2024-07-17 15:26:17
Tax Redemption Day is the first day of the year when taxpayers have accumulated enough money in a country to be able to pay the mandatory taxes they owe. In France, this day was set for July 17 by the Molinari Institute.
So, from this day on, the French have paid what is owed to the state and are starting to work for themselves. This date, set symbolically, shows that the mandatory withholding rate in France is the highest in Europe.
In fact, according to the calculations of the Molinari Institute, in partnership with EY, July 17 is the day of the year from which a typical employee “takes direct control over the allocation of the fruits of his labor”. The Franco-Belgian liberal think tank shows in its study that the taxation of the average employee stands at 54%, when we take into account social contributions, CSG, CRDS, income tax and VAT.
The French pay the biggest taxes in Europe
As for the calculation methodology used by this think tank, it consists of taking the average gross salary (3,460 euros per month according to the OECD) and adding employer contributions to get the “gross”, as well with the applicable income tax and VAT. to get a mandatory withholding percentage on total income.
However, it should be noted that distinguished economists are against this methodology which they consider unsuitable for this type of calculation. The total average salary is taken into account in the calculations for the current year, which is 59,458 euros. From this salary, therefore, we deduct 17,918 euros in employer contributions, 9,864 euros in employee contributions, 2,451 euros in income tax and 1,900 euros in VAT, ie a total of 32,132 euros in deductions on disposable income which comes to 32,132 euros.
We should however emphasize that these levies are used to finance social protection and public services that also benefit employees. Since the French pay the most taxes in Europe, the date of “tax exemption” in France is the latest in Europe, according to the Molinari Institute. This date is, in fact, two days after Belgium, 10 after Germany, 14 after Italy, 37 after Spain and even 78 days after the United Kingdom. On average, in the EU 27, the “tax free” day occurs on June 11, ie 36 days earlier than in France.
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