Monday, April 2, 2012

Patrick Chamorel, Senior Resident Scholar at the Stanford Center, Washington DC

Senior Resident Scholar at the Stanford Center in Washington DC, Patrick Chamorel, visited the Legatum Institute to discuss entrepreneurship in France in light of the April 2012 presidential elections. He said that there are two major stumbling blocks for entrepreneurs in France: payroll taxes and the egalitarian culture.

French businesses are burdened with far more social security and payroll contributions than other countries in Europe. According to the World Bank’s Doing Business Report, French companies are taxed 51.7% of total profit for social security contributions and payroll taxes. In Germany, social security, health insurance, unemployment and long-term care insurance costs companies 21.8% of total profits. UK companies fare the best with only 11% labour tax on total profits. According to Chamorel, the French government is aware that this needs to change: “Sarkozy has shifted one tax from payroll tax to VAT to try to help businesses, but it may be too late to have an effect on the election.”

French entrepreneurs also do not enjoy a supportive social culture. Chamorel said: “It is very difficult for the French to believe it is okay to be rich. We are very egalitarian which is bad for entrepreneurs. There is a Robin Hood mentality where successful entrepreneurs will have their money taken away through taxes and suffer the bad reputation of the rich.” President Sarkozy has not hidden the fact that he likes material wealth. “He hoped to change the view of the French on wealth but it hasn’t been successful,” said Chamorel.