Progressive Taxation and Economic Growth. Case Study in France

“Liberté, égalité, fiscalité” was and is still considered a motto of the conception of the economic and fiscal environment in France. This was also the subtitle of Michael Kwass’s book “Privilege and the politics of taxation in eighteenth-century France”, which offers a lucid interpretation of the most ambitious plan of the 18th century French monarchy, namely the attempt to impose direct taxes to the privileged elites which were formerly exempt. It is well known that France has a rich history that extends to the level of taxation. Being a country with a rather tumultuous fiscal stance throughout its history, France offers a wide range of study themes in this field. This paper aims to analyse the fiscal framework in France and to identify the links between certain fiscal variables and the economic growth of the country. Thus, the impact of certain fiscal components on the economic growth of France (highlighted by the GDP growth rate) is analysed by elaborating descriptive graphical analyses, as well as by elaborating an econometric model (using the multiple regression analysis). The analyses will show the importance and the significant influence of the fiscal variables included on the French economy and the results of the econometric model will highlight the negative relations between GDP growth rate and taxes on wages and VAT, respectively the positive relationship between GDP growth rate and taxes on corporates. In this sense, the analyses performed provide an overview of the relationships between the mentioned fiscal variables in case of France and may also constitute points of interest in the event of expanding and elaborating a more advanced statistical/econometric model.