Moscovici urges Barnier to tax the richest and retirees more

The richest and retirees are in the sights of the Council for compulsory deductions. In the midst of a budgetary slump, the president of this body attached to the Court of Auditors urged the Barnier government to make use of these two categories during a press briefing this Monday, October 14.

« We are dealing with an extremely degraded situation of our public finances “, declared the magistrate. Faced with this observation, “ it is essential to guarantee equality before taxes because it is the key to consent to taxes. Tax leverage must be measured and targeted […] We propose to limit the concentration of tax loopholes on the highest incomes “, he said.

For its part, the Barnier government clarified its tax measures in the presentation of the 2025 finance bill on Thursday October 10. The wealthiest and seniors should be called upon in 2025. But the figures included in the budget documents in recent days seem much lower than what was initially announced by the government.

On the exceptional contribution on the highest incomes (CEHR), only 25,000 tax households would be affected compared to 65,000 initially mentioned by Bercy, according to documents annexed to the budget. Doubtful about the expected return on this tax system, several deputies from the Finance Committee questioned the government’s intentions in terms of taxation last Friday, during a hearing of ministers Antoine Armand (Economy) and Laurent Saint Martin (Public Accounts). ).

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Limit the concentration of tax credits on the richest

In their thick report, the authors of the CPO criticize the tax credits and reductions benefiting the top of the pyramid. In particular, the tax credit for home employment is in the spotlight, the amount of which is estimated at 5.9 billion euros each year. Hiring a person at home allows the opening of a tax credit at 50% of expenses, with a ceiling set at 12,000 euros. This may involve gardening, DIY or house maintenance. The use of this tax credit is mainly concentrated on the richest.

Cleaning, ironing… The home employment tax credit cut this fall?

By population category, the gap in the recourse rate is particularly glaring (10% at the 70th percentile of the population compared to 50% at the 99th percentile). To limit optimization mechanisms, the CPO recommends lowering the tax credit rate from 50% to 40%. Which should not cause hidden work to increase, according to Pierre Moscovici.

Also in the CPO’s crosshairs are tax credits for donations. “ This system may appear effective for financing associations, but it appears much higher than in foreign countries. », Underlines the former European Commissioner. Used among the highest incomes, the reduction on donations is vilified by many economists. The compulsory deductions council suggests a reduction in the amount of the benefit to 50% of the donation against 75% currently in certain cases.

“The tax system for donations in France creates enormous political inequality” (Julia Cagé)

Retirees: the 10% reduction in the crosshairs

The other target mentioned by the members of the compulsory deductions council concerns retirees. “ We focus on anomalies concerning retirees such as the 10% reduction » declared Patrick Lefas, vice-president of the board. This tax reduction, the cost of which is estimated at 4.6 billion euros, benefits half of the wealthiest retired households. According to the CPO calculation, the tax gain is higher for the higher brackets (around 1,850 euros each year).

Faced with this distortion, the compulsory deductions council recommends targeting this system on the most modest categories. On this sensitive point, civil servants are going against the government which has decided to postpone the indexation of all retirement pensions to inflation from January to July. This certainly allows for substantial savings, but risks widening inequalities.

In fact, the deindexation of benefits should weigh more on small pensions than on larger pensions. The latter are generally supplemented by income from capital (investments, investments in real estate). Which is not the case for small pensions.

In their report, the experts mention an average poverty rate among retirees (3.9%) much lower than that of the population (14.9%) and a much higher savings capacity. Behind these averages, however, lie particularly marked disparities between the different categories of retirees. It remains to be seen what will emerge from the parliamentary debates on the budget which begin this Wednesday in the Finance Committee.