President Donald J. Trump and President Emmanuel Macron at the arrival ceremony at Les Invalides in Paris, July 13, 2017. (Official White House Photo by Shealah Craighead)
As Washington grapples with loopholes and tax credits, do politicians really want to explain to American voters why they let the U.S. trail even France? Let’s hope our lawmakers noticed that President Emmanuel Macron is overhauling France’s taxes as a way to stimulate investment and create jobs.
Mr. Macron pushed through the National Assembly a budget that features substantial tax relief. By 2020, the top rate on corporate profits will fall to 28% from 33.33% today, reports the WSJ, and will include a flat 30% on capital income as well as an end to the wealth tax on all assets, ex real estate.
The tax cuts are also a bid to woo businesses thinking of leaving Britain after Brexit. Even dirigiste Paris has figured out that tax codes can’t be confiscatory in a world of globally mobile capital and labor.
Perhaps more important is Macron’s focus on simplicity and lower rates.
While the elimination of some credits and exemptions might lead to higher payments for some companies or individuals, both governments aim for tax systems that are easier to understand and administer, more efficient, and that distort their economies less.
Washington is often tempted to think none of this matters because companies inevitably will be drawn to world’s largest economy. For some that’s true. But a growing European economy under reformers such as Mr. Macron increasingly offers its own enticing opportunities for investors.
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