The range of slogans in the protests against November’s gasoline-price increases—“Stop the taxes!” “Macron’s a pickpocket!,” “Working is becoming a luxury,” “Right and left = taxes,” “Stop the racket, the revolt of a powerful people may end in revolution”—suggests both the possible emergence of a political movement and the anger directed at taxation, the very foundation of the social state.

Throughout the 20th century, there was minimal working-class engagement with the issue of tax. When progressive income tax was introduced after World War I, the main opposition came from the liberal professions, the self-employed, and farmers, who formed tax payers’ associations. Thereafter, except during the Popular Front (1936-1938), the theme of unfair taxation had only a marginal place in the labor movement compared to key issues such as wage demands and defending jobs. Even regressive, indirect taxes on consumption such as value added tax (VAT) have rarely had the power to mobilize unions and parties on the left.

But in the past few years challenges to the taxation system have gained such momentum that tax has become a central issue in the anti-austerity struggle. In Portugal, in May 2010, tens of thousands demonstrated against tax rises and spending cuts. Two years later there were big demonstrations in Spain against austerity, privatizations, and higher VAT (on school supplies, for instance, it increased from 4 percent to 21 percent). In Greece, public- and private-sector employees took to the streets in protest at lower salaries and unfair taxes. And in 2013, French food-plant workers facing redundancy joined forces with the Bonnets-rouges (red-caps) movement launched by farmers and small-business owners to defeat an eco-tax on heavy-goods vehicles.

It was government policies that thrust the tax debate center stage. With rising mass unemployment and greater international competition, politicians have gradually abandoned intervention on the primary division of revenue between wages and profits. In recent years, the social question—formulated in terms of sharing profits—has been replaced by a tax question, deployed to win working-class support. In 2007, Nicolas Sarkozy’s slogan—”Work more to earn more”—and plans to make overtime tax exempt appealed to many working-class voters. In 2012, François Hollande gave his manifesto popular appeal with the promise of a new 75 percent tax rate on annual income over 1 million euros, though the policy was so poorly conceived that it was thrown out by the Constitutional Council. In 2017, Emmanuel Macron used a promise to abolish residence tax to offset his image as a candidate of the elites, but later announced it would be phased out over three years.

There is a major paradox at the root of this politicization of tax: The working class are now the group most likely to criticize the taxation level, even though they benefit most from the tax-based redistribution system. The degree of dissatisfaction varies geographically. People furthest from the big cities are most likely to feel unfairly taxed; those in the countryside and outer suburbs are much more critical of the system than Parisians. After several years of policies intended to encourage property ownership, many lower-income households who took on debt to buy their homes are also suffering from property-tax rises, which are being used to compensate for reduced central funding for local authorities.

Deteriorating public services

In some areas, the feeling of injustice stems from deteriorating public services and transport, especially rail line closures. To people in such situations who mainly travel by car and suffer most from gasoline-price increases, it feels as if their key institutions—the local manifestation of the social redistribution of tax receipts—are vanishing, from post office to school and railway station.

Tax scandals have also fueled popular distrust of the tax authorities. In 2011, it was revealed that France’s richest woman, Liliane Bettencourt, had concealed almost 100 million euros from the authorities and made cash donations to Sarkozy’s election campaign. That was followed by the case of Jérôme Cahuzac, Hollande’s junior budget minister entrusted with tackling tax fraud, who admitted in 2013 that he had 600,000 euros in a secret Swiss bank account, despite earlier denials. Then there was a series of leaks: Luxleaks, Swissleaks, Offshore Leaks, the Panama Papers, and the Paradise Papers, all of which shed light on the tax-evasion schemes of multinationals, politicians, and celebrities from the worlds of sport and entertainment. These revelations exposed the myth of equal treatment for all under the tax system. In reality, there were two systems: In one, ordinary taxpayers were told they had to help to restore public finances; in the other, the powerful flouted the law and faced no consequences. (Bettencourt, who died in 2017, was never charged, and although Cahuzac received a four-year sentence, he stayed out of prison.)

Over time, the working class’s dealings with the authorities have only confirmed the feeling of one law for the rich. The poorest taxpayers often rely on civil servants to clarify their rights and have to cope with the tax system’s complex terminology. Civil-service cuts have had an impact on this; between 2005 and 2017, successive governments have got rid of 35,000 jobs across the public-finance system, including many frontline staff. In rural areas, tax-office opening hours have been cut and the queues in the towns have grown longer; that penalizes the least-educated taxpayers, who prefer face-to-face contact to online services, especially when they’re seeking discretionary exemptions from residence tax, property tax, or television license fees because they cannot pay. With more unemployment and less job security, such requests increased from 695,000 in 2003 to 1.4 million in 2015. But the prospect of convincing the taxman of the merits of your case varies according to your social class; our survey of people engaged in a tax dispute in 2017 found that 69 percent of those in higher classes received a favorable decision compared to just 51 percent among the working class.

The financial crisis has also had an impact. For salaried employees and small-business owners, whose purchasing power has been stagnant, or is declining, taxes seem less like a quid pro quo for public services and more like an extra expense. Their sense of injustice increases when their struggle to pay is combined with a belief that their money is being used to enrich people who are better off than they are. Since the 2008 crisis, job losses and the disintegration of the industrial fabric have starkly revealed politicians’ inability to challenge offshoring. The state, once seen as a guarantor of protection, now seems like a distant institution that serves the powerful.

Non-graduate workers’ protection gone

In addition, in small businesses especially exposed to international competition, tax is often seen as a direct threat to job security. This perception, amplified by the media’s coverage of “burdens on the cost of labor,” means workers are making common cause with bosses, especially over income tax and over-regulation.

In an atomized labor market in which employers readily use outsourcing, challenges to tax also come from young non-graduate workers, who have been badly affected by unemployment and job insecurity. For many of them, the atomization of work has meant the erosion of group solidarity and a loss of a sense of affiliation: a far cry from the stability of civil service employment. These workers consequently resent the state and its employees, who enjoy a level of protection they lack.

Self-employment is one option for those worst affected by the crisis, but many who take this path feel that excessive costs are put upon them. The image of a small business crippled by tax and social-security payments goes with that of a state that is out of touch with real-world challenges. The value accorded to work as a source of dignity and reward is accompanied by the stigmatization of (tax-funded) welfare. The destabilization of whole sectors of the lower-paid workforce has fed the working class’s growing distrust of tax, with preserving jobs at all costs the ultimate goal.

The working class’s sense that their trust has been betrayed over the funding of the welfare state has long been hidden in taxation debates. It comes into play during election campaigns, but politicians are always more concerned that the middle class—the social group with which the majority of voters identifies—and upper class continue to support the principle of taxation. Since the early 1980s there has been a proliferation of tax loopholes offering new ways to reduce income tax, whereas VAT has remained the same for all, and only the transportation sector has received any fuel-tax concessions. There are many ways for households to reduce their income-tax liability—such as party and association donations, home working, and energy-efficiency schemes—which also enable optimization schemes for the wealthiest.

Measures that benefit the richest

Such exemptions influence tax rate rises. According to our research, taxpayers who exploited at least one tax loophole are 1.4 times less likely than those who did not to agree that the French pay too much tax. The drama played out in the media this autumn over deductions at source has shown a government ready to mobilize in defense of measures that benefit the richest: Prime Minister Édouard Philippe eventually decided that 60 percent of certain tax credits would be paid in January 2019 and not six months later as originally planned.

The government has also passed other measures that benefit the richest, such as the extension of the Dutreil pact, which allows business owners to pass on their businesses, as a gift or inheritance, and avoid most or all transfer-tax liability. This windfall completely escaped media attention and has not been fully costed; enlarging this loophole, which already costs the public purse around 500 million euros a year, represents a very substantial saving for beneficiaries.

Meanwhile, journalists and politicians have kept their eyes firmly on the gilets jaunes (yellow vests). Even if it’s too soon to say if the movement will last, the gilets jaunes have revealed, among other things, the working class’s long-held feelings of the tax system’s injustice.