Romain Bausch

Financing tax cuts through growth “doesn’t work!”

Formerly the deputy head of the finance ministry, Romain Bausch doubts that tax relief financed by growth will produce results. Photo: Maison Moderne/Archives

Formerly the deputy head of the finance ministry, Romain Bausch doubts that tax relief financed by growth will produce results. Photo: Maison Moderne/Archives

Receiving the Arthur C. Clarke Foundation’s “Life Achievement Award” in the United States this week--joining the ranks of Stephen Hawking, George R.R. Martin and Elon Musk--Romain Bausch, chair of the National Public Finance Council, reiterated: tax relief financed by growth “doesn’t work!”

“During the campaign, the parties hear a lot of things and probably forget a few.” Speaking to Caroline Mart on RTL, Romain BauschRomain Bausch didn’t even crack a smile when he said that the candidates for the Chamber of Deputies didn’t hear warnings from the country’s statistics bureau Statec or the National Public Finance Council at the end of June.

“You can always fund tax relief when you have the budgetary means or when you raise other taxes…” he said.

For Bausch, formerly the head of SES and deputy head of the finance ministry, financing tax cuts through growth doesn’t work. “It’s very clear… if we make consumption a little easier by lowering taxes, then a small part of that goes to Luxembourg, but a large part is exported,” he said. This is a message that formateur Luc FriedenLuc Frieden (CSV) will perhaps listen to more than outgoing ministers. Last June, when the National Public Finance Council published one of its opinions, Bausch invited the candidates to be precise about how they intended to finance their tax promises.

Bausch also pointed out that “it’s not because you exceed 30% debt as a proportion of GDP that you lose your triple-A rating: it all depends on how the debt develops. In my opinion, the government should have taken on a lot more debt over a year ago, because it would have borrowed at 0%! It might have been a good idea to go into debt to finance a solution to the construction crisis.”

Bausch is a perfect illustration of the famous adage no man is a prophet in his own country: while the politicians he met in June shrugged their shoulders and ignored him--considering that he had his role and they had theirs--on 8 November, at the French Embassy in Washington, the former head of SES received the Life Archivement Award from the Arthur C. Clarke Foundation.

This article was originally published in Paperjam. It has been translated and edited for Delano.