This article argues that fiscal welfare in Europe not only forms part of the “hidden welfare state” (Howard, 1997), but also constitutes an important yet understudied—and therefore hidden—element of welfare state reform. Using the example of France, and relying both on available data and on an exhaustive database of social tax expenditures (STEs) compiled for 2014, the article begins by providing an overview of the structure of STEs in France (section 2). It then analyzes the specific uses and effects of STEs in the fields of employment, health care, and pensions. In particular, it shows, first of all, how STEs have constituted a privileged instrument for circumventing certain institutional features such as high levels of minimum wage and of social security contributions in the field of employment (section 3). Second, it also shows that STEs have been used to quietly divert resources away from the earmarked social security funds and into collective private insurance funds, thus fueling their development, in the case of health care and pensions (section 4). Lastly, the article engages with the notion of the “social division of welfare” (Titmuss, 1958) by considering some of the distributional effects of fiscal welfare in France (section 5), before concluding (section 6).