My guest today is a G’Day World listener from Paris, Bernard Malige. Bernard, who works as an engineer with Renault, helped me better understand the French system of taxation and social services. If you’ve seen Michael Moore’s latest film SICKO, you already know that in France, pretty much all health care (except high end elective procedures) is paid for by the Government out of your taxes. When I saw the film, I wasn’t sure how high the taxes were in France and Bernard offered to help out. Turns out, they are quite low. If you’re an American, you probably don’t want to listen to this show. It’ll just depress you. We also talk a little bit about the French public’s view on Iraq, the USA, Libya and Napoleon.
Bernard is now our official “European Correspondent”.
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Still, we have no answers to the following:
if you’ve got 2 kids and a wife and you both earn 100000 euro how much is accually left in your account after taxation. Should every peron be married to pay normal taxes? If you devote your time solely to work and to building up the economy you are punished for not having a family?
The second topic is: how the UK is perceived in France. France has one of the highest young people unemployment rates in Europe. Something like 25% of people around the age of 20 are unemployed and they come to the UK to work at Saintsbury’s. To get a job in France you have to do an apprenticeship for about 2 years, you get paid next to nothing and when it ends someone else is employed in your place because the burden of employing a full-time employee is that high. Every person wants a state job for life so they don’t get fired whatever the quality of their work is.
I’ve never worked in France myself and my points are based on what I have heard from varuous sources but cosidering the rule book of employment in France is 1800 pages and growing I think France needs a series of reforms not more security. Every possible law to secure the employee leads to unemployment and scares the potential employers away.
Their GDP growth is hardly 2% and they have got a buget deficit for like 20 years.
The topic is very interesting. If you could devote more time to the French, that would be a nice follow-up to the Napoleon show. How much of the rewolution and power to the people is still there after the Napoleonic era?
Don’t get me wrong, I like France. It’s a really beautiful coutry, but if I can choose I would choose the UK or Australia over it.
Cheers, mate!
Hi Raf,
Regarding the taxes, I think you miss the point. Indeed, when I prepared the show, I see that I was paying the same amount of taxes in the UK and in France! In the UK I was paying 20% of my income on income taxes, and around 7% for social security. In France, I am paying now 10% of my income on the income tax and 18.6% on social security. So the total rate of taxes is the nearly the same. The point if that in France, should I be married with kids, I would probably pay less taxes. and that is a deliberate incentive policy to made people having children.
To answer your question, If I am single and my total income is 100 000 Euro, I will pay 16652 Euro of income taxes, so 16% of my income.
Being married with two kids, and both earning 100 000 Euro (200 000 Euro in total), we would pay in total 27120 Euro, so 13% of the total income.
But being married with two kids and a total income of 100 000 Euro, my income tax would drop to 6216 Euro!, so 6% of the total income.
The point I was trying to make is that the tax rate we have to pay doesn’t correspond to what we are actually paying. My tax rate currently is 30%, and my income tax represent 10% of my total income. So when people are talking about France, saying that the RATE is higher, they may be right, but that doesn’t mean that we are actually paying that much.
Regarding the unemployment rate in UK and France, I have a friend who attended a MBA at the university of Birmingham. One of his teacher was talking about the unemployment rate in the UK, and did some comparison with France. According to him, the real unemployment rate in the UK is far higher than the official one, and basically, it was comparable to the one we have in France. My feeling, trying to have info on this subject, is that whatever the system, the unemployment rate is nearly equivalent, but every country doesn’t count the same categories of people as being unemployed.
But you are definitely right regarding the youth unemployment rate, and to be fair, it also true for the unemployment rate of the elderly (55 years old and more).
The story regarding the apprenticeship is partially true. Even if this kind of thing happen, it is a minority and anyway, the apprenticeship is not the “standard” way in France to learn a job. We have different school and university, and that is the standard route. Apprenticeship is more like the last chance to get a qualification and a proper job.
As for the young French crossing the channel and going to the UK to work at Sainsburry, is it really because they can’t find a job in France, or is it that they want to improve their English during a summer job? The one that are going to the UK are more the one who are single (no benefit from having a family) and very high income, because in that case, they will pay less taxes (in reality far less social security) that they would in France. It is also a minority, but a wealthy one.
Regarding your rant on the reform, I’ve said during the show that we need some reform because the social security runs a deficit. But I think we don’t need to go as far as destroying our system to do so. The US are also running a huge federal deficit, and that is not du to their health care system!
Regarding the complexity of our rules, you have definitively a point there. We should simplify our rule book of employment (and many other things as well), but that is a separate topic and can be made without threatening the social security system.
And even if the complexity of our system may deter some people to invest and hire in France, we have other advantages, and the results is that France is still one of the main destination for foreign investment. This is du for instance to the quality of our -state run- school and university system and our -state subsidised- public transport system, among other things.
Overall, you may choose to stay in the UK or go to Australia, but the fact is that a lot of British people are crossing the channel to come and leave in France, so life can’t be that bad over here. But don’t take offence of that, I also enjoyed my life in the UK!
I suppose that could be the topic for another show!
I hope I answer your questions.
CU
Bernard.