Based on the observation that taxation and social security contributions were weighing on industrial competitiveness – thereby contributing to a process of deindustrialisation that was proceeding more rapidly in France than in several other European countries – a number of public policies aimed at reducing the tax burden have been implemented since 2013.
This study focuses on the following recent reforms: the conversion of the business tax into the CVAE; reductions in the CFE, the CVAE and the tax on production premises; and reductions in social security contributions.
Measuring the burden of corporate taxation requires taking into account not only its direct component (the compulsory levies to which firms are subject), but also its indirect component, i.e. the increases in the prices of inputs that these compulsory levies generate upstream in the production process, as well as the compulsory levies that can be passed on downstream along the production chain via higher prices. As the industrial sector is characterised by a complex network of input-output relationships, taking these indirect tax effects into account is particularly important for understanding the burden of compulsory levies. This study therefore also aims to measure the second-round effects that arise from improvements or deteriorations in the profitability of the sectors that supply industrial firms. This involves modelling the extent to which prices are distorted by the French tax system along the value chain.
