Don't the Nordic countries have a lot of taxes? They seem to do ok in the startup scene. My wild guess - I don't know how things are 'on the ground' in either France or the Nordic countries - is that France tends to have more bureaucracy like here in Italy. So that it's not just a matter of "make some money, pay X in taxes" which is pretty easy to reason about, and somewhat "fair" (even if we all have different opinions) if you're paying taxes on profits, but rather feeling like the system is full of obstacles and people who are either indifferent or actively hostile towards the idea of someone opening a business.
For corporate taxes, effective tax rate is the relevant number. I could not find recent figures, but most rich countries had an effective tax rate in the 10-20 % rate, with Germany and Australia as outliers (below and above) in 2005. The US (well, states) are known to have a high official corporate tax rate, but the effective tax rate is much lower. In general, corporate taxes have significantly decreased on various measures (http://marginalrevolution.com/marginalrevolution/2011/11/cor...).
This is actually the main issue of this new law in France: distortions and waste around tax avoidance much more than the actual tax rates, which are mostly for political show (the tax will not raise that much money, even though France has the highest number of people > 1 million euros in assets/etc... within Europe).
Ah, I live in one of these countries with low corporate income tax (it's 19% here), and yet right wing here wants to make it even lower to increase entrepreneurship, and everybody complains how hard it is to do business here, because taxes and insurance contribute additional ~13-15% cost to base salary, so that they have to use law loopholes to escape that (which is very widespread, and recent attempts by government to fixed it resulted in an public outcry).
Hearing all that, one could imagine that in countries like France, with >30% corporate tax and high employment cost, no business can take place at all, and it must have fallen in a deep economic depression a long time ago.
Hearing all that, one could imagine that in countries like France, with >30% corporate tax and high employment cost, no business can take place at all, and it must have fallen in a deep economic depression a long time ago.
That is generally the case. Unemployment rates in the 8-12 neighborhood are considered a disaster in the US. In France they are normal.
France is as poor as Arkansas and Idaho, two of the poorest US states. If the US in general fell to this level, we'd definitely be calling it a deep depression.
France is not (much) different from other comparable countries in Europe on the quoted measure (i.e. Germany, UK and Italy are equally "as poor" as Arkansas and Idaho, using GDP-PPP/inhabitant). So it most likely doesn't have much to do with the original statement, given that Germany has e.g. a much lower unemployment. I am not sure per-state comparison of GDP-PPP per capita are really that meaningful: you would most likely need to adjust parity within the US. This is a weak argument, but I can't really see how France would be significantly poorer than Louisiana.
Describing France as perpetually in recession is rather nonsensical: I can't see any measure by which it would not be true for nearly every country if true for France.
Start with a very rich country - a former superpower that fought with its rival for world domination. I'm not talking about USA and USSR but France and England.
The #1 spots comes with lot of advantages like accumulated wealth, educated workforce, etc.
Now start to introduce socialist reforms - little by little, and watch the country bleed itself out while its voters supports this self destructive streak being proud of the equality they are achieving.
This "equality" makes me think of thermodynamics. Yes they are increasing entropy, destroying the country.
It can be achieved in a small amount of time (Zimbabwe managed to turn itself from very rich to very poor in a record amount of time!) or a long time - as France is showing.
At the moment, France can only take advantage of the size of its economy as a refuge in the eurozone for those who don't want to put all their eggs in Germany
If France keep destroying its economy that way (or if say the UK gets in the eurozone) the end of the ride is near.
[I wonder if it will need food help to fight famine, like Zimbabwe, after after being a net food exporter]
What makes you think France is destroying its economy ? And what makes you think UK or Germany is that much better ? When you scratch behind the superficial discourses around european economy, some underlying issues are systemic and shared across all big European economies. One of them is the very weak capitalization of banks, and high asset/gdp of the private banking system [1]. This by itself explains a large part of the current European policies (for example, those countries don't/can't recognize that they will need to re-capitalize their banks at taxpayer-expense).
This is much, much more critical than changes in taxes which effects are at best very disputed, and mostly explained by political biases of each side.
"That is generally the case. Unemployment rates in the 8-12 neighborhood are considered a disaster in the US. In France they are normal."
Except that the way the unemployment rate is calculated is different in both countries, economists say that you should add 3 or 4% to the American unemployment rate to have comparable numbers.
According to a quick look at Wikipedia, the only apparent difference is that Eurostat requires an unemployed person to be able to start work in the next two weeks, while the US BLS requires an unemployed person to have been able to start work last week.
Is it your belief that the difference between "are you able to start work in the next two weeks" and "if a job were offered, could you have started work last week" is 3-4%?
That is incorrect. All of Europe defines unemployment in accordance with the ILO, and the ILO counts a person who has performed any work as "employed".
France, like Arkansas and Idaho, has a high percentage of the country engaged in agriculture. A sensible comparison would be PPP GDP per capita growth rate.
And in return provide extensive middle class services.
Nobody who wants to get elected in the U.S. can say this, but the middle class here increasingly sees more benefits from government while paying less and less for them. The poor are screwed by regressive sales and payroll taxes, while the upper classes face much higher average rates due to income cutoffs on a variety of tax credits and deductions.
You can argue about payroll vs. state vs. income taxes, but it's indisputable that the income tax which funds government programs has become dramatically more progressive in real terms over the last few decades.
Will ACA help the upper class? Not really: they had a low uninsured rate to begin with. Will it help the poor? Not really: They already had Medicaid/CHIP. It's effectively a middle class benefit, and it's paid for largely by increased taxes on the rich.
There's nothing intrinsically wrong with taxing the upper class to help the middle class. Maybe it will solve the "problem" of inequality, but I'm not so sure. I think I'd prefer a system where a more generous government requires a more generous citizenry.
Ha! On the ground in France, it's not really hostility, it's more indifference and rigidity. Some are hostile indeed, but some are helpful as well so it balances out. It's still a general pain in the backside though, and boy do they know about not communicating between services, losing papers you sent, and asking you 5 times for the same stuff... But to our problem it is the actual tax rate increase. From 30 to 60% overnight on investors' exits. Not neutral for business.
The Nordic countries do have a lot of taxes, and Norway most of all. And that means Norway is not the easiest country to do business in, unless you're into oil, gas or fish. The one big killer in Norway, is taxation of working capital. Which is why a Norwegian Facebook or Twitter would be impossible at this moment. If you have a company valued at say $100 million, but you're losing money at a rate of $200k per year, you'd think you just need to raise those $200k somehow, which shouldn't be too hard. But guess what, since you're valued at $100 million, you'd have to somehow raise another $2 million each and every year, just to pay your taxes.
I might have been a bit unclear, but the tax I mentioned applies to the owners of the company, not the company itself. Which means that it's very hard for entrepreneurs to maintain control of their company, since they have to sell stock just to pay the taxes on their stock.
A report from The Confederation of Norwegian Enterprise (NHO) published this spring, showed that over 20.000 Norwegian business owners paid more in taxes, based on the company's valuation, than the entire revenue of said company.
