French cut meal tax, get job bump

Back in July the French government decreed a whopping tax cut for diners. The country’s menu prices always include a 15% service charge (what we call a “tip”) as well as all the government taxes. The Sarkozy government proposed a win-win when it trimmed the meals tax from 19% to 5.5%. Economically stressed French folk (and dollar-poor Americans) could still afford to go to restaurants, and the increased business would create (so they said) 40,000 jobs in the first year. The opposition called it crazy, and pointed out that half those jobs were for apprentices.

Well, the first scorecard is in, and the program is working as planned. Between July and September, 6,500 jobs were created in the restaurant sector (mostly staff rather than apprentices) and the numbers are growing. The only problem is that there’s nothing in the law to keep restaurants from pocketing the difference between the old tax and the new. But most reputable establishments are printing menus that show the old (pre-July) price crossed out and replaced by a new lower figure. More jobs, lower prices to eat out — I can get behind that.

Posted by David Lyon, Globe Correspondent