Barnier increases a tax by 40%, all French will have to pay it

2024-10-08 05:14:25

If Michel Barnier has promised that income tax will not increase for almost all French people, he instead intends to increase a tax that all families will have to pay.

The French will know soon. Michel Barnier and his government are finalizing work on the 2025 budget and the next tax increase. If the Prime Minister stated that the vast majority of families would no longer pay income tax, all French people will nevertheless have to put more hands in their pockets due to the expected sharp increase in a tax paid by all families and from which escape.

Seeking to achieve nearly €20 billion in additional revenue in 2025, Michel Barnier has explored numerous avenues. One of these, currently being validated, consists of increasing the national tax on final consumption of electricity (TICFE) by more than 40%. Concretely, on your electricity bill, the share you will pay to the State will be much greater. Today it is €22.50 per MwH. From February 1st it should rise to 32 euros per MwH… And perhaps more. Le Parisien suggests that the final amount could be higher. If the idea has not yet been definitively adopted, Bercy’s services are working on it.

Among other measures, that of an additional tax on families who receive “approximately” 500,000 euros per year, or 40,000 euros per month for a single person or 20,000 euros per person who is part of a couple. This is 65,000 people in France. Also on the cards for Michel Barnier, an “exceptional participation”, for “a year or maybe two”, in the profits of “300 companies” that “make a billion in turnover or more”, again according to the prime minister on Thursday evening, but also an increase in taxation on polluting transportation, increases in taxes on electricity and even sports betting, as well as a change in taxation for AirBnb rentals.

All these projects have not yet been definitively confirmed. Laurent Saint-Martin, Minister of the Budget, will have to present all the details on Thursday 10 October 2024. Then the deputies will have to discuss this dossier for only five days, from 21 to 25 October. It is expected that many amendments will be tabled, but the final vote will have to take place on Tuesday, October 29, before the Senate votes on the matter. Parliamentarians will have to approve the budget by December 31st at the latest.

07:14 – What happened to the main old “temporary” taxes?

The “temporary” taxes are not the first time a government has tried to implement them. This formula has already been used in the past. And the temporary nature quickly turned into permanent. This is the case, in particular, of the Social Debt Repayment Contribution (CRDS), a tax levied on all income to reduce social security debt. Faced with the organization’s huge financial hole, the project is postponed to 2033… or 2042! But that’s not all. The exceptional contribution on high incomes (CEHR), paid starting from 250,000 euros declared in taxes (or 500,000 as a couple), would have lasted until 2017, the year in which the public deficit would have been “zero”. Suffice it to say, he’s not ready to disappear.

06:31 – How long will the richest have to pay more?

That was the whole issue. From the beginning, Michel Barnier and Laurent Saint-Martin have reiterated: these increases will only be “temporary”. But temporary for how long? The Prime Minister raised the veil on the topic indicated during the broadcast The event on France 2, Thursday 3 October, that the many rich people who will be called upon to make “a temporary exceptional effort” will have to pay this additional tax for one or two years.

24/10/07 – 20:23 – MPs will vote on the tax increase on 29 October

While the Budget Minister, Laurent Saint-Martin, will present the detailed measures on Thursday 10 October, debates in the National Assembly will begin on Monday 21 October. The deputies will work until Friday the 25th on the “revenue” part, therefore the question of tax increases. They should vote on Tuesday 29th to validate the measures or not. Then, from Tuesday 5 November, the question of spending will be studied, and therefore also of the savings promised by the government.

24/10/07 – 19:08 – The return of the ISF, an idea non grata

The left and the majority of French are asking for it: the return of the wealth tax is not in Michel Barnier’s newspapers. The prime minister has ruled out this hypothesis: instead of a new permanent tax, abolished by Emmanuel Macron, he seems to prefer an exceptional contribution from the richest. The ISF will therefore not return.

24/10/07 – 18:22 – Will MPs vote in favor of the tax increase?

10/24/07 – 5.53pm – New taxation on AirBnb rentals

After causing discussion a few months ago, short-term rentals, such as AirBnb, are in Michel Barnier’s sights. The world claims that the Prime Minister has decided to eliminate a tax advantage for the benefit of owners who carry out this type of activity.

Every year, the depreciation of the property and the works allows the amount of declared rental income, and therefore the tax, to be reduced. If this did not change, all the depreciation made would be reinstated in the calculation of the capital gain in the event of sale of the bin, which does not happen today. Enough to increase the amount of tax payable to the State in the event of a transfer.

24/10/07 – 16:42 – An increase in taxes on polluting vehicles?

In addition to large companies, Michel Barnier would target polluting motorists. Today, vehicles emitting more than 118 g of CO2 per kilometer are subject to a tax of 60,000 euros. This threshold could drop to 106 in 2026 and 99 in 2027, and the tax increase by 10 thousand euros per year.

This tax applies to private vehicles (tourist vehicles), passenger vehicles and “pick-ups” with at least 5 seats. It also applies to vehicles which have undergone a technical modification and which were not taxed when first registered in France.

24/10/07 – 15:37 – Which companies would be affected by the exceptional tax on large groups?

The government plans to introduce this exceptional surtax on the profits of some groups. These would be those with a turnover equal to or greater than 1 billion euros and which have generated profits. For example, Total Energies, the production company Studio Canal, the insurer Axa and the energy supplier Engie would be interested. This would affect a total of 300 to 350 companies.

24/10/07 – 14:22 – Some companies tax more than 30% on their profits

Second The Echoescorporate income tax could increase from 25% to 30% for companies with a turnover exceeding 1 billion euros, and even rise to 35.25% for those exceeding 3 billion CA. Then, in 2026, the rates would be reduced to 27.5% and 30%, before a possible return to 25% in 2027. This could bring €8 billion into state coffers.

24.10.07 – 13:36 – A higher tax increase than that of Sarkozy and Hollande?

Will Michel Barnier raise taxes even more than François Fillon and Jean-Marc Ayrault? Between 2011 and 2013, the former prime minister of Nicolas Sarkozy, then that of François Hollande, were forced to increase taxes to cushion the impact of the 2008 financial collapse. At the time, the additional levies had allowed to raise 20 billion in 2011, the same the following year and 30 billion in 2013. This time, total revenue should be just under 20 billion, according to Bercy forecasts.

24/10/07 – 12.55 – An already unconstitutional provision?

There is a constitutional risk regarding this additional tax applied to the very wealthy. This could lead to the confiscatory nature of the tax. In 2013, the Constitutional Council judged François Hollande’s 18% surtax on incomes above 1 million euros to be incompatible with the Constitution, because it brought the marginal rate to over 70%. A rate above which the tax becomes contrary to the Constitution. Michel Barnier and his Budget Minister may therefore be forced to revise their copy.

24/10/07 – 12.34 – The rich taxed at 75%?

This is an observation established by The Echoes which could pose a problem. While Michel Barnier wants to increase taxes for higher incomes, probably with an increase in the tax on high incomes, the business daily notes that the marginal tax rate of the people affected has already reached 66.2% (45% for l income tax, 4% for the exceptional contribution on high incomes, 9.7% for the CSG-CRDS and 7.5% for the solidarity contribution). If the CEHR were tripled to 9 or 12%, this would increase the marginal rate to around 70/75% depending on the family.

10/24/07 – 11:29am – Tax increases presented on October 10th

While they were finally due to be presented on Wednesday 9 October, the tax increases – and the general draft of the 2025 budget – will finally be presented only 24 hours later, during a council of ministers, the Ministry of Finance indicated. Only then will negotiations with deputies and senators begin.

24/10/07 – 10.40 – Gambling also in the sights

And now it’s the turn of gambling and sports betting. The Echoes claim the government plans to raise taxes on lotteries, casinos, horse racing, sports betting and online poker. A complete review of the sector’s taxation is under consideration, with an increase in the CSG to 9.2%. Furthermore, social security contribution rates would increase to 10% for betting and physical gaming clubs, and to 15% for sports betting, an increase of 4-5 points according to the business daily. Additionally, advertising expenditures by industry professionals would be taxed more heavily. Financial objective: raise another 500 million euros starting next year.

10/24/07 – 10:13 – An increasing tax on airline tickets?

Second The Echoesthe State plans to increase a tax applied on airline tickets: the TSBA, for the solidarity tax on airline tickets. A tripling is being studied, according to information from Parisianto which Air France has already announced that “if this project sees the light, there will be an impact on the price of tickets. A “business” class ticket could cost on average 200 euros more, and “a few dozen euros”” in economy class.

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