The Minister of the Economy assures that the increase in taxation for the wealthiest and large groups will be “temporary”. But many taxes that were supposed to be temporary persisted for years.
In the French language temporary and constant are antonyms. After Michel Barnier’s general policy declaration, the Minister of the Economy, Antoine Armand, insisted, this Wednesday, October 2 on RTL, on the fact that the tax increase for large companies and the wealthiest households would be “temporary”.
However, some fear that this will persist. Is this fear justified? What can previous “exceptional and temporary” taxes teach us?
• Vignettes automobiles
In 1956, the President of the Council of Ministers Guy Mollet introduced the automobile sticker in order to finance a minimum income for people over 65 while waiting for a “perennial resource”. The car is then considered a high-end product. The amount of this tax depends on the “fiscal power” of the vehicle. It would take more than 40 years for its suppression to be announced by Laurent Fabius in August 2000, then Minister of the Economy in Lionel Jospin’s government.
• The contribution for the repayment of the social debt (CRDS)
The CRDS is a tax, levied on almost all income, intended to reduce social security debt. It was set up in 1996 for an initial duration limited to 13 years and one month. This tax, which has been extended several times, was to disappear in 2024 if the Medicare debt had been repaid. This scenario was abandoned during the pandemic with a new deadline of 2033, or even 2042.
• The exceptional contribution on high incomes
Established in 2011 by the Fillon government to deal with the consequences of the 2008 financial crisis, this tax levies high incomes at 3% and 4% depending on a threshold and is added to the tax on income. Scheduled “until the year in which the public deficit is zero”, i.e., initially, 2017 according to the commitment of the former President of the Republic, Nicolas Sarkozy, the tax still exists.
The Eco Duel: Taxes towards an exceptional contribution? – 01/10
As a reminder, the public deficit could amount to 6.2% of GDP in 2024 according to the latest estimates. Michel Barnier intends to reduce it to 3% of GDP by 2029. The exceptional contribution on high incomes seems to have a bright future ahead of it.
• Increase in corporate tax (IS) for large companies
In 2011, the Fillon government also increased the corporate tax rate by 5% (then 33.5%) for companies with a turnover of more than 250 million euros. A measure extended by Prime Minister Jean-Marc Ayrault in 2012, which he amplified a year later with an addition of 11% in order to release 2.5 billion euros in additional contributions.
If Emmanuel Macron has since lowered the IS to 25%, the head of state also decided on a temporary surcharge on it in 2017. To cope with the cancellation of the tax on dividends by the Constitutional Council, the president had agreed to apply 5 additional IS points for the 320 largest French companies exceeding one billion euros in turnover (and +10 IS points beyond 3 billion euros ). This measure brought in 5.4 billion euros.
• Contribution on “inframarginal rents” of electricity producers
At the initiative of Brussels, Bercy implemented a tax on electricity producers in 2022. The latter had taken advantage of gas supply difficulties, due to the war in Ukraine, to record colossal profits. Renewed in 2023, it brought in nearly 6 billion euros to the State, a figure considered disappointing compared to expectations.
The former Minister of the Economy, Bruno Le Maire, planned to renew the contribution in 2024. The tax project was left on Michel Barnier’s desk by the outgoing government. This could bring in 3 billion euros to the State, due to better tying up.
