Thursday, May 05, 2005

French Supply Siders

Business Week reports on a French request to the EU to allow it to cut its restaurant tax. Link.
European Union nations are to discuss a new proposal to end years of deadlock over a French call for lower sales taxes on restaurant meals, officials said Wednesday.

Tax experts from the 25 EU nations are set next week to discuss the proposal which would allow France to cut taxes on meals from 19.6 percent to 5.5 percent, a long-standing demand by President Jacques Chirac, EU officials said on condition of anonymity. [...]

France, the world's most popular tourist destination, hopes cheaper hotels and restaurants will boost business, creating jobs and helping the sputtering French economy. French chefs have also complained the current system favors fast-food joints which serve takeaway food and pay the lower rate of value added tax, or VAT.

Let me get this straight, The French are arguing that if they cut taxes, they will stimulate business and jobs. Why, that sounds like voodoo economics. Haven't we been told that only idiots like Ronald Reagan believe stuff like that? Surely a sophisticate like Jacques Chirac would read Paul Krugman's column and know that this is nonsense.


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