Chapter 263 Some Financial Discussion Part 1
Three days later, in the Palace of Versailles, Napoleon remained confined to his office, deprived of any opportunity to spend time with his family. He rubbed his temples in frustration and muttered to himself.
"I'm starting to despise this bureaucratic work. It feels like every day is just another day of endless paperwork."
Glancing at the towering stack of documents awaiting his attention, he sighed deeply. The never-ending administrative duties were taking a toll on him.
"At this point, I'd prefer to be on the battlefield," Napoleon grumbled. "There, the paperwork is minimal, and the focus is on combat rather than these endless documents."
Napoleon leaned back in his ornate chair, his thoughts drifting momentarily from the burdens of his office to memories of past battles and campaigns. He missed the thrill of leading his troops into the chaos of war, the smell of gunpowder in the air, and the strategic challenges that had once consumed his mind.
The relentless paperwork before him seemed almost cruel in comparison. He knew, however, that his role as First Consul of France required more than just military prowess. It demanded the careful management of the nation, and that meant slogging through mountains of bureaucratic documents.
With a resigned sigh, he picked up a pen and got back to the monotonous task at hand.
As Napoleon was grappling with the paperwork, there came a knock on the door. He glanced up, a bit annoyed at the interruption.
"Come in," he called out, his gaze fixed on the paperwork, his hands never halting.
The door creaked open, and Beaumont entered. "Your Excellency, you have a visitor."
"A visitor?" Napoleon repeated. "I don't remember having an appointment with anyone today. Who is it?"
"It's Jacques Necker, Minister of Finance," Beaumont revealed.
Napoleon stopped writing and looked up from the paperwork. "Necker?"
"Yes, Your Excellency."
"It must be an important one…" Napoleon sighed, setting down his pen and pushing the stack of papers aside. "Very well, send him in."
Beaumont nodded and stepped back to allow Jacques Necker to enter the room. Necker, a man of moderate build with a receding hairline and spectacles, entered with a respectful nod to the Emperor.
"Your Excellency," Necker greeted, "I hope I'm not intruding. I know you're busy."
Napoleon waved a hand dismissively. "No, no, Minister Necker, not at all. Please, have a seat." He motioned to the chair in front of his desk.
Necker took a seat, adjusting his spectacles and clearing his throat. "I've come to discuss the prospect of making our economy higher. Your Excellency, the establishment of the Banque de France is successful in stabilizing the nation's economy to a certain extent, but we still face significant challenges," Necker began, his tone earnest.
Napoleon leaned forward, his expression attentive. "Go on, Minister. Tell me the details."
Over the course of the meeting, Necker presented a detailed report on the state of France's economy. They discussed revenue, expenditures, and the need for fiscal reforms to strengthen the nation's financial stability. Napoleon listened carefully, his mind shifting from the paperwork that had burdened him earlier to the pressing matters of state.
As for fiscal policy, Necker proposed tax Incentives for innovation, support for small and medium-sized enterprises, and debt management. Napoleon already made one, which is an investment in infrastructure. Necker wanted more and when the topic was about increasing the treasury of the government, Napoleon caved.
"Also Your Excellency, a group of industrialists are calling for a tax break so that they could invest in infrastructure in France's colony…"
"Tax break, you say?" Napoleon mused, leaning back in his chair and rubbing his chin thoughtfully. "Investing in the colonies, you mean."
Necker nodded. "Yes, Your Excellency. The industrialists argue that offering them a tax break would incentivize them to channel their resources into developing infrastructure in our colonial territories, particularly in New France, French India, North Africa, and Australia."
"But aren't those industrialists making up most of the government income? If we grant the tax breaks to those industrialists, how would we earn?" Napoleon asked, curious as to what Necker had in mind. After all, he won't be suggesting it to him when Necker is also aware that it'll drop revenue for the government.
Necker cleared his throat, addressing Napoleon's concerns.
"Your Excellency, you are correct in noting that these industrialists are significant contributors to our government's income through corporate taxes and other revenues. Granting them tax breaks, even temporarily, would indeed reduce immediate tax revenue. However, the rationale behind such tax incentives is to stimulate economic activity, job creation, and long-term growth, which can eventually lead to increased tax revenue in other forms."
He continued, "Allow me to elaborate, Your Excellency. When industrialists are granted tax breaks and choose to invest in vital infrastructure, the effects on our economy are fourfold.
Firstly, tax incentives serve as a catalyst for industrialists to direct their resources toward infrastructure development, business expansion, and other initiatives that stimulate economic growth. This, in turn, results in heightened production, the creation of job opportunities, and increased individual incomes, all of which contribute to the overarching expansion of our economy.
Secondly, as our economy experiences growth, the tax base – encompassing the total income and economic activities subject to taxation – undergoes expansion as well. This signifies that even with the reduction of tax rates or the provision of tax incentives for specific endeavors, the overall tax revenue generated from a more extensive tax base can counterbalance the immediate revenue loss attributed to these tax breaks.
Thirdly, the tax savings industrialists gain through these incentives often find their way back into their businesses. This encourages augmented expenditures on materials, equipment, labor, and various other goods and services. Such heightened economic activity not only further stimulates our economy but also generates additional tax revenue through mechanisms such as sales taxes and other indirect taxes.
Lastly, tax incentives that promote increased hiring by businesses can effectively reduce unemployment rates. This, in turn, results in an upswing in personal income tax revenue as more individuals become active participants in the workforce."
Taking all that in, Napoleon sighed. "I understand now. So, how long should the tax break last if I were to grant it?
Necker responded with a straightforward and pragmatic tone, taking into account Napoleon's inquiry.
"Your Excellency, the duration of the tax break, if granted, would ideally align with the projected timeline of infrastructure development and economic growth in the colonies. Since we are talking about heavy industries…" he paused and raised a hand. "Five years, grant them a five-year tax break and I assure you, Your Excellency, the economy of France would witness significant development and growth in that timeframe."
Napoleon nodded. "Fine."
"Great!" Necker beamed a smile. "Oh, I forgot to say this, Your Excellency, the Banque de France is issuing new banknotes to facilitate the increase in economic activities and trade within our colonial territories. This will further support the development efforts during the tax break period. And speaking of banks, Your Excellency, a lot of private individuals want to start their own banking business."
Napoleon hummed aloud. "I don't know about that. Let's come up with a regulatory body and whatever things are necessary to ensure that these private banks operate within a framework that's in line with our economic goals and stability. We don't want unregulated banking activities causing financial chaos."
"I can help you come up with one, Your Excellency," Necker proposed.
"That would be great," Napoleon said. "Okay, this has been a productive discussion. Is there anything else you'd like to discuss?"
"Yes, Your Excellency. We could increase our economy in other ways. Your Excellency, how versed are you in the stock exchange?"
R𝑒ad latest chapt𝒆rs at freew𝒆(b)novel.c(o)m Only