The next few days promise to be hectic at the top of the State. The State and Social Security budgets will be debated in parallel in the Assembly, the first in the hemicycle, the second in committee. A double perilous exercise for the government, in danger on many crucial points.
High income
Michel Barnier’s team will have great difficulty maintaining the “temporary” nature of the “contribution” requested from the richest. In committee, the left and the MoDem agreed to make this minimum tax rate of 20% on the highest incomes permanent, even if all the votes in committee have to be redone in the hemicycle.
The centrists, although supporters of the executive, were also successful in raising the “flat tax” on capital income, emblem of the tax cuts during Emmanuel Macron’s first mandate. The MoDem’s position on the “flat tax” could however be reviewed depending on the guarantees received from the government on the yield of the tax on high incomes. Another totem, another turn of the screw: the “exit tax” against tax exile, reestablished at the initiative of the right in its initial version – more dissuasive – established under Nicolas Sarkozy.
Another subject scrutinized with interest will be the possible reduction of tax advantages for the transfer of life insurance, by aligning the regime with that of direct line inheritance. A “tax attack”, for Eric Ciotti (UDR), a “storm in a glass of water”, retorts the author of the amendment Jean-Paul Mattei (MoDem), who specifies that the measure would not be retroactive for current contracts.
Large companies
Contested within the government camp itself, the “exceptional” surcharge on large businesses emerged unscathed from the debates in committee. But the measure will undoubtedly be the subject of a new skirmish during the session. Especially since the left will want to push its advantage, after having won symbolic votes on the taxation of “super-dividends” and “superprofits”, but also of multinationals and the maritime giant CMA-CGM. Also in the viewfinder, the costly research tax credit (CIR), which the right and left have worked to iron out through several amendments.
Energy
Electric debate in sight: all articles relating to energy taxation have been bypassed in committee. In particular the increase in the tax on electricity, supposed to put an end to the tariff “shield” introduced three years ago, widely rejected on all sides.
Also removed, the increase in the automobile penalty for gasoline and diesel vehicles, at the initiative of the right and with the support of the extreme right. Alliance of circumstance which was even extended to the Macronists to reject an increase in VAT on gas boilers. The government also intends to present an amendment at the meeting to increase the tax on plane tickets, an announcement which has already aroused the concern of overseas elected officials.
Contributions
Companies will also contribute to the Social Security budget. The government wants to review the contribution reductions on low salaries, and recover 4 billion euros in the process. But the reform faces hostility from the Macronists, the right and the far right, all concerned about the “cost of labor” and willing to remove the measure or rework it and reduce its scope. The government could also open the door to a debate on work stoppages, a subject absent from the text but provided for by regulation to transfer part of the Health Insurance bill to employers.
Retirements
An explosive issue par excellence, pensions are put back on the table with a 6-month freeze on pensions, which would be revalued on July 1st rather than January 1st. An idea widely rejected, including by government supporters, with several groups such as the executive working on a “modulation” or a “scale” to preserve “small pensions”. But the left intends to take advantage of this to obtain its revenge on the reform adopted forceps by a 49.3 last year, and to repeal the increase in the legal age to 64 years. Their amendments could, however, come up against the barrier of financial admissibility.
Oppositions will multiply initiatives: the National Rally will defend its own bill on Wednesday in committee, right in the middle of examining the Social Security budget. Everyone hoping to be the first to be able to claim a victory.