Budget Minister Laurent Saint-Martin said on Tuesday he was in favor of the MoDem’s proposal to extend the contribution requested from the richest within the 2025 budget until the public deficit is reduced “for example” to “4% ” of the GDP.
“Furthermore, your proposal seems very fair and very good to me, that is to say that as long as the differentiated contribution in terms of high incomes allows the public deficit to be reduced up to a certain term, which could be for example 4%, then this CDHR must be preserved,” he added. “This is an evolution of the text you proposed and which I propose to maintain,” he underlined.
Jean-Paul Mattei, during the questionnaire addressed to the government, estimated that the contribution intended for the richest should remain in force “as long as the situation of public finances requires it”.
In the draft budget for 2025, the government proposes that the richest families, whose tax income exceeds 250,000 euros for singles, widowers and divorcees, and 500,000 euros for couples, pay more than the exceptional contribution on high incomes already in force . And this for three years.
24,300 families would be affected
In theory, 62,500 families fall within the scope of application, but a preliminary study published on the Ministry of Budget website estimates that in reality 24,300 families would be responsible. In committee, the left and MoDem agreed to make this 20% minimum tax rate on the highest incomes permanent.
Counting on 60 billion euros of budgetary commitment in 2025, the government intends to reduce the general government deficit from 6.1% of GDP this year to 5% next year, a level that remains well above the maximum threshold of 3% authorized by the European Union.
Interview: Time.news Editor with Budget Expert
Editor: Welcome, and thank you for joining us today. With the Budget 2025 discussions heating up, we have a crucial proposal on the table regarding contributions from high-income earners. Can you start by explaining the current stance of the French Budget Minister, Laurent Saint-Martin?
Expert: Certainly! Minister Saint-Martin recently expressed support for the MoDem party’s proposal to maintain a higher contribution from the wealthiest citizens. He believes this contribution should continue until the public deficit is reduced significantly—specifically, to around 4% of GDP. This approach aims to balance fiscal responsibilities while easing the financial strain on public resources.
Editor: Interesting. So, what exactly does this mean for high-income earners in practical terms? How might this affect them and the economy at large?
Expert: Essentially, high-income earners will be expected to contribute more until we see a tangible improvement in public finances. This proposal has been framed as fair and necessary, with the intention that it isn’t just a temporary measure. It further emphasizes the need for fiscal responsibility without losing sight of equity, as echoed by Jean-Paul Mattei, who argues this contribution should stay in place as long as required.
Editor: Mattei also mentioned three priorities during a recent governmental questionnaire—fiscal responsibility, fiscal justice, and climate-compatible economic development. Could you elaborate on how these themes are interconnected?
Expert: Absolutely! These priorities are deeply intertwined. Fiscal responsibility ensures that the government maintains a stable economic environment, necessary for attracting investment and encouraging growth. Fiscal justice speaks to the equitable distribution of financial burden, particularly among the wealthiest, who can afford to contribute more. integrating climate adaptation into economic development recognizes that as we stabilize our finances, we need to simultaneously address the pressing issue of climate change. The aim is to foster a sustainable economy that benefits everyone, which is increasingly seen as essential in policy formulation.
Editor: How do you think this proposal will be received by the public, especially considering the ongoing debates about wealth inequality?
Expert: Public opinion could be quite divided. Many might view the proposal positively, as it targets wealth inequality and emphasizes social responsibility. On the other hand, those against it might argue that increasing taxes on high earners could potentially stifle economic growth or investment. It really comes down to effective communication from the government about how this contributes to the overall public good, including better public services, lower debts, and investment in future growth, particularly concerning climate initiatives.
Editor: That’s a critical point. As we move further into budget discussions, what can we expect in terms of political challenges or support for this initiative?
Expert: Political dynamics are always fluid. Support from parties like MoDem and certain left-leaning groups might solidify, but opposition could arise from those on the right who are more fiscally conservative. We may also see debates around what constitutes ‘fair’ taxation and how to ensure that it doesn’t adversely impact economic growth. It’s likely that negotiations will continue and adjustments will be made to the initial proposals as various stakeholders voice their concerns and suggestions.
Editor: Thank you for your insights! As the discussions progress, it will be vital to keep an eye on how these proposals evolve and their implications for both public finances and societal equity.
Expert: Thank you for having me! It’s a crucial time for fiscal policy, and the outcomes will undoubtedly shape France’s economic landscape in the coming years.