Reviewing the financing of the social model, yes, but how?

President Emmanuel Macron called for a social conference on Tuesday evening "on the financing of our social model," which "relies far too heavily on labor." He called for this project to be launched "in the coming weeks" with unions and employers.

For the head of state, what is needed is "a social model that is less financed by work and more by other factors, in particular consumption" paid for in particular by "tourists" and "the most well-off people".

A hollow way of reviving the "social VAT" illusion passed in 2012 and immediately repealed by François Hollande, consisting of transferring reductions in contributions weighing on work to an increase of a few points in VAT.

Government spokesperson Sophie Primas on Wednesday called the idea of ​​a new social conference "very interesting," while Public Accounts Minister Amélie de Montchalin assured that the government would not act "alone in its corner."

On the union side, some are calling for "negotiations on social protection," both on governance and funding, like FO boss Frédéric Souillot.

On the other hand, the idea of ​​a social VAT is seen as "old hat" and is met with hostility from the unions. "VAT is the most unfair tax there is. It's a pittance for the rich and a considerable expense for the poorest," protests Denis Gravouil of the CGT (General Confederation of Labour).

"It's anything but socially fair," argues Eric Gautron, in charge of social protection at FO, fearing that "as soon as we switch from contributions to taxes, it's the nationalization" of social security.

"The worst tax"

On the employer side, all employer organizations are calling for a reform of social security financing, with the Medef and the CPME (French employers' association) supporting social VAT. The U2P (Union for a Popular Movement) has proposed a "big bang" to improve net earned income by eliminating the CSG-CRDS (General Social Contribution) and finding revenue from pensions, annuities, inheritance, and VAT.

But Mr. Macron retorted on Tuesday that these contributions should not be "mitigated," insisting on the option of financing based on consumption.

In the political class, social VAT is criticized on the left as well as in the RN.

"We cannot make low-income French people pay for what we do not make businesses pay," declared Socialist Party leader Olivier Faure.

"It's always the easy way out. Another tax increase, the most unfair," "the most massive," which "affects everyone," noted RN MP Jean-Philippe Tanguy on RMC.

Eric Heyer, director of the OFCE's Analysis and Forecasting Department, noted to AFP that there is "a sort of consensus that our social model should not be financed solely by contributions," which is "no longer the case," with a large portion being paid for by taxes. But, he says, "we need a method, and this is perhaps where we don't all agree."

Within the social model's expenditures - pensions, family, health, poverty, unemployment - he believes that what is universal, such as family and health, should not be "financed solely by workers", but by a tax, while it is "logical" that pensions or unemployment should be financed by contributions.

But when it comes to taxation, while favouring the CSG (General Social Contribution), he believes that VAT is "the worst tax".