FRANCE: The Yellow Jackets Are a Hornet’s Nest
Guest post by Nadia E. Nedzel
French citizens are, in general, willing to pay a lot in taxes.
Far more than most Americans.
An individual who earned below €9,964 in 2018 will pay no impôt sur revenue, but anyone who earned more than that will, with the majority of taxpayers paying 30%.
Additionally, there are a number of other stringent taxes that must be paid such as social security contributions, taxes on goods and services (VAT at 20%), capital gains, habitation taxes, taxes on TVs, wealth taxes, etc., and many of these taxes burden everyone.
All told, the personal income tax rate amounts to well over 45% of the total of French income, one of the highest in Europe.
The French are generally willing to put up with such high taxes as long as they believe they are getting good social services such as universal healthcare, free university, 16 weeks’ paid congé maternité for new mothers, social security pensions, a 35-hour work week, and retirement as early as 62 (if you have worked for 42 years, mandatory retirement for most at 67).
On the other hand, however, employers are hesitant to hire new employees because of the potential for severance pay (up to 2 years) if they fire that employee (there is no at-will employment in France).
This rigidity has seen the French economy grow at paltry rates.
As the owner of a small business explained it, this means she will not hire anyone who is not either a family member or an independent contractor.
The 35-hour workweek of course does not apply to those who are self-employed: small business owners work far more hours.
The low mandatory retirement age is supposed to help youth, who are chronically unemployed at rates in the high double-digits.
France’s GDP growth rate in the third quarter of 2018 was a pathetic 0.3%.
When Macron reduced the 75% tax on millionaires (which had caused many millionaires to leave the country), and then (in an effort to discourage the use of fossil fuels) decided to impose a sur-tax on diesel fuel that would raise its price to equal that of gasoline, the proverbial excrement hit the fan.
After years of encouraging drivers to switch to the more environmentally-friendly and efficient diesel fuel, many felt betrayed and insulted by the proposed tax.
To add insult to injury, someone in Macron’s administration purportedly responded that if people did not like the tax, they could simply take the bus instead.
This was not well received by those in rural areas, smaller towns and cities who are more dependent on cars, unlike well-heeled Parisians who pride themselves on not needing a car.
Imagine telling a plumber that he can simply take a bus or train to the job?
Or tell a farmer the same thing with regard to getting his grapes to the local wine press?
A spontaneous revolt, fueled by social media, arose among the tax-paying middle class who donned the yellow vests everyone is required (by law) to carry in their cars.
Unusual among strikes in France, the unions are not involved and the protests have now gone on for 8 successive weeks – primarily on weekends, because that is when the protestors are not working.
On some Saturdays, major intersections are completely blocked by protesters and there are slow-downs on all the autoroutes.
The author drove to and from Lyon from Nice every week during November, and learned to expect a slow-down and free-toll around Avignon on every northbound trip on the A-8.
The protests outside of Paris are generally peaceful, with many drivers giving the protesters a thumbs-up or displaying their yellow vests on their dashboards.
Many of those outside of Paris deplore the violence of the Paris protests — which now purportedly are carried out by extremist urban guerrillas (both right and left) — but nevertheless remain very angry.
President Macron is perceived as a global elitist who simply does not understand workers’ needs. He is despised with his popularity sinking to 21 %.
Ordinary hard-working middle-class acquaintances gave the author an earful.
One couple told me, “We got rid of a king, we can get rid of a president the same way,” implying that Macron might meet Madame La Guillotine.
A cab driver, learning that we were American, asked if we liked our new president.
When I responded in the affirmative, he asked why.
When I responded that Trump says what he thinks and does what he says, his reaction was: “WE NEED TRUMP!” – and he was not the only Frenchman who told me the same thing.
The masses are more than upset in Europe!
The yellow vests are also hornet nests.