Should the ultra-rich be taxed again? If the government continues to rule out tax increases targeted at the largest estates, the Institute of Public Policy (IPP) came on Tuesday, June 6, to kick the anthill. A few days after the economist Jean Pisani-Ferry suggested temporarily reintroducing a form of wealth tax to finance the ecological transition, the IPP has just thrown a new stone in the garden of the executive, who is splint, since the arrival of Emmanuel Macron at the Élysée in 2017, to reduce the tax burden.
Admittedly, the four authors of this note, who used data from 2016, recognize that the taxes of the overwhelming majority of French taxpayers are proportionate to their income. On the other hand, they find “a strong regressivity of the overall tax rate” once the threshold of the 0.1% richest French people is crossed.
These 37,800 wealthiest French households, who receive more than 627,000 euros annually, have an overall tax rate of 46%. But this rate decreases as the income of these ultra-rich increases, until it drops to 26% for the 75 wealthiest tax households. A particularity which is explained by the nature of the income of the wealthiest French people, who are often paid with the undistributed profits of their companies, subject to a tax rate more advantageous than salaries or income from assets.
Éric Coquerel, LFI Chairman of the National Assembly’s Finance Committee, was quick to react: “It’s now proven, billionaires pay almost no tax. ” Immediately corrected by the entourage of the Minister of the Economy, Bruno Le Maire, who again closes the door to any return of a wealth tax (ISF): “The note confirms the strong progressiveness of the tax in France. »
In a context where rating agencies closely monitor French public finances, and where the State is still trying to find ways to finance the greening of the economy, tax issues are watched like milk on fire by the executive.
In this same note, the IPP dismisses the very controversial track of a reintroduction of the ISF, deemed ineffective in capturing the share of income from the wealthiest households that escapes tax. But he suggests subjecting the undistributed profits of holding companies to income tax, a proposal taken up by Éric Coquerel.
With a tax rate as low as 15%, “the constraint does not really bite”, relativizes Arthur Guillouzouic, co-author of the IPP study.
The government’s cautious reaction to this study is reminiscent of the attitude it adopted at the end of May when the Pisani-Ferry report was published. “We will not raise taxes. We do not think that a new tax, a new tax is the solution” to find the tens of billions of euros needed to finance the ecological transition, then hammered Bruno Le Maire, in response to the proposal for an exceptional tax on the financial assets of the wealthiest French people.
Based on 2016 data provided by Bercy, the “only currently available” according to the IPP, the note does not take into account the tax reforms that have taken place since: replacement of the ISF by the property wealth tax, introduction of a flat-rate levy of 30% on capital income or reduction from 33.3% to 25% of the corporate tax rate (IS).
