A balancing act. How to arbitrate between public spending cuts and tax increases to reduce deficits? As the text of the 2025 Budget arrives at the National Assembly this Monday, the Budget Minister defended the government’s dose on BFMTV. “It is a balanced text to reduce public spending,” considers Laurent Saint-Martin.
While some deputies of the Finance Commission modified the Government’s initial text by increasing taxes, the minister was satisfied this Monday that his proposals had not yet been accepted.
“People will leave”
Without explicitly citing it, the minister thus refers to the Laffer effect from which the famous maxim “too many taxes kill taxes” is derived. Because if the Government’s objective is to reduce the public deficit in 2025, activating the revenue lever alone could be counterproductive.
The tax increases planned by the Government in the initial text are aimed at high incomes and large companies.
Source: BFM TV
