France’s public finances are faltering, and Éric Lombard, new Minister of the Economy, seems determined to turn things around. His plan? A bold approach to recover 2 billion euros from the first half of 2025. But this fiscal poker move risks fueling debates and causing legal turmoil. A look behind the scenes of a maneuver that was as ingenious as it was controversial.
The fiscal puzzle: between deficit and new measures
The government faces a budgetary impasse. With a public deficit approaching 6% of GDP, room for maneuver is limited. The measures proposed by Lombard’s predecessor, Michel Barnier, although ambitious, could not be voted on in time. Among them, a minimum tax rate of 20% for high incomes and an increase in the flat tax from 30 to 33%. So many billions that could have replenished the coffers but which will remain out of reach for 2024 revenues.
Faced with this shortfall, Lombard comes out with an unexpected card: apply tax increases to 2025 revenueswhile requesting a deposit based on 2024 tax returns. A trick that could pay off big, but which raises a crucial question: where does fiscal creativity stop, and where does illegality begin?
An unprecedented tax payment: innovation or disguised retroactivity?
The central idea of the plan is based on a down payment imposed on the wealthiest taxpayers. They would be required to pay, from 2025, an advance calculated on their income declared in 2024. In theory, overpayments would be reimbursed subsequently, but this approach comes dangerously close to the red line of tax retroactivity.
Some lawyers believe that the operation could pass legally, because of the promise of reimbursement. However, there is no clear precedent. If the Constitutional Council were to be seized, it could tip the structure over. The question is simple: is Eric Lombard’s strategy a stroke of fiscal genius or a political bluff doomed to failure?
What are the affected taxpayers at risk?
For affected taxpayers, mainly those earning more than 250,000 euros per year for a single person or 500,000 euros for a couple, the stakes are enormous. Not only will they see their taxes increase significantly, but they will also have to advance a substantial sum without immediate guarantee. A double penalty which could reinforce their distrust of the tax administration.
On the other hand, the state could quickly recover liquidity to calm the markets and reduce the deficit. However, this short-term solution could backfire on the government if popular discontent or a legal veto compromise everything.
-My clear opinion
What Lombard is proposing is nothing more and nothing less than a poker game with our taxes as chips. If the objective is laudable – to reduce a galloping deficit – the method remains questionable. Is it really by putting more pressure on high incomes that we will resolve the fundamental problem of public finances? Or is this “fiscal genius” just a smokescreen to hide the lack of structural reforms?
Because transparent taxation concerns us all, share this article with your loved ones and debate these measures which could change the situation in 2025. Together, let’s dissect this bluff which could well redistribute the cards… or burn them.
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