Taxation of Savings and Portfolio Choices of French Households

France is the European country in which, together with the United Kingdom, the taxation of saving is highest (6% of GDP in 2016, against on average 3.8% in the European Union and 3.5% in the euro area). This situation is evaluated with regard to the theoretical debate on optimal taxation. Although no clear-cut conclusion can be drawn from that debate, it appears that the “dual Nordic” is nowadays widely considered as satisfying. However, theoretical research tends to underestimate the genuine tax burden, as they do not take two factors into consideration, namely cumulated taxation and inflation. In fact, although taxation is only one the factors that influence the allocation of assets, it plays an important role in savers’ choices. As an illustration, an evaluation of the impact of the newly-created ‘prelevement forfaitaire unique’ (single flat tax on saving income) is provided by Christian Pfister.