MPs must vote on two motions of censure on Wednesday December 4 afternoon, but Prime Minister Michel Barnier warned Tuesday evening, on TF1 and France 2, that this vote would have consequences. “Nearly 18 million French people will see their tax increase, others will pay it for the first time”he said. And it's true.
The Prime Minister relies on a report from the French Observatory of Economic Conditions (OFCE), a private economic analysis organization attached to Sciences Po Paris, published at the beginning of October. This document questions the impact of a possible freeze of the income tax scale, and this is what risks happening if the 2025 budget is not adopted, because the budget of year 2024 could be extended to 2025, thanks to a special law. This would mean that the 2024 tax scale would be rolled over into 2025, without taking into account the new inflation figures.
The OFCE concludes that, in the event of a freeze in the tax scale, 17.6 million French households will have to pay more taxes. Moreover, if we want to be precise, the report talks about households, but there are on average two people in a household, so in truth around 35 million French people would be affected by these tax increases.
The middle classes would be most impacted. Households closest to the median income risk losing 50 to 100 euros over the year. Furthermore, 380,000 households would become taxable, although they would not be if the budget were adopted.
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However, Michel Barnier is a bit fatalistic. In truth, if one of the motions of censure is adopted on Wednesday afternoon, if the government falls, if this year's budget is renewed next year by a special law, it will only last for a while. A new government will eventually be appointed, another budget will be adopted and the latter will once again be able to index the tax to inflation.
Another solution is possible, already mentioned by Jean-Philippe Tanguy, deputy of the National Rally. MPs can vote on an amendment to index the tax to inflation and prevent the increases mentioned by the Prime Minister.
