BF2S Forums Sarkozy - Overtime pay is not taxed

Harmor wrote:

What a great idea.

Harmor wrote:

"Paris, May 07: France`s President-elect Nicolas Sarkozy says he wants to put France back to work, using the five-year mandate he secured today to spur economic growth through tax cuts and market-based reforms.

The right-wing former Interior Minister, who defeated socialist rival Segolene Royal, has vowed to confront head-on France`s dubious distinction of being "the European country that works the least".

In the face of existing legislation restricting the working week to 35 hours, Sarkozy wants to give workers a chance "to work more to earn more."

Without scrapping the 35-hour week, he would allow employers to boost overtime pay by 25 percent, with the extra hours exempt from taxes and social charges.

The goal would be to strengthen consumer purchasing power, galvanize economic momentum and thereby slash France`s 8.3 percent jobless rate, among the highest in the Eurozone."

Source: http://www.spcm.org/Journal/spip.php?article10549

What a great idea.

Last edited by Turquoise (2007-05-12 07:20:11)

Turquoise wrote:

usmarine2005 wrote:

35 Hours?  WTF?  Jesus Christ.

If I'm not mistaken, Germany considers 32 hours as full time.

RicardoBlanco wrote:

What's wrong with a 35 hour week? Ever heard of quality over quantity?

jonsimon wrote:

Turquoise wrote:

Harmor wrote:

"Paris, May 07: France`s President-elect Nicolas Sarkozy says he wants to put France back to work, using the five-year mandate he secured today to spur economic growth through tax cuts and market-based reforms.

The right-wing former Interior Minister, who defeated socialist rival Segolene Royal, has vowed to confront head-on France`s dubious distinction of being "the European country that works the least".

In the face of existing legislation restricting the working week to 35 hours, Sarkozy wants to give workers a chance "to work more to earn more."

Without scrapping the 35-hour week, he would allow employers to boost overtime pay by 25 percent, with the extra hours exempt from taxes and social charges.

The goal would be to strengthen consumer purchasing power, galvanize economic momentum and thereby slash France`s 8.3 percent jobless rate, among the highest in the Eurozone."

Source: http://www.spcm.org/Journal/spip.php?article10549

What a great idea.

Awesome.  Sarkozy rocks... 

Turqoise... He is promoting unemployment, a problem France currently has that he pleged to remedy. And according to the BBC, he is planning to pay for his policies by cutting civic services, in other words, he will be firing people to create jobs. France is screwed.

Last edited by Turquoise (2007-05-12 07:34:45)

jonsimon wrote:

Turquoise wrote:

Well, here's the thing...  Isn't it true that, by decreasing taxation on overtime, he'll be allowing more people to keep more of their pay, and that, collectively, this could allow more people to consume more.  If consumption goes up, then there might be an increase in jobs.

I guess I figure that increasing disposable income on a collective level should allow more people to invest or spend their money in the economy, and in general, this should increase overall production (and jobs).

Does increased investment not usually equal more jobs?...

Does it matter? By increasing incentives for workers to take overtime hours and for employers to allow them he increases the productivity of each employee. By doing so he reduces the incentives of the employer to hire another worker. Direct relationships are more important than loose indirect ones. This policy change is a direct disincentive for employers to purchase more labor, while hopes that increasing consumption will, through market forces, create a need for more jobs is not only an indirect approach, but much less reliable. Honestly, these politicians keep arguing that they can control the market through indirect means, but the honest truth is no one is well enough informed to control something with this level of complexity. Any gains in employment through this policy will have to contend with the immediate decrease in incentives for employers to purchase labor.

Turquoise wrote:

jonsimon wrote:

Turquoise wrote:

Well, here's the thing...  Isn't it true that, by decreasing taxation on overtime, he'll be allowing more people to keep more of their pay, and that, collectively, this could allow more people to consume more.  If consumption goes up, then there might be an increase in jobs.

I guess I figure that increasing disposable income on a collective level should allow more people to invest or spend their money in the economy, and in general, this should increase overall production (and jobs).

Does increased investment not usually equal more jobs?...

Does it matter? By increasing incentives for workers to take overtime hours and for employers to allow them he increases the productivity of each employee. By doing so he reduces the incentives of the employer to hire another worker. Direct relationships are more important than loose indirect ones. This policy change is a direct disincentive for employers to purchase more labor, while hopes that increasing consumption will, through market forces, create a need for more jobs is not only an indirect approach, but much less reliable. Honestly, these politicians keep arguing that they can control the market through indirect means, but the honest truth is no one is well enough informed to control something with this level of complexity. Any gains in employment through this policy will have to contend with the immediate decrease in incentives for employers to purchase labor.

Good points, but I sincerely believe that Sarkozy and others like him are needed for Europe to move forward economically.  France is too socialized.