IREF - Institute for Research in Economic and Fiscal issues
Fiscal competition and economic freedom
Abstract: The main characteristic of the French local tax system undoubtedly resides in a convoluted structure which impedes any progress in the development of tax competition between local authorities. On the contrary, recent legislative evolutions make obvious a trend of recentralization of the French local finance system illustrated by the fact the State is presently the first tax contributor to the local authorities’ budgets.
As a result, it becomes blatant that any new competence transfer to the local authorities without setting up an explicit financing scheme for these transfers will put an end to the local authorities’ autonomy.