Taxing superprofits could yield much more than expected by the government, even if the measure is limited to the energy sector, economists from the Institute for Public Policy (IPP) estimated on Thursday.
After rejecting a tax on this sector, which has benefited enormously from soaring energy prices, the French government ended up going along with the European Commission’s proposal to tax the profits of companies made for reasons they do not are not responsible, namely the soaring prices of oil, gas or electricity, explained Arthur Guillouzouic, researcher at the IPP during a presentation at the Paris School of Economics.
With three colleagues, he estimates that the potential return from the government amendment is very much higher than the 200 million euros calculated by the government on the basis of the anticipated profits for the year 2022.
Between 6 and 7 billion euros
The amendment to the draft budget for 2023, entitled temporary solidarity contribution, and taxing 33%, instead of 25%, on profits exceeding by more than 25% the average for the reference period 2018-2021, could yield between 6 and 7 billion euros, according to economists.
The tax proposed by Nupes, which is not limited to the energy sector but would concern all large companies with a turnover of more than 750 million euros and whose profits are more than 25% higher than the average of those achieved between 2017 and 2019, could bring in between 18.8 billion and 44.4 billion euros.
Another study by the IPP and the Center for Economic Research and its Applications (Cepremap) comes to the conclusion that the tariff shield on energy prices has enabled a gain of 1.7 points of growth in France this year.
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The scenario that parliament has adopted is the one that seems to be the best compromise in the sense that it preserves growth, almost manages to contain inflation and does not energize the price-wage loop, explained Franois Langot, economist at Cepremap.
His study comes out against the indexation of wages to inflation, because its negative effect on employment would outweigh the positive effect on the real hourly wage.
The Chairman of the Finance Commission of the National Assembly Eric Coquerel (LFI), who attended the presentation, the tariff shield is better than nothing but we cannot be satisfied with this system which has not prevented the fall in the purchasing power. He asks for prices to be blocked when they soar.
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