A few days after economist Jean Pisani-Ferry suggested temporarily reintroducing a form of wealth tax to finance the ecological transition, the Institute for Public Policy (IPP) came Tuesday to throw a new stone in the garden of the executive, which has been working since the arrival of Emmanuel Macron at the Elysee in 2017 to lighten the tax pressure.
The incomes of the 37,800 richest French households are proportionally less taxed than those of the rest of the population, according to the conclusions of this study. "All personal taxes remain progressive (proportional to income, editor's note) until a high level of income," observe the four authors of the note, based on data from the year 2016. But they note "a strong degressivity of the overall tax rate" once crossed the threshold of the richest 0.1% of French.
" READ ALSO Taxes: the tracks of Emmanuel Macron to lower them for the middle classes by 2027
According to the study, the 37,800 wealthiest French households, who receive more than 627,000 euros annually, have an overall tax rate of 46%. But this rate decreases as the incomes of these ultra-rich increase, reaching 26% for the 75 wealthiest tax households. This is explained by the composition of income: those of the richest French come mainly from companies' undistributed profits, which are therefore subject to corporate tax (IS) rather than income tax (IR). "In this way, the tax rate based on personal income and wealth, located at the highest around 59%, is replaced by the much lower corporate tax rate, 33.33% in 2016," the authors explain.
Similar systems in our European neighbours
"It is now proven, billionaires pay almost no tax," said Eric Coquerel, LFI president of the Finance Committee of the National Assembly. But, according to Laurent Bach, co-author of the note, "we should not conclude that the France is more a tax haven for billionaires than our neighbors". The Dutch, Swedish or New Zealand tax systems are also marked by "a form of degressivity at the top of the income distribution", details the IPP.
Based on 2016 data provided by Bercy, the "only ones currently available" according to the IPP, the note also does not take into account the tax reforms that have occurred since: replacement of the ISF by the tax on real estate wealth, introduction of a flat-rate levy of 30% on capital income or reduction from 33.3% to 25% of the corporate tax rate (IS).
The IPP certainly dismisses the very controversial track of a reintroduction of the ISF, deemed ineffective in capturing the share of income of the wealthiest households that escapes taxation. But he suggests subjecting to income tax the undistributed profits of holding companies, a proposal taken up by Eric Coquerel.
Hardly convinced, Bercy stresses that retained profits "are generally reinvested in employment and growth" of companies, and that it would therefore be counterproductive to tax them. The executive believes more in the global minimum tax of 15% on the profits of multinationals, a measure that should be transposed into French law on the occasion of the draft budget for 2024. To tax the ultra-rich, "a viable solution in the long term can only be international," slips Bercy.
The government's cautious reaction to this study is reminiscent of the attitude it adopted at the end of May when the Pisani-Ferry report was published, which suggested temporarily restoring a form of wealth tax to finance costly investments in the ecological transition. "We will not raise taxes. We do not think that a new tax, a new tax is the solution" to find the tens of billions of euros necessary to finance the ecological transition, had hammered Bruno Le Maire.
