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Retirees are probably hoping that the government will leave them alone. In addition to the possible postponement of revaluations, the debate around pension taxation continues to inflame debates.
While some believe that retirees in France enjoy a comfortable standard of living, others consider it essential to continue to protect them against inflation. In this context, an automatic tax advantage, from which all retirees benefit, regardless of their financial situation, is currently the subject of discussions.
This advantage, which allows them to save several hundred euros, could soon disappear, because it particularly favors the richest, thus depriving the State of valuable revenue.
Should we review the tax privileges of retirees?
If we rely on recent government statements, the answer tends towards affirmation. Michel Barnier, in particular, wishes to take rapid action in the face of France’s budgetary situation. Among its targets is basic retirement.
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Traditionally, this pension benefits from an annual increase in January. However, for 2025, Barnier plans to postpone this increase until July. However, this would represent a loss of six months of indexation for retirees.
A hard blow for the latter, but a boon for public finances, which could save up to 4 billion euros. Some MEPs go even further, suggesting permanently eliminating this annual revaluation.
Enough to logically intensify the anger of retirees, already exacerbated by the recent recommendations of the Council for Compulsory Deductions (CPO). But what are they?
Towards the elimination of a historic tax advantage?
Since 1979, retirees benefit from an automatic tax reduction of 10% on the income they declare for tax. Originally, this measure aimed to reduce the tax burden on retirees with modest or average incomes.
In 2024, this reduction still allows up to 4,321 euros to be deducted from the tax base, an amount that escapes income tax. This reduction is comparable to the professional expenses deducted by active people and represents a real breath of fresh air for many seniors.
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However, the CPO emphasizes that this advantage mainly benefits the wealthiest retirees. Indeed, almost 30% of the total cost of this measure benefits the 10% of retirees who have the most resources. This is why the idea of overhauling this tax mechanism is starting to gain ground.
A measure to reform for more justice?
Faced with this inequality, the CPO proposes to condition this tax reduction on means criteria, in order to transform it into a real lever of solidarity. However, the precise terms of this reform, particularly with regard to the amounts or additional revenue for the State, remain unclear. However, in its quest for savings, this track could seduce Michel Barnier.
At the same time, the National Assembly is preparing to debate this sensitive subject. The National Rally (RN) has already tabled an amendment. The party proposes replacing the current reduction with a flat-rate deduction of 1,000 euros for all retirees. But this measure, unlike that of the CPO, does not in any way lead to better social justice.
This debate risks intensifying quickly, as it touches on the delicate question of taxation of retirees. However, a reform which would only concern the richest people seems logical. But the government is clearly having difficulty targeting this part of the population.
