I was watching Fox News for a few laughs, and came across a segment where Stuart Varney, filling in for Neil Cavuto, started taunting Air America’s Mike Papantonio about liberal loving France’s recent cut in taxes. Varney made it seem like France did something radical and more in line with Republican talking points. Guess again Varney:
I’m sure Varney knows that Republicans would love to do away with the federal tax and put in place a value added tax, you know, like the one the French are cutting. The final value added tax is 5.5%, the average for many states in the U.S., from an incredible 19.6% in France. And it’s only on restaurants, who have no obligation pass that savings on to customers.
France's finance minister, Christine Lagarde, dropped in on diners aimed at touting the government's new tactic to get the French spending again: lower taxes on restaurant food. The government's decision to slash the value-added tax, a levy similar to sales taxes in the U.S., in French restaurants to 5.5% from 19.6% starting July 1, But economists, and restaurateurs themselves, say they don't expect much of a windfall from the lower tax on France's restaurants, cafes and bars … restaurants may ultimately see an increase in business if they pass the tax cut onto their consumers. "But that will be very difficult to measure," he says.
Moreover, because restaurants are not under any obligation to reduce their overall prices, the effect of the tax cut on overall consumption could in fact be limited. "A share of this cut in VAT will be absorbed by restaurant owners to improve their margins," he said. The drop in tax … is expected to cost the French state more than $2.8 billion.
Good plan Stuart Varney.