Keep Us Strong WikiLeaks logo

Currently released so far... 97115 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ETRD EAGR ETTC EAID ECON EFIN ECIN EINV ELAB EAIR ENRG EPET EWWT ECPS EIND EMIN ELTN EC ETMIN EUC EZ ET ELECTIONS ENVR EU EUN EG EINT ER ECONOMICS ES EMS ENIV EEB EN ECE ECOSOC EK ENVIRONMENT EFIS EI EWT ENGRD ECPSN EXIM EIAD ERIN ECPC EDEV ENGY ECTRD EPA ESTH ECCT EINVECON ENGR ERTD EUR EAP EWWC ELTD EL EXIMOPIC EXTERNAL ETRDEC ESCAP ECO EGAD ELNT ECONOMIC ENV ETRN EIAR EUMEM ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID EREL ECOM ECONETRDEAGRJA ETCC ETRG ECONOMY EMED ETR ENERG EITC EFINOECD EURM EENG ERA EXPORT ENRD ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EGEN EBRD EVIN ETRAD ECOWAS EFTA ECONETRDBESPAR EGOVSY EPIN EID ECONENRG EDRC ESENV ETT EB ENER ELTNSNAR ECHEVARRIA ETRC EPIT EDUC ESA EFI ENRGY ESCI EE EAIDXMXAXBXFFR EETC ECIP EIAID EIVN EBEXP ESTN EING EGOV ETRA EPETEIND ELAN ETRDGK EAIDRW ETRDEINVECINPGOVCS EPEC ENVI ELN EAG EPCS EPRT EPTED ETRB EUM EAIDS EFIC EFINECONEAIDUNGAGM EAIDAR ESF EIDN ELAM EDU EV EAIDAF ECN EDA EXBS EINTECPS ENRGTRGYETRDBEXPBTIOSZ EPREL EAC EINVEFIN ETA EAGER EINDIR ECA ECLAC ELAP EITI EUCOM ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID EARG ELDIN EINVKSCA ENNP EFINECONCS EFINTS ECCP ETC EAIRASECCASCID EINN ETRP EAIDNI EFQ ECOQKPKO EGPHUM EBUD ECONEINVEFINPGOVIZ ENERGY ELB EINDETRD EMI ECONEFIN EIB EURN ETRDEINVTINTCS EIN EFIM ETIO ELAINE EMN EATO EWTR EIPR EINVETC ETTD ETDR EIQ ECONCS EPPD ENRGIZ EISL ESPINOSA ELEC EAIG ESLCO EUREM ENTG ERD EINVECONSENVCSJA EEPET EUNCH ECINECONCS ETRO ETRDECONWTOCS ECUN EFND EPECO EAIRECONRP ERGR ETRDPGOV ECPN ENRGMO EPWR EET EAIS EAGRE EDUARDO EAGRRP EAIDPHUMPRELUG EICN ECONQH EVN EGHG ELBR EINF EAIDHO EENV ETEX ERNG ED
KMDR KPAO KPKO KJUS KCRM KGHG KFRD KWMN KDEM KTFN KHIV KGIC KIDE KSCA KNNP KHUM KIPR KSUM KISL KIRF KCOR KRCM KPAL KWBG KN KS KOMC KSEP KFLU KPWR KTIA KSEO KMPI KHLS KICC KSTH KMCA KVPR KPRM KE KU KZ KFLO KSAF KTIP KTEX KBCT KOCI KOLY KOR KAWC KACT KUNR KTDB KSTC KLIG KSKN KNN KCFE KCIP KGHA KHDP KPOW KUNC KDRL KV KPREL KCRS KPOL KRVC KRIM KGIT KWIR KT KIRC KOMO KRFD KUWAIT KG KFIN KSCI KTFIN KFTN KGOV KPRV KSAC KGIV KCRIM KPIR KSOC KBIO KW KGLB KMWN KPO KFSC KSEAO KSTCPL KSI KPRP KREC KFPC KUNH KCSA KMRS KNDP KR KICCPUR KPPAO KCSY KTBT KCIS KNEP KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNNB KGCC KINR KPOP KMFO KENV KNAR KVIR KDRG KDMR KFCE KNAO KDEN KGCN KICA KIMMITT KMCC KLFU KMSG KSEC KUM KCUL KMNP KSMT KCOM KOMCSG KSPR KPMI KRAD KIND KCRP KAUST KWAWC KTER KCHG KRDP KPAS KITA KTSC KPAOPREL KWGB KIRP KJUST KMIG KLAB KTFR KSEI KSTT KAPO KSTS KLSO KWNN KPOA KHSA KNPP KPAONZ KBTS KWWW KY KJRE KPAOKMDRKE KCRCM KSCS KWMNCI KESO KWUN KPLS KIIP KEDEM KPAOY KRIF KGICKS KREF KTRD KFRDSOCIRO KTAO KJU KWMNPHUMPRELKPAOZW KEN KO KNEI KEMR KKIV KEAI KWAC KRCIM KWCI KFIU KWIC KCORR KOMS KNNO KPAI KBWG KTTB KTBD KTIALG KILS KFEM KTDM KESS KNUC KPA KOMCCO KCEM KRCS KWBGSY KNPPIS KNNPMNUC KWN KERG KLTN KALM KCCP KSUMPHUM KREL KGH KLIP KTLA KAWK KWMM KVRP KVRC KAID KSLG KDEMK KX KIF KNPR KCFC KFTFN KTFM KPDD KCERS KMOC KDEMAF KMEPI KEMS KDRM KEPREL KBTR KEDU KNP KIRL KNNR KMPT KISLPINR KTPN KA KJUSTH KPIN KDEV KTDD KAKA KFRP KWNM KTSD KINL KJUSKUNR KWWMN KECF KWBC KPRO KVBL KOM KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KEDM KFLD KLPM KRGY KNNF KICR KIFR KM KWMNCS KAWS KLAP KPAK KDDG KCGC KID KNSD KMPF KPFO KDP KCMR KRMS KNPT KNNNP KTIAPARM KDTB KNUP KPGOV KNAP KNNC KUK KSRE KREISLER KIVP KQ KTIAEUN KPALAOIS KRM KISLAO KWM KFLOA
PHUM PINR PTER PGOV PREL PREF PL PM PHSA PE PARM PINS PK PUNE PO PALESTINIAN PU PBTS PROP PTBS POL POLI PA PGOVZI POLMIL POLITICAL PARTIES POLM PD POLITICS POLICY PAS PMIL PINT PNAT PV PKO PPOL PERSONS PING PBIO PH PETR PARMS PRES PCON PETERS PRELBR PT PLAB PP PAK PDEM PKPA PSOCI PF PLO PTERM PJUS PSOE PELOSI PROPERTY PGOVPREL PARP PRL PNIR PHUMKPAL PG PREZ PGIC PBOV PAO PKK PROV PHSAK PHUMPREL PROTECTION PGOVBL PSI PRELPK PGOVENRG PUM PRELKPKO PATTY PSOC PRIVATIZATION PRELSP PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PMIG PREC PAIGH PROG PSHA PARK PETER POG PHUS PPREL PS PTERPREL PRELPGOV POV PKPO PGOVECON POUS PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PWBG PMAR PREM PAR PNR PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PARMIR PGOVGM PHUH PARTM PN PRE PTE PY POLUN PPEL PDOV PGOVSOCI PIRF PGOVPM PBST PRELEVU PGOR PBTSRU PRM PRELKPAOIZ PGVO PERL PGOC PAGR PMIN PHUMR PVIP PPD PGV PRAM PINL PKPAL PTERE PGOF PINO PHAS PODC PRHUM PHUMA PREO PPA PEPFAR PGO PRGOV PAC PRESL PORG PKFK PEPR PRELP PREFA PNG PGOVPHUMKPAO PRELECON PINOCHET PFOR PGOVLO PHUMBA PRELC PREK PHUME PHJM POLINT PGOVPZ PGOVKCRM PGOVE PHALANAGE PARTY PECON PEACE PROCESS PLN PRELSW PAHO PEDRO PRELA PASS PPAO PGPV PNUM PCUL PGGV PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PGIV PRFE POGOV PEL PBT PAMQ PINF PSEPC POSTS PHUMPGOV PVOV PHSAPREL PROLIFERATION PENA PRELTBIOBA PIN PRELL PGOVPTER PHAM PHYTRP PTEL PTERPGOV PHARM PROTESTS PRELAF PKBL PRELKPAO PKNP PARMP PHUML PFOV PERM PUOS PRELGOV PHUMPTER PARAGRAPH PERURENA PBTSEWWT PCI PETROL PINSO PINSCE PQL PEREZ PBS

Browse by classification

Community resources

courage is contagious

Viewing cable 07PARIS2089, SARKOZY'S TAX CUTS

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #07PARIS2089.
Reference ID Created Released Classification Origin
07PARIS2089 2007-05-22 08:22 2011-08-24 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Paris
VZCZCXRO2431
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHFR #2089/01 1420822
ZNR UUUUU ZZH
R 220822Z MAY 07
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC 7463
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RUCNMEM/EU MEMBER STATES
UNCLAS SECTION 01 OF 02 PARIS 002089 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
PASS FEDERAL RESERVE 
PASS CEA 
STATE FOR EB and EUR/WE 
TREASURY FOR DO/IM 
TREASURY ALSO FOR DO/IMB AND DO/E WDINKELACKER 
USDOC FOR 4212/MAC/EUR/OEURA 
 
E.O. 12958: N/A 
TAGS: EFIN ECON ELAB PGOV FR
SUBJECT: SARKOZY'S TAX CUTS 
 
REF: Paris 2003 
 
1. (SBU) Summary:  President Nicolas Sarkozy's proposed fiscal and 
macro-economic policy reforms are every bit as ambitious as his 
micro-economic agenda (reftel).  In short order we expect Sarkozy to 
propose eliminating payroll taxes on hours worked above 35 hours, 
cutting inheritance taxes, introducing the tax deductibility of 
interest on primary residence mortgages, and limiting overall taxes 
to 50% of income.  Sarkozy hopes to accomplish this - and to 
increase R&D spending - while cutting France's debt/GDP ratio to 60% 
(from its current 64%).  In combination with proposed labor market 
reforms (reftel), Sarkozy's program is likely to have a positive 
short-term impact on economic growth, and a longer-term benefit for 
French competitiveness.  Downside risks include likely push-back 
from civil servants, whose ranks Sarkozy hopes to thin, and the 
potential for rising deficits should efforts to trim state spending 
not take hold.  End summary. 
 
The Challenge for Sarkozy 
------------------------- 
2. (SBU) President Nicolas Sarkozy's macro and fiscal policy 
proposals respond to France's numerous well-publicized economic 
challenges.  These include the burden of a state whose spending 
represents 53.7% of GDP, public debt of nearly 64% of GDP, low 
levels of R&D spending, significant payroll taxes, pension systems 
that discourage labor force participation among 55 - 64 year olds, a 
rigid labor market, and a tax environment non-conducive to small 
company growth (among others). 
 
Cutting Government and Pensions 
------------------------------- 
4. (SBU) Sarkozy hopes to cut France's budget deficit to 1.5% of GDP 
by overhauling ministerial structures, and in part by replacing just 
one out of two retiring civil servants.  He has taken an initial 
symbolically-significant step toward government reform by halving 
the number of ministries to 15.  Moreover, by establishing a budget 
minister with full cabinet rank (previously the budget minister 
reported to the Minister of Economy), he creates a guardian of the 
purse strings whose overriding interest is to balance the books. 
 
5. (SBU) That Sarkozy has placed oversight of public administration 
issues (previously the domain of a separate "public function 
minister") under the authority of the budget minister is 
significant.  The move has already been contested by unions who say 
that it is indicative of an approach that treats civil servants as 
little more than an "expense."  Sarkozy is also likely to increase 
patient fees and focus on prevention in an effort to cut France's 
healthcare deficit. 
 
6. (SBU) One of the most sensitive proposals is likely to be reform 
to France's "special" pension regimes for certain categories of 
government workers (including in the energy and transportation 
sectors).  Sarkozy has proposed that workers covered by these 
systems pay into the system for 40 years, versus 37 and a half as is 
currently the case.  Numerous governments have been down this road 
before - including most recently Francois Fillon as Labor Minister 
in 2003 - only to founder on the shoal of strong union opposition. 
 
 
Cutting Taxes 
-------------- 
7. (U) Sarkozy has tasked his new budget minister, Eric Woerth, with 
preparing a number of tax reforms in the coming months.  These 
include the elimination or reduction of taxes paid by employers and 
employees for "overtime" above the 35 hour workweek, and encouraging 
employers to boost overtime pay by 25 percent (reftel).  Sarkozy's 
government will also move in the coming months to reduce or 
eliminate the inheritance tax and to make mortgage interest payments 
tax-deductible. 
 
8. (U) Additional tax measures that can be expected in the near to 
medium-term include the following: 
 
--Lowering payroll taxes paid by employers by testing a social VAT 
in "some sectors". 
--Cutting income taxes and social charges as a percent of GDP (44.4 
percent in 2006) by 4 percent in ten years (or over a two-term 
presidency), including one percent (15 billion euros or 20.4 billion 
USD) as soon as 2007; 
--Exempting students' part-time work from income taxes; 
--Imposing an absolute ceiling for total taxes of no more than 50 
percent of personal income (versus 60 percent currently) as soon as 
2007; 
 
PARIS 00002089  002 OF 002 
 
 
--Exempting from wealth tax any investments in small and-medium 
sized companies up to 50,000 euros (68,000 USD); 
--Cutting the value-added tax (VAT) paid by restaurants to 5.5 
percent. 
 
The Risks 
---------- 
9. (SBU) While the business and economic policy communities have 
generally applauded the direction of Sarkozy's proposals, some 
economists have pointed up potential problems.  According to some 
estimates, proposed cuts in payroll taxes could cost the government 
up to 5% of GDP in revenue.  Moreover, there is concern in some 
quarters about the potential for fraud associated with the 
elimination of payroll taxes on overtime.  The policy could 
incentivize employers to use the measure to award payroll-tax-free 
salary increases, rather than to encourage legitimate overtime work. 
 Many economists have also taken issue with the distortional effects 
of making mortgage interest tax-deductible, and the efficiency of 
cutting inheritance taxes. 
 
Comment 
------- 
10. (SBU) Sarkozy's biggest challenge will come not from the policy 
wonks, but rather from the entrenched interests who have 
successfully seen off many attempts at reform in France.  This time 
may be different, and Sarkozy is off to a good start by having 
reached across party lines to put together his government.  We 
expect that some measures -- payroll and inheritance tax cuts and 
deductibility of mortgage interest -- are likely to be enacted 
quickly and with minimal controversy.  However, pension reform and 
proposed measures to shrink the state are both likely to raise the 
ire of French civil servants who have successfully blocked reform in 
the past.  Each of these issues, along with unification of the labor 
market and guaranteed minimum service (reftel), has the potential to 
put protesters on the street. President Sarkozy will have to tread 
carefully to keep his ambitious program from getting derailed. 
 
STAPLETON