public finances.

For example, France has the highest tax rate in the world and suffers from a serious public deficit. Yet its management of the covid-19 epidemic is less effective than that of Germany, where taxation is lower, the state budget is in surplus and unemployment is twice lower.

The multiplication of taxes, in the absence of sound and reasonable management by the State, is not an effective solution and the situation in a country like France brings irrefutable evidence. Besides, this contradicts the very idea of economic recovery.

Priority should therefore be given to economic and financial education, the promotion of entrepreneurial culture and the facilitation of investment in order to create the conditions for sustainable prosperity that is more appreciative of merit and therefore fairer.

Contents published on do not constitute investment advice.


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