Despite a relative control over expenditure in 2013, the persistence of a very high public deficit (4.3%) was mainly due to an unprecedented and unexpected drop in tax revenue which confirms the existence of a tax tolerance threshold, specific to each country, and which may have been reached in France. Above this threshold, any tax increase has a counterproductive effect as compulsory taxes stifle activity by further weakening the economy's growth potential. (Éric Pichet)

Despite a relative control over expenditure in 2013, the persistence of a very high public deficit (4.3%) was mainly due to an unprecedented and unexpected drop in tax revenue which confirms the existence of a tax tolerance threshold, specific to each country, and which may have been reached in France. Above this threshold, any tax increase has a counterproductive effect as compulsory taxes stifle activity by further weakening the economy's growth potential.

Éric Pichet

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above control country deficit drop due high increase public specific tax weakening

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