Sixth victory for France, which in 2021 is the European country where the tax burden is the highest. According to the study of the Molinari Economic Institute (IEM), Monday July 19 marks the day of “fiscal freedom” for France.
July 19, “fiscal freedom” day
In its annual study, the Institut économique Molinari (IEM) highlights that for the sixth consecutive year, France is the European country where the tax burden is the highest. This is also explained by its very advanced social protection model. However, for this year 2021, France shares the first place with Austria. France maintains its position despite the policy of reducing compulsory levies hired by the government.
Thus, according to the study, a French employee must theoretically work until July 19 to be able to pay his social contributions, his income tax but also VAT and taxes allowing the financing of public expenditure. July 19 therefore represents in theory the day when the employee is ” tax free “. The European average date for fiscal freedom was set by the IEM for June 12, more than a month before that of the French.
Public debt financing
It therefore takes a little more than six months for the French to pay all the taxes, levies and contributions to which they are subject. In other countries, this release comes earlier, this is the case of Ireland for which the date is fixed in May or of Cyprus and Malta in April. Others like Belgium are less good students, the Belgian kingdom releases its employees for tax on July 16.
With the health crisis and the increase in public spending, it would have been easy to think that the date of fiscal freedom, already set for July 19 in 2019 and 2020, would go back. However, to cope with the crisis, the government has opted for financing by public debt and not by taxes. Public debt, reaching almost 100% of GDP in 2019 before the pandemic, reached a record high of 118%.