3 ms·

The projected annual pension defecit was 30 billion in 15 years, then gradual reduction (as people die). This was the most optimistic scenario, based on x% grow

by ArnoVW 3y ago

The projected annual pension defecit was 30 billion in 15 years, then gradual reduction (as people die). This was the most optimistic scenario, based on x% growth and y% unemployment. Other scenarios were analysed. Btw, these analyses were performed by the Council for the Orientation of the Pensions, a bi-partisan entity. The other options you mention were : * more tax on people (france famously already has the highest in the OECD) * more tax on companies (which will just increase cost of work and thus drive jobs elsewhere) * run a defecit (debt is already scary high, and it means essentially making pay our kids for grandma's old age) What is the other way you had in mind? Note: two years later paying out means two year more paying in. So two years "effectively is 4 years".

riku_iki 3y ago
> * more tax on companies (which will just increase cost of work and thus drive jobs elsewhere) this is false statement. Corp tax usually applied on profit after wages paid, thus doesn't impact cost of work.
- ArnoVW 3y ago
  in the context of pensions, "tax on companies" generally means "increasing the employer part of social charges" (as apposed to the employee part). The French system requires that the various social systems operate as separate funds, at equilibrium, and does not foresee paying shortcomings from general revenues such as VAT or income tax. Hence, increasing the employer part of social charges increases the cost of work. Anyway, the direct tax burden on French companies is already quite high. This means that French companies have difficulties competing with foreign companies. Mutatis mutandis they either raise the price to compensate (and so are more expensive) or keep the same price and lose margin (and have therefore lower capacity to invest). Countries can fix tax levels as they want (it's one of few policy areas where European countries have full autonomy) but they can't use tariffs or import taxes to protect their market. We have all agreed to free trade, and the WTO will punish those who do. So in reality, you can't just tax any way you want, unless you want to destroy part of your local economy.
  - riku_iki 3y ago
    > in the context of pensions, "tax on companies" generally means "increasing the employer part of social charges" I cited specifically recent decrease of french corp income tax above, everything else is your speculations. > lose margin (and have therefore lower capacity to invest). investments are not included into margin, losing margin doesn't have impact on investments unless company become not profitable

by ArnoVW 3y ago

riku_iki 3y ago

> * more tax on companies (which will just increase cost of work and thus drive jobs elsewhere) this is false statement. Corp tax usually applied on profit after wages paid, thus doesn't impact cost of work.

ArnoVW 3y ago
in the context of pensions, "tax on companies" generally means "increasing the employer part of social charges" (as apposed to the employee part). The French system requires that the various social systems operate as separate funds, at equilibrium, and does not foresee paying shortcomings from general revenues such as VAT or income tax. Hence, increasing the employer part of social charges increases the cost of work. Anyway, the direct tax burden on French companies is already quite high. This means that French companies have difficulties competing with foreign companies. Mutatis mutandis they either raise the price to compensate (and so are more expensive) or keep the same price and lose margin (and have therefore lower capacity to invest). Countries can fix tax levels as they want (it's one of few policy areas where European countries have full autonomy) but they can't use tariffs or import taxes to protect their market. We have all agreed to free trade, and the WTO will punish those who do. So in reality, you can't just tax any way you want, unless you want to destroy part of your local economy.
- riku_iki 3y ago
  > in the context of pensions, "tax on companies" generally means "increasing the employer part of social charges" I cited specifically recent decrease of french corp income tax above, everything else is your speculations. > lose margin (and have therefore lower capacity to invest). investments are not included into margin, losing margin doesn't have impact on investments unless company become not profitable