The objective is to avoid “threshold effects”, according to the Minister of the Economy.
French people who get salary increases from their employers to cope with inflation will not pay “more taxes“Because of this revaluation, assured Wednesday the Minister of the Economy Bruno Le Maire.
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«We will index the income tax scale to inflation to avoid these threshold effects, where people (…) switch to income tax or an additional bracket“Due to a salary increase, said the number two of the government on BFM TV / RMC. “It is out of the question that employees pay more income tax or fall into the income tax scale because of inflation“, measured at more than 5% over one year by INSEE in May.
The indexation of the income tax scale to inflation, which will materialize in the 2023 finance bill that the government must present at the start of the school year, is a common operation. Since 1969, the scale has been updated each year to take inflation into account, except in 2012 and 2013, specifies Bercy.
Inflation that will last
But the financial and fiscal stakes for the State are particularly high this year, due to inflation which has reached levels not seen since the 1980s in recent months. Bruno Le Maire recalled that the government’s objective was to protect the French as “l’inflation dure», «probably a few more weeks or months“. The Minister of the Economy predicts a return to normal for the beginning of 2023.
The entry threshold for income tax is currently set at 10,225 euros per year for a single person. The income tax schedule has four brackets, with tax rates ranging from 11% for the lowest incomes to 45% for the highest.
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