The good tax news of the day came from INSEE. In full presentation of the 2025 budget, the National Institute of Statistics and Economic Studies published this Thursday, October 10 its new figure for inflation excluding tobacco for 2024. And, surprise, at 1.8%, it is much higher lower than that used by Michel Barnier’s government to construct its finance bill (PLF).
Bercy has in fact based itself on inflation at 2%, announced several weeks ago, to revalue the income tax scale: the famous tax brackets at 11%, 30%, 41% and 45 %.
However, by revaluing them more than the index traditionally used, the Ministry of the Economy is giving a small gift to each household liable for income tax. For example, with a 2% increase, entry into the first tranche is at 11,520 euros per tax share instead of 11,497 euros if the scale had been built with an increase of 1.8%.
Enough to save tens, even hundreds of euros per household depending on income. Of the approximately 18 million tax households who pay tax, the bill could amount to tens or even hundreds of millions of euros in lost revenue for the tax authorities.
Deputies and senators could rectify the situation
A statistical turnaround that comes at a bad time since the State is eagerly seeking 60 billion euros to complete next year’s budget. When questioned, Bercy “does not make any comments at the moment”.
However, the tax gift could be short-lived. The PLF which has just been presented this Thursday in the Council of Ministers will now be debated in Parliament. Nothing prevents deputies and senators from rectifying the situation.
Ironically, for several weeks, at the highest peak of the State, it was rather a deindexation of the upper brackets of the scale that was under study. The maneuver had the advantage of easily recovering billions of euros in additional revenue by bringing well-off taxpayers, who have salary increases, into the higher brackets more quickly.
Ultimately, Bercy opted for the opposite, which has the merit of preserving the purchasing power of the French. But which deprives the State of 3.7 billion euros in additional tax revenue.
