France’s First Move in the Looming Brexit Job Race War
In a move that is likely to underline the pro-business reform agenda of the recently elected president Emmanuel Macron, French Prime Minister Edouard Philippe announced a raft of new tax initiatives aimed at attracting businesses to Paris and the country at large. The new tax initiatives will see France heighten the stakes in the job race that is looming following Britain's move to leave the European Union. The announcements marked a significant step towards achieving President Macron's pro-euro platform he campaigned to defeat Marie Le Pen who stood on an anti-immigration and anti-euro platform during the May 2017 presidential elections.
Cutting Corporate Tax to Attract Corporations to France
The newly announced tax cuts include elimination of the intraday trading levy and reducing the payroll tax paid by financial institutions by removing the highest tax bracket that currently exists. The government also aims at introducing a financial policy that will offer significant reprieve for lad off traders. If passed, the policy will see the exclusion of variable pay when calculating the traders' damages. The newly announced measures are part of President Macron economic policy pledge in the run up to the elections to trim the country's corporate tax 25 percent by 2022. He pledged to implement the policy in phases and this marks the first phase of his policy. The government also plans to introduce a flat tax rate of 30 percent on all capital revenues. Additionally, the government plans to introduce a wealth tax of 33 percent by 2019.
Adding a Spin to Brexit Job Race
Following the Brexit, various European powerhouses have intensified their policy initiatives aimed at luring traders and bankers to their respective financial and economic capitals. These initiatives have been informed by the growing indications that many expatriates working in Britain will lose their work permits. Moreover, Britain's move to leave the trading bloc significantly shrunk the markets for the various multinational corporations that called London and other cities home. Even British banks will lose a significant market and will therefore be forced to use subsidiaries and business units based in other countries to access the now 27-member European Union trading bloc.
Presently, several multinational corporations have indicated that they will be moving their businesses from London to other cities in Europe including Dublin, Madrid and Frankfurt among others. Due to the Brexit, Deutsche Bank has already indicated that it will be moving most of its operations that were being conducted in London to Frankfurt. Others such as Morgan Stanley, Citibank, Nomura, Standard Chartered and Goldman Sachs have also indicated their desire to move to the German city.
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