ORIGINAL FRENCH ARTICLE: Un pacte de rentabilité pour le CAC 40
by Clotilde Mathieu
Translated Wednesday 26 March 2014, by
Despite the opacity of the employment, competitiveness and research tax credits, l”Humanité has obtained the sums for the 16 multinationals listed on the CAC 40 Paris stock exchange index. In 2013, despite their making 28 billion euros in profits, they obtained a 1.72-billion-euro tax credit. A real waste of public aids.
Twenty billion euros from the one, 5.8 billion from the other. Taken together, the employment, competitiveness and research tax credit (CICE) and the research tax credit (CIR) drain over 25.8 billion euros from the government coffers. This is a nest egg that should grow in the coming weeks, because the bosses are putting on the pressure. They always have to have more. And why not 100 billion euros, as Pierre Gattaz, the president of the French bosses’ association, suggested in January? Competitiveness and jobs are supposedly at stake. The shell game is a bit too obvious. But not for François Hollande, who is enticed by the argument that the “cost” of labor is thought to be too high, and who has not hesitated to also take up the argument that profit margins are at a historically low level, even if it means distributing public monies without attaching the slightest criterion for their distribution, nor for the evaluation of their use.
The follow-up committee will not unveil its first estimate before 2017. In the meantime, the waste is continuing and unemployment is climbing and the budget cuts are getting deeper. In a few weeks, the corporations will be able to stuff themselves with an additional 10 billion euros in tax credits, with the adoption of the responsibility pact. There’s something to delight the companies listed on the CAC 40 Paris stock exchange index, since the jackpot of credits is already practically equal to the 36 billion euros raised by corporation taxes. What with the opacity that reigns over the sum allocated to each mechanism, l’Humanité, with the help of the CGT trade union confederation, has been able to look into only 16 corporations listed on the CAC 40 index.
Corporations on welfare
The result makes you want to throw up. Despite their good balances – 28 billion euros – in a year of economic crisis, the 16 corporations divvied up 1.72 billion euros in CIR and CICE, or, on average, 108 million euros for each corporation. The shareholders are especially the ones who cashed in their chips, with 20 billion euros.
At the head of the list of corporations on welfare: Renault, Sanofi, Safran and Carrefour … and further down on the list, Total, which gets 90 million euros in public aid, including 70 million euros under the CICE program. With 8.6 billion euros in profits, of which 49% – 1.3 billion euros – goes directly into the pockets of shareholder, the corporation has the means to finance its investments. And yet, in August, its president, Christophe de Margerie, announced that “a certain amount of restructuring” would take place in France.
The reports are raining down, denouncing the CIR, the biggest tax loophole ever created in France, because the multiple reforms pushed through under Sarkozy have made France the biggest of tax paradises, with research as a pretext. Companies have been elbowing each other to make use of the mechanism. The number of CIR declarants doubled between 2008 and 2012, whereas the number of employees working in research and development in France shrank by 11% over the same period.
The example of Sanofi says a lot. In 2012, the gigantic pharmaceutical firm swallowed 130 million euros in tax credits. In 2013, it was saturated with 150 million euros. A provocation for the taxpayers, but especially for the workers who are fighting the closure of research centers in France. According to the Cour des comptes (the French equivalent of the British controller and auditor general, or of the U.S. general accounting office), the corporations listed on the CAC 40 stock index have seen their corporate tax fall by 6%. And while 13,164 beneficiaries out of 14,882 were small and medium-sized enterprises, the latter only got 30.9% of the CIR tax credits. “I know that there can always be abuses,” François Hollande acknowledged, without however going back on the commitment he has made to the bosses. The corporations on welfare can sleep tight.