The debate had exploded with the crisis of “yellow vests”, it resurfaced in favor of the campaign for the presidential election. How can a tax encourage ecological transition, while remaining acceptable to the majority of French people? And how can we avoid it weighing first on the most modest?
In the fall of 2018, soaring prices at the pump, coupled with the increase in environmental taxes, triggered the first major crisis in Emmanuel Macron’s mandate. Three years and a pandemic later, the subject has been prudently put away, and it is the European Commission which takes on the delicate role of putting it back on the table through an ambitious “climate” plan.
“The problem with the carbon tax is that as a percentage of income it hits the poorest hardest”, underlines Philippe Martin, the boss of the Economic Analysis Center, a think tank attached to Matignon. “A carbon tax cannot be seen as a recipe for the State. If it is to apply to transport or agriculture, this will affect consumer prices. It will be necessary to redistribute the product to absorb its social impact ”, estimates economist Jean Pisani-Ferry.
This was not always the case. At the start of the mandate, and before everything was shattered by the anger aroused on the roundabouts, this tax system was first supposed to bring money to the State. “According to the 2019 draft budget, the redistribution rate linked to the increase in the carbon tax was only 25%”, recalls Mr. Pisani-Ferry. This quarter of the carbon tax hike was supposed to go into conversion bonuses and other energy vouchers, with the remainder of the some 2.8 billion euros in additional revenue going into the state’s pocket.
Within the executive, some today accuse the then Prime Minister, Edouard Philippe, of having had a solely accounting approach to the carbon tax and of having had the ambition to use it to reduce the public deficit. Ultimately, this episode will cost the state money, which is obliged to calm anger with social and fiscal measures after the great national debate (tax exemption for overtime, lower income tax, etc.).
Today, the cause seems to have been heard: supporting the most vulnerable in changing consumption patterns is a necessity. But the modalities remain to be defined. Indeed, economists point out, ecological taxation theoretically aims to change behavior. So to disappear, in the long term, at the same time as these. “This is an essential point which is not always well understood by politicians, points out Mr. Martin. Green taxes must have an environmental purpose, not a budgetary one! “
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