While France’s public deficit was singled out by the European Commission last week, the different political forces for the early legislative elections are gradually presenting their program and have made taxation one of the themes of their campaign. Prime Minister Gabriel Attal presented Thursday June 20 that of the presidential majority, Together for the Republic, just before the presentation, Friday then Monday, of that of the two other movements currently leading in the polls, the New Popular Front and the National Rally. The tax aspect of the Macronist project proposes in particular not to tax inheritances and donations up to 150,000 euros per child.
No tax increase?
“We are making a commitment to enshrine a budgetary golden rule in the law,” declared Gabriel Attal during the presentation of the program. Namely: “no tax increase whatever happens”. “Forbidding any new recipes would lead France into a dead end,” reacted on Public Senate senator (ex-LR) Jean-François Husson, general budget rapporteur. Especially since the finance programming law which is still in force does not provide for anything of the sort. While the Minister of the Economy Bruno Le Maire had announced 10 billion euros in additional savings in February and planned an additional 20 billion in the 2025 budget, the program promises several boosts in terms of inheritance and for power purchase.
Raise the reduction on inheritance and gift taxes
Concerning inheritances and donations, the presidential majority’s program promises that no tax will be applied to inheritances and donations up to 150,000 euros per child, including for blended families (compared to 100,000 currently, excluding blended families), nor up to 100,000 euros passed on to grandchildren (compared to 1,594 euros currently for an inheritance and 31,865 euros for a donation). This is a reinforced version of a promise already made by Emmanuel Macron during the 2022 presidential campaign, namely that “no inheritance tax up to 150,000 euros per child, no tax up to 100,000 euros passed on to other members of the family” would not be applied, in his own words – donations not being mentioned. A measure evaluated at the time (excluding donations, therefore), at 3 billion euros by the campaign team of the President of the Republic, and 1.8 billion by the Institut Montaigne, a liberal think tank.
The National Rally also proposes to exempt from taxes donations up to 100,000 euros from parent to child or from grandparents to grandchildren every ten years, repeating a measure from Marine Le Pen’s presidential campaign in 2022, and to remove taxes “on direct inheritances for low-income families and the middle classes”, according to the presentation of the program this Monday, June 24. As noted the Jean Jaurès Foundation, a think tankclassified on the left, “only 19% of inheritances are for an amount greater than 100,000 euros. These reductions would therefore exclusively benefit the highest estates.”
Taxation of the highest incomes “internationally”
On Thursday, Gabriel Attal also praised the tax cuts made under Macron’s five-year term: “We have removed the housing tax, removed the TV license, we have lowered income tax on the lowest brackets”, he congratulated himself. Unlike the New Popular Front, which plans to “abolish the privileges of billionaires” in particular by reestablishing the ISF, Gabriel Attal has always maintained that he was certainly not opposed to the taxation of the highest incomes, but only “to international level”, because “we know that the people who have the highest incomes […] “have a fairly easy time changing their tax domicile to avoid the tax”, he declared in April on BFMTV. Brazil, which chairs the G20 (grouping of the 20 most developed world economies), proposed in April cooperation international on the taxation of the richest, supported by France.
Fight against tax and social fraud
The presidential camp is also committed to continuing “a relentless fight against all social and tax fraud”, which has made it possible to recover 17 billion euros in 2023, including 15.2 billion in tax fraud and 2 in social fraud. “A bill will be presented in the summer,” announces the program of the outgoing majority.
Eliminate notary fees for first-time buyers
The presidential camp also wants to exempt first-time home buyers from “transfer taxes for valuable consideration” (DMTO) for the purchase of housing up to 250,000 euros, by 2027, “for French people in middle classes”, according to the presentation made by Gabriel Attal. These are the fees which constitute the part of the “notary fees” covered by tax, and which are paid back to the communities, the departments being the main beneficiaries. DMTO reached 16.8 billion euros in 2022, according to the housing account report 2022. The cost of the exemption measure is estimated at around 3.3 billion euros by the Institut Montaigne.
A mutual fund for 1 euro
In terms of boosts to purchasing power, the presidential camp’s program plans to increase pensions to keep up with inflation. He also promises the implementation of a mutual health insurance at 1 euro for “3 million French people”, including retirees, students, self-employed people or job seekers who do not have mutual insurance, “by expanding complementary solidarity health insurance” . This mutual fund has already existed since 2019 and benefits 7.3 million people according to Health Insurance, but 3 to 4 million eligible people do not use it.