Enterprising spirit

He has been hailed around the world as the President who will, enfin, rescue the French economy from mounting unemployment and ballooning costs for employers. In many parts of France, however, Emmanuel Macron’s plan to modernise and streamline labour laws have provided the perfect excuse for a good old grève (happily, the timing has the advantage of extending the vacances d’été).

Last night, with mild hyperbole, Le Front Social urged all Lyonnais to join their manifestation against Macron’s plan de destruction sociale massive. Tempting though it was in the 33º heat to join a load of angry French people protesting against, amongst other things, extending potential Sunday opening hours, I managed to resist the urge to install my bales of hay in the public streets.

Back in the UK I tended to read the small print whenever anyone seeking election talked about tax breaks for innovation and enterprise. Don’t get me wrong: I’m all for a bit of get up and go, but frequently such talk is used to bring in concessions for the sort of “entrepreneurs” who have already attracted billions to them rather than for your average painter-decorator, or indeed freelance journalist, who is struggling to pay their bills each month.

France, however, is a totally different bouillore de poisson. Anyone with half a brain can see that the system here is not set up to favour small-scale endeavours. Charges are so high that employing someone on a permanent contract here costs the employer double what they pay their employee in salary. If you happen to be rolling in it, like l’Etat, or BNP Paribas, tant pis, but if you are a small business, you have to think hard before taking anyone on. No surprise then that young people are struggling to get even a CDD (short-term contract), let alone a CDI (permanent contract).

From the outside, this all seems insane. I think it’s insane, and my family benefits enormously from it, Eadred being one of those lucky people whose CDI entitles him to over 40 days off each year, not to mention help with his transport costs, childcare vouchers and chèques de vacances which we can spend on, well, vacances: all at his employer’s expense.

Recently, however, I have had more personal reasons for wanting a President who is prepared to tackle the system. Some of the work I do here is freelance and, to work freelance, I had to set up my own company (cue labyrinthine paperwork). Once it had been established, I had to start to pay my cotisations. Everyone with a job in France pays these prélèvements sociaux, the major part of which go towards healthcare costs. And so I jolly well should too, I said to myself, when the issue first reared its head.

The trouble is that, whereas if you are employed by someone else, you pay 20% of your income in such charges, if you are self-employed, the percentage that you pay is much higher. This is presumably because you do not have, behind you, an employer who is quietly matching what they pay you in charges paid to the State. It’s quite difficult to work out how much I have to pay out for the privilege of employing myself because – évidemment – the money goes to no fewer than four separate entities, all of which have different payment terms. On the basis of our last tax return, however, I worked out that last year I paid out about 40% of what I earnt in charges. Double what I pay when I am employed by someone else.

Oh! Did I forget to mention that this 40% levy was before income tax? Although everyone pays their social charges, only 46% of French workers pay income tax. Unfortunately, because tax is paid per family rather than per individual, and because Eadred has his aforementioned cushy CDI, this includes us. As well it should, I thought…

Except that, gulp, all this makes the fiscal régime rather punitive as far as my freelance endeavours are concerned. I earn about 750€ this way each month, for about five full day’s work. That’s 18.75€ gross per hour. Deduct the 40% that goes out to the RSI, Urssaf, Cipav, and in Taxe foncière des entreprises (ground rent on the space in which you work), and I am already down to 450€, or 11.25€ per hour (before tax). Deduct the further 30% that we will pay in income tax at the end of the year, and I am down to 315€. Do the maths and I am paid 7.88€ per hour net. Less than half of the amount I started out with.

So yes, although I am very keen to pay my dues, I am all for the abolition of the RSI; the streamlining of the agencies to whom entrepreneurs pay their charges; and the proportionality of charges on the self-employed. And no, thank you very much, I do not wish to manifeste against any Président of any stripe who is willing to try to sort this mess out…