Might this be another “doubly stupid” economic policy?

by on December 24, 2013 at 6:42 am in Law, Sports | Permalink

The first part is this:

Thousands of disgruntled horse and pony riders rode through the French capital to complain about tax increases they say will put many of them out of business and send 80,000 animals to the abattoir.

The “cavaliers” blocked roads from the symbolic Paris squares, Place d’Italie, Place de la Bastille and Place de la Nation, in protest at government plans to almost treble VAT on equestrian centres.

The response of the government is this:

France has about 700,000 horse-riding instructors and 2.3 million people who ride, 82% of them women. It is the third most popular sport in France.

The government has promised subsidies to prevent riding schools from going under…

The article is here, and I thank Phil Steinmeyer for the pointer.  Here is a previous example of a multiply stupid policy, strange how they both involve horses…

W.E. Heasley December 24, 2013 at 7:45 am

“….strange how they both involve horses…”

Maybe, just maybe, “they both involve” the oft used expression of “The cart before the horse” and hence the horse theme.

Then again, it may merely be the horse manure of political answers to economic questions.

-Or- in the words of Michael K. Farr when describing the Obama “stimulus” package in conjunction with Federal Reserve actions [paraphrasing]: Even a dead race horse will get up and do a couple laps around the track if you stimulate him with four trillion dollars”.

harley December 24, 2013 at 7:48 am

Not stupid, just subtle.

The apparent subsidy will be much less than revenue raised by the new tax. That subsidy is merely a public relations ploy to ease the initial tax protest. The VAT hike is permanent, the subsidy will be temporary. Net win for the government, as usual.

“The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing”
— Jean Baptiste Colbert (French Economist and Minister of Finance)

Frederic Mari December 24, 2013 at 9:49 am

What differences exist between the gvt at the time of Colbert and in modern times? Take your time, this is not a trick question…

fsakldfajkldf December 24, 2013 at 12:02 pm

The government at the time taxed largely to fun the personal whims and desires of fat, pampered kings. The government today taxes largely to fund the personal whims and desires of fat, pampered 90 IQ welfare dumbs as well as the latest in foreign brown people killing weapons?

James December 24, 2013 at 7:04 pm

you should probably try getting out of whatever godforsaken backwater you spend your life in.

Handle December 24, 2013 at 7:51 am

It’s not strange – horses have a special hold on the human heart – the top tier charismatic macrofauna because domesticated but never quite a pet. Have you ever read a negative or critical portrayal of horses? It’s always Black Beauty or Swift’s ode to them in the form Houyhnhnms.

Protip: If you want to make some stupid policy popular, make sure you frame it as being done, ‘for the horses’.

prior_approval December 24, 2013 at 8:02 am

‘Have you ever read a negative or critical portrayal of horses?’

Well, I’m sure that various restaurant reviews in France are quite negative or critical of how horse is prepared for eating. Ah, wait – you didn’t mean as food, did you?

al b sure December 24, 2013 at 11:12 am

that play “Equus”, which Harry Potter played

Rahul December 24, 2013 at 8:05 am

Case in point: The huge uproar over horse meat / slaughter in the US a few years ago.

prior_approval December 24, 2013 at 8:34 am

This is the current French horsemeat scandal, as of December 17, 2013 –

‘Police have arrested 21 people in raids on the horse meat industry across southern France and Spain on suspicion that horses used to develop medicines were sold fraudulently for food.

The arrests were made following a tip-off that hundreds of horses, including some that had been owned by pharmaceutical giant Sanofi, were sold to abattoirs after their veterinary papers were falsified, a police source told AFP.

A Sanofi spokesman says it used the horses to incubate antibodies to manufacture serums for everything from rabies to snake bites, and they were in good health but not certified as fit for human consumption.

Spokesman Alain Bernal of the Sanofi Pasteur vaccine division said the firm was cooperating with investigations but did not know how long the fraud had been going on.

“It could involve hundreds of horses if this has been going on for several years,” Mr Bernal told Reuters.

“In the last three years, we must have discharged about 200 horses.

“Horses are a factory of antibodies.”‘ http://www.abc.net.au/news/2013-12-17/police-raids-in-france-spain-new-horse-meat-scandal/5160370

Bo Laurent December 29, 2013 at 10:03 am

“I know the horse too well. I have known the horse in war and in peace, and there is no place where a horse is comfortable. A horse thinks of too many things to do which you do not expect. He is apt to bite you in the leg when you think he is half asleep. The horse has too many caprices, and he is too much given to initiative. He invents too many new ideas. No, I don’t want anything to do with a horse.”

- Mark Twain’s Speeches, 11/10/1900

Hugh G. Rection December 27, 2013 at 8:41 am
prior_approval December 24, 2013 at 8:00 am

This is a bit puzzling – you mean that a ‘sport’ practiced mainly by well off women should not have taxes raised?

Or that raising taxes on a sport practiced by something like 5% of the population is a bad idea? Because they are well placed to complain about it effectively?

Or that France’s economy would suffer if horse riding (as compared to horse eating) was no longer

I was in St. Malo this summer – the riding school overlooking the coast was lovely. And obviously not paying anything resembling a rent that reflected its value in terms of location. There is plenty of farmland without a seaside view a few minutes drive away from a quite well off population – but apparently, they don’t want to drive when it is possible to have their horses close at hand. Though the park(s) surrounding the riding school are quite nice.

Showing just how the French do things. compared to the sort of vision which governs the U.S. – when I was a kid, growing up in Vienna, that part of Fairfax was still horse country. (Anybody else remember the saddle shop in Oakton?) However, since horse raising was not privileged enough, that part of Fairfax no longer has anything resembling property owners with horses, riding instructors, or feed stores (anybody remember the feed store in Fairfax City – or the Southern States Cooperatives?).

Was that doubly stupid? – after all, the property taxes on such land more than trebled.

prior_approval December 24, 2013 at 8:04 am

‘was no longer’ practiced. (Or other words to that effect, seeing as how they weren’t written.)

Urso December 24, 2013 at 9:49 am

“And obviously not paying anything resembling a rent that reflected its value in terms of location.”

How considerate of them to let you audit their books & ledgers, seeing as how you were just a tourist and all.

TMC December 24, 2013 at 10:10 am

And more likely an artifact of strict building codes.
Gov’t regulation artificially keeping the price of good land cheap.
It is said liberals have no sense of unintended consequences, this is example #3429

Alan Coffey December 24, 2013 at 8:06 am

I wonder if this scenario might come to pass for NASCAR tracks someday soon in the US. Nah, just let them open casinos instead.

prior_approval December 24, 2013 at 8:08 am

So, doing a bit of rereading, this was actually more interesting than the number of women riders, which caught my eye first – ‘about 700,000 horse-riding instructors and 2.3 million people who ride.’

Something sounds quite interesting when one thinks that there is one instructor for every three people who ride in France. Almost as if, to be delicately cynical, riding instructors get all sorts of tax breaks/subsidies in terms of horse ownership, property tax breaks, etc.

Frederic Mari December 24, 2013 at 9:53 am

Or the ability to meet rich women… Plenty of riding to do and, though it’s back breaking work, it can be quite pleasant and decently remunerative…

Dan Weber December 25, 2013 at 12:20 pm

I suspect rich women wouldn’t participate in a sport that had a high participant:teacher ratio anyway.

Bill December 24, 2013 at 8:52 am

Ireland may be going bankrupt, but they do not tax horse owners and their stables, even though the owners are from the Middle East.

Neigh, horses have huge sway.

Mark Thorson December 24, 2013 at 12:07 pm

I’m not fond of horses, but everything I hear about their tax system makes me want to move there. What do they tax?

Bill December 24, 2013 at 1:25 pm

I think the Irish are fond of both horses, and Middle East horse owners.

As to whom they tax, just visit Ireland and count the VAT taxes on your pub bill.

The VAT tax, It tolls for Thee.

chuck martel December 25, 2013 at 12:34 am

Horse racing is the national sport of Ireland. The Aga Khan’s residence is in Sardinia but his race horses live in Ireland.

Bill December 25, 2013 at 8:53 am

Baseball is a national sport in the US, yet we tax baseball players.

Bill December 25, 2013 at 9:01 am

Also, Chuck, it is not taxation based on residence, but taxation based on economic activity–taxation on breeding fees, sales of horses, etc.

Edward Burke December 24, 2013 at 9:40 am

BTW, Tyler, have you ever consumed horsemeat? Equine meat is said to be more healthful for our diet than beef, less fat, apparently. I’ve never tried it myself, so can’t speak to the flavor or preparation. France has enjoyed its status as purveyor of fine horsemeat for a good long while, if Franju’s documentary “Blood of the Beasts” is to be believed.

And MERRY CHRISTMAS! to you and all.

dearieme December 24, 2013 at 9:45 am

Horsemeat is pleasant enough. So is kangaroo.

Like any other meat, the secret is to hang it for long enough.

(The first time I visited the US I don’t think that any of the meat I ate had been hung at all. No doubt all is different now.)

Edward Burke December 24, 2013 at 10:04 am

Sadly, the only kangaroo I’ve had came from a can of kangaroo tail soup. I remember the split pea consistency. The thin slices of tail from the happy ruminating marsupial on the label had a fine texture but were not eminently flavorful. (The can was quite old by the time its contents were consumed, however.)

“Hanged” meat: as in “smoked”? (I know nothing about curing meats.)

dearieme December 24, 2013 at 10:22 am

We had ‘roo in a restaurant in South Australia in a period when it was the only state that permitted the eating of the National Symbol. Good tucker!
When I later ran one down, before I’d even opened my mouth my wife said no: we were not going to butcher it. So our roadkill-for-dinner list has never grown beyond pheasant and deer.

“Hanging” meat: herewith
http://en.wikipedia.org/wiki/Hanging_(meat)

Just as you will always hang game, you will, if you hope to enjoy it properly, hang beef and lamb.

dearieme December 24, 2013 at 11:45 am
TMC December 24, 2013 at 1:20 pm

That was a good article, thanks.

Blaise December 24, 2013 at 9:56 am

Not so stupid. Sport is subsidised in France and there are some kinds of rules around that. One principle is that sport with more participants get more money not that more expensive sports get more money. Anyway, a subsidy will be more transparent and will force the horse federation to compete with other sport federations every year for subsidies. It’s less distortion even if it sounds like more control from the State. And obviously, on the long run, it’s easier to decrease a subsidy than changing a VAT rate.

It’s worth noting that the current French gvt implements policies that should reduce economic distortions such as a tax on lorry pollution (rejected because of protests in Brittany unfortunately), alignment of VAT rates, closing of tax loopholes, opening of some markets to more competition (such as glasses, taxis etc.). The main incentive is often to raise gvt revenue but a good outcome could be a less distorted fiscal system. It would be nice on the long run if we could start diminishing the overall amount of taxes but keeping a better fiscal system.

FC December 24, 2013 at 11:46 am

When has a Socialist government anywhere made “a less distorted fiscal system”?

FE December 24, 2013 at 11:14 am

In a country where government spending is 56% of GDP, pretty much every sector is simultaneously taxed and subsidized, so the fights are over the margins.

Doug December 24, 2013 at 11:37 am

“If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

Bill December 24, 2013 at 11:46 am

This post must imply that the elasticity of riding a horse is very high….that increasing the price of horse riding by imposing a VAT tax on dressage will lead to a dramatic drop in horse ridership, leading to Flicker being trotted off to the glue factory.

Really> Do you think that people who ride horses will bolt from riding a horse if they have to pay a VAT tax?

Will they shift their consumption of ridership options to untaxed mules?

What would Mitt’s wife do?

Bill December 24, 2013 at 12:04 pm

Or, you can think of it this way:

If your entry to the French Disneyland (EuroDisney) has a VAT tax, but riding a horse does not, does that mean we favor Flicker over Dumbo?

Careless December 24, 2013 at 1:06 pm

Really> Do you think that people who ride horses will bolt from riding a horse if they have to pay a VAT tax?

There have been a lot of reports in the past couple of years about fairly large numbers of horses in the US being abandoned/left at shelters due to increasing food costs, so I’d say it’s plausible.

Bill December 24, 2013 at 1:20 pm

From the perspective of the horse,

Is it better to be confined in the horse barn,

Or

Run Free.

ST December 24, 2013 at 8:08 pm

Taxed and subsidized? On net a person (or a company) is either a net tax payer (e.g. Microsoft) or a net tax consumer (e.g. Solyndra).

Bill December 24, 2013 at 8:26 pm

Microsoft a net tax payer???? Not any more than Apple is. Or GE

ST December 25, 2013 at 8:55 am

http://www.forbes.com/sites/christopherhelman/2013/04/23/which-corporations-pay-the-most-taxes/

Apple is #3 and Microsoft is #10.
I have no idea why you think they are subsidized on net. They aren’t .

Peter December 24, 2013 at 10:26 pm

This has got to be some sort of record. A post about France, 36 comments so far, and not one word about how those horrible Muslims have taken over country.

Gael December 25, 2013 at 1:07 am

This tax is just yet another stupid european unelected sold bureaucrats decision. But European people prefer to get over instead of sending all those toxic people to washed alley.

Tjamesjones December 25, 2013 at 4:15 am

Happy Christmas all. Off topic: how do you extract value from the guardian newspaper? Focus on facts and ignore the analysis?

Mark December 25, 2013 at 5:45 pm

If it’s the third most popular sport, why does it need a subsidy? What do sports 4 –> n get?

TallDave December 27, 2013 at 10:39 pm

Ah, Socialists.

cecil December 28, 2013 at 11:20 am

The problem is too much taxes. Everywhere. Tax and you destroy.

Africa for Africans, Asia for Asians, White Countries for Everyone???

Enough

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